A business plan is a management tool, and a strategic plan is a leadership tool. You need both when trying to map out your company's future.

When planning your company's future, asking "what if" questions is a good place to start. However, too often, "what if" turns into "if only" when strategic planning initiatives lack management support, communication and follow through.

Warning: Your Plan May Work

If you watch enough science fiction, you will learn that playing with the future can have dire consequences. A strategic plan goes well beyond just setting sales goals. It also is different than a business plan. A business plan is a management tool; a strategic plan is a leadership tool. You need both, and the business plan should become a part of your final strategic plan. The concept of strategy includes action and direction, how and when. Other characteristics of a true strategic plan:

It is chosen from alternatives. The strategy selected may be the obvious choice, or it may take some brainpower to develop it. However, there are other alternatives or options for the company to consider in reaching a decision on direction.

It causes some conflict in the consensus and decision-making process. If there is no conflict in its evaluation, then there probably is no passion in its implementation.

It is expensive. In terms of time, money or other forms of resource allocation, a strategy involves real and substantive commitment from top management. Again, this commitment reflects the level of passion and zeal that exists for execution.

It is hard to do. Strategic moves imply change, and change is generally difficult in organizations.

It is powerful by itself. A real strategy is expensive, change-oriented and challenging to the organization. You can't have many strategies without overwhelming yourself and the organization. Therefore, the strategies you choose must be significant.

It provides leadership. Top management's main job is to set the direction and pace of the organization. A good strategy speaks to what the firm can and will commit to. To a large extent, strategy is leadership.

It provides sustainable competitive advantage. For some companies, just committing to something can yield a competitive edge. However, one of the main reasons to engage strategy is to identify and develop areas in which to compete.

Back to the Future

The work of strategic planning usually begins with a situational analysis, which includes reviewing your strengths, weaknesses, opportunities and threats (SWOT). Even if you have a viable plan from last year, you will need to update your SWOT information annually. The strengths and weaknesses portion of the SWOT usually is generated from internal information.

The opportunities and threats section of the situational analysis should include information from outside sources, such as economic data, demographic data, regulatory changes, competitive profiles and customer surveys. Much of this information can be found searching through the library or on the Internet. Other data is compiled by outside resources either as standard reports or customized market studies.

Getting People Involved

As soon as you start requesting information for the situation analysis, you begin to involve all your employees and selected outsiders in the process. This involvement empowers your people and enlists them in your eventual strategic outcome. According to FMI's president and COO, Jerry Jackson, this "approach captures broader perspectives and deeper insights in surfacing opportunities, obstacles and alternatives. Participation also ignites motivation within planning team members to actually build their own design. Positioning the overall planning and implementation process as a 'design-construct of the organization's future' is a good metaphor for construction-related businesses."

Sharing the Future

When the planning process ends, plan implementation begins. This implementation process requires more discipline than many people are willing to endure, causing too many plans end up between dusty covers. The key role of the leader in the process is to assure that, once the planning team has crafted the company's future, the plan is shared with employees. Like any compelling story, if you share it often with everyone in the company, the story will become their own, and they will share it with others.

How will you know your work on the future was successful? The future will look a lot like the model future that took shape in your planning sessions. You will have measures and criteria to verify it is the future you set out to achieve for your company, and if it is different than you expected, you'll know why because you monitored the implementation of the plan as it unfolded.