Strategic planning helps a manager lead strategically. Strategic planning encompasses those activities that lead to the statement of goals and objectives and the choice of strategy. In practice, many executive leaders choose a strategy prior to strategic planning. Once the firm has the strategy, such as forming strategic alliances, a plan is developed to implement it. Quite often, strategic planning takes the form of a SWOT analysis, a long-standing method of considering internal strengths and weaknesses as well as external opportunities and threats.

A SWOT analysis represents an effort to examine the interaction between the particular characteristics of your organization or organizational unit and the external environment, or marketplace, in which you compete. Four steps are recommended to bring about a successful SWOT analysis. First, it is important to be clear about what you are doing and why. The purpose might be to fine-tune a present strategy or to point the business in a new direction.

Second, it is important to select appropriate contributors. Usually six to ten people is an adequate group size. Select people with appropriate experience, talent, enthusiasm and imagination. Third, allocate research and information-gathering tasks. Several members of the team might concentrate on analyzing the firm, whereas others might concentrate on analyzing the outside environment.

Step four is to create a workshop environment by encouraging open communication among participants. All present should feel free to criticize the status quo, even questioning what most people think is a company strength.