As 2025 quickly approaches, many business leaders are starting their jobs strategic planning process. Setting a strategy is the most difficult and important part of a CEO's job. While there are many different ways to create an annual strategic plan, effective plans include some common elements. They reflect what did and did not work well last year, as well as possibilities for the coming year. They're actionable, measurable, and concise enough that the team can review them frequently to make sure they're on track. Strategic plans are not meant to just sit on the shelf until they are dusted off next year during the next strategic planning process.

Annual strategic planning provides the opportunity to identify the ultimate goal, define the metrics that will measure success, and outline the actions needed to achieve those objectives. The end result provides a plan that unifies the team around goals and drives results.

To create a successful strategic plan for 2025, keep the following tips in mind:

Related: Strategic planning is essential for your business to succeed. Here's why (and how to do it right).

Identifying the ultimate goal: What are we trying to achieve?

More comprehensive strategic planning processes include an in-depth review of the previous year. This includes listening to the team about what worked and what specifically didn't work. Hearing from employees at all levels allows leaders to understand challenges and opportunities from those closest to customers, with the benefit of different perspectives. In the midst of a busy year, engaging in these in-depth reviews provides an essential opportunity to pause and take the necessary steps to analyze what needs to change to make the coming year more successful.

Encourage and implement an open and collaborative process

Encouraging and implementing an open and collaborative process helps identify accurate and relevant goals. By looking for data across the organization, CEOs gain the perspective needed to set direction. Great leaders balance their team's feedback with their own judgment to ensure that the goals for the coming year are challenging but achievable.

While setting goals is an important first step, simply writing them down will not bring them to life

To ensure that goals are being tracked with execution, each team aligns their individual plans with company goals once they are set. Effective CEOs devote time and effort to ensure diversity department goals don't inadvertently conflict with each other. To set the company up for success, a critical step in any strategic plan is to ensure that the right resources are invested toward achieving the goals.

Related: Setting measurable goals is critical to your strategic plan (and to your success). Here's why.

Key Performance Indicators: What will we measure?

A well-designed strategic plan focuses on three to five key performance indicators (KPI) that have the most significant impact on business. These metrics are priorities that require constant tracking to ensure accountability and keep the strategy on track. Tracking metrics with the team regularly creates full transparency. Having a real-time pulse on performance also allows the team to make timely and proactive changes.

When teams lack measurable metrics for success—or use metrics with inconsistent definitions across departments—performance can be compromised. Transparency encourages accountability, helps set accurate and actionable goals for the future, and ensures continuous improvement within the organization.

Defining the strategy: How will we execute it?

A effective strategic plan describes the specific actions needed to achieve the goals. Organizations too often create strategic plans that are overly complex, making them difficult to manage. This complexity can lead to the plan being neglected or abandoned mid-year, ultimately leaving goals unmet. On the other hand, a concise strategic plan can be easily repeated throughout the year, ensuring that employees are constantly top of mind as they approach their daily work. This helps employees focus on what's most important throughout the year – not just for the first few weeks after setting the strategy. Great strategic plans are also flexible by design and allow companies to adapt when unexpected challenges or opportunities arise.

Related: How to create a high performance strategic plan

When leaders feel like they have a good strategy but aren't achieving their goals, it can be helpful to ask different perspectives. Hearing from fellow CEOs who can open holes or provide new insights helps refine the strategy, ensuring it remains dynamic and effective. Those outside the company can provide a fresh, unbiased perspective and share honest feedback not always possible from internal stakeholders.

Each company's mission, vision, and purpose provide its long-term strategic plan, helping leaders decide which path to take when critical questions arise.. A thoughtful annual strategic plan provides leaders with a practical, short-term way to cascade that strategy at every level of their organization. Focusing on goals, metrics and execution provides clarity across teams and strengthens an organization's ability to turn long-term goals into tangible results. As we prepare for 2025 and all the unknowns the future inevitably holds, a comprehensive strategic plan is essential to deliver meaningful results for any business.