Over the past three months or so Intrafocus Insight has looked at the strategic planning process with reference to the Balanced Scorecard Institute’s Nine Steps to Success™. It is worth stepping back to look at the fundamentals of the process itself.
Strategic planning has changed. Not the process, that remains the same. It consists of narrowing down all of the things a business could do to be more successful to those few things it is going to do.
It is important to note the number of things is few. This is the first change. One of the biggest mistakes made during strategic planning is to try and fix everything. Too many objectives are described and too many initiatives put in place. There is an old planning adage:
If I try to do three things in a year, I will succeed in three, if I try and do six things in a year, I will succeed in one. If I try to do ten things in a year, I will succeed in none!
This is the “Law of Diminishing Returns”. The more I attempt to do, the less I will actually achieve. Why? Simply because I spread myself (available resources) too thinly across everything and cannot provide the effort/focus required to complete a project or task.
It is also a mistake to think strategic planning is a mechanism to set things in concrete. The is the second and major area where strategic planning has changed. Today’s environment is more fluid, more active, more innovative. Market conditions change so rapidly that it is important to bear in mind that unknown external factors might have a huge impact. It has even been argued that strategic planning itself should be abandoned, in a recent Forbes article, The Death of Strategic Planning: Why? Bill Conerly suggests:
“Inability to predict the future was the major cause of the death of strategic planning”.
Although he argues the point well, Conerly is still convinced that strategic planning has value, he goes on to say:
“Strategic planning helped company leaders lift their heads up and look at the horizon. The big picture emerged. Different divisions’ plans were described, compared and coordinated. Even though strategic planning had its faults, it had its strengths.”
The real point Conerly is making is that traditional methods of strategic planning do not work any-more. Sending the executive team off-site for a three day strategic planning exercise and having them return satisfied that each department has managed to secure a decent budget, is no longer going to cut it in today’s environment. Strategic planning today is not about creating a plan set in stone that will determine a budget for the next year or two. It must include a flexible output that has examined more than one possible future.
With the two attributes above in mind, that is, to focus on a few things and to have a flexible what-if approach, the strategic planning process actually remains the same as it has always been. The major elements are as follows:
Describe where you are today: It is important at this stage to “step-away” from the company or organisation and take a detached view. It is all too easy to fall into the trap of describing how you want to see organisation rather than describing the reality of the situation.
External research is always helpful here, bringing in an external agency is also a good idea but may not be affordable. Providing the individuals who undertake the research and presenting the findings can maintain an impartial view of the current state of the business and competition then this is all that is needed.
Define what is important: This is the area that executive management must spend quality time attending to. Based on the current situation and market forces, decisions at a high level have to be made about what a company or organisation wants to be famous for in the future.
One way to do this is to ask the question: “If in five years’ time we were all sitting a table, and we had been wildly successful, what would we have done?”
Determine where you want to go: The previous step is all about setting the direction. This step is about turning it into a reality. The direction has to be turned into a set of Objectives, that is what are the continuous improvements that need to be made and corresponding Initiatives, that is how are we going to make the improvements.
Don’t fall into the trap of defining initiative first. We are all keen to get things done, but the Objectives, the what, have to be defined first. The how, comes after that.
Assign responsibilities: assigning responsibilities is not really a step in its own right. However, it is so important it has been pulled out as a focus item. People do things. It is not companies, divisions or departments. It is people that actually do ‘stuff’. Therefore to get ‘stuff’ done, people have to be assigned.
Someone has to be held accountable for every objective, every initiative, and every measurement. It is important that they agree they are responsible/accountable. For changes to happen responsibilities have to be assigned.
Measure and review: Over and over again. A strategy is a live process. It should not be defined and sit on the shelf. It has to be as much part of the normally review process as any operational activity. It may not be reviewed as frequently, but it does need constant attention and modification. It needs to be measured and reviewed.
Where strategic planning has changed is in the mindset of the people undertaking the process, not the process itself. It is not about securing budgets or setting a fully defined path, it is about providing a direction that is appropriate for now with built in options that allow for change. If your company would like to know more about how to successfully undertake strategic planning, then look at the courses available over the coming year.