Whether attending or coordinating, annual strategy events can be burdensome. Plus, most strategic planning processes fail. Either they fail in developing the right strategies, or they fail in driving effective execution. The most common reasons include:
Not having a clear roadmap for how planning is done: Often people forget the strategic planning is itself a process, and as with every other process, setting clear goals and execution paths mitigate chaos and confusion
Relying too heavily on large quantities of data: Pulling up a mass of data is easy, but using streams of bubble charts and waterfall diagrams in an attempt to drive decisions can often drown decision makers. More important, is creating an effective environment for discussion, debate and decision making
Lack of integration between business groups: While day-to-day business operations are often done in a silo, large-scale decision-making should incorporate and consider financial and strategic planning as well as accountability for local execution
Strategic planning backed by data
At The Spur Group, we work with many companies on managing their annual strategic planning efforts—from Fortune 100 companies to startups, from corporate-level planning to group or division level. Our approach doesn’t just come from our successful client work. It isn’t an abstract exercise for us. We’ve spent many years of testing these concepts internally against our own planning processes.
In this three-part series, we'll focus on a proven methodology for strategic business planning:
Part 1: This blog focuses on how to plan for strategic planning sessions
Whether you’re participating or coordinating, annual strategic planning efforts are easy to get wrong. So before you ever step into the boardroom, consider these four lessons we’ve learned in effectively planning business strategies.
1. Define strategy as informed opportunism
Borrowing from consultant and Wharton professor of Executive Education Joe Ryan, strategy is not only developing a smart plan based on the best available information, it is also being agile enough to adapt that plan based on opportunities or threats that may emerge during the life of the plan. There is no doubt that strategic plans are important, as typified in the many quotes from famous business and military leaders who argue “failing to plan is planning to fail.” There is also no doubt that it is foolhardy to stay locked into a plan that’s bad and to not have a clear way to adapt as needed. Once again, many military leaders from Sun Tzu and Von Clauswitz and others have said, “All plans are set until the first shot is fired.” Or simply put, Mike Tyson’s “everyone has a plan until they get punched in the face.” So the key is to develop a process that allows for both an informed approach to structured planning and an opportunistic approach to modifying that plan as needed to adapt to changing conditions.
2. Enable effective debates around real choices
To paraphrase Peter Drucker and Michael Porter, “Strategy” is about answering two questions: “What business are you in?” and “What business should you be in?” You need to create a forum where leaders make explicit decisions related to these choices. It is as much about asking “What are we going to do?”, as it is about asking “What are we NOT going to do?” or “What are we going to STOP doing?” To plan correctly, you need to design an environment within which executives can have thoughtful, structured, rigorous debates about real choices, not get stuck in a perfunctory set of “yes” meetings. Those debates need to direct the participants to specific decisions that will cascade throughout the organization and the rest of the planning process.
3. Develop a strong process with accountabilities
Strategic planning needs to be a process, with analysis- and ideation-related activities that lead to critical events where decisions get made. Without a process, planning turns ad hoc and chaotic. Therefore, corporate planners need to be rigorous in developing process and accountability models. You need an approved calendar that outlines when things happen, what gets decided, what deliverables get created, and how those decisions and planning artifacts get cascaded and affect downstream activities.
4. Build a strategy planning process you can execute
Strategic planning is often a difficult process that taxes the planning teams, executives, and others who responsible for analysis, ideation, decision making and execution. Your process needs to actively account for resourcing of key steps, executive engagement at the right time and in the right way, and that local teams have the skills and capacity to land and execute the plans.