I was asked recently why you need a Strategic plan and how you make a Strategic Planning Process successful. At the time I answered glibly that as I would be involved in the process, I would have to say that I, Myself & Me were the magic ingredients.
Let me first consider what happens if you do not have a strategic plan. There’s a proverb which is supposed to be Japanese (which probably means the provenance is unknown) that says:
So you need a vision to know what you are aiming at, together with a plan of action or a strategy to know how you are going to achieve your vision.
So the risks of not having a strategic plan include:
• Not being prepared for changes in the environment that your organization is facing
• functions or individuals in the organization following their own agendas
• inconsistent communication to customers, staff and stakeholders
• inefficiencies and ineffectiveness throughout the operation.
So back to the main question: What do you need to have a successful (or potentially successful) Strategic Planning Process?
The first clue is in the question. To be successful there has to be an ongoing PROCESS. Strategic Planning should not be relegated to an annual “event”. The strategic planning process should be part of the fabric of an organisation, a living document, and very definitely not the contents of one of many dusty ring-binders on a CEO’s top shelf.
The second aspect that is crucial is to understand that while a Strategic Plan must have a long term perspective; it can only be achieved through short term activities. This thought has the added implication of reminding corporate leaders that their lofty objectives need to be broken down into chunks that can be digested and implemented by lesser mortals.
My third area is the Environment. When creating a strategic plan you need to examine the external environment and try to foresee the impact that this environment could have on your company over the next few years. Different aspects of the environment will have more or less impact depending on your business arena. The areas that are commonly considered include, political, regulatory, economic, social, green environment and technological.
As important as these macro issues are, you probably need to give even more attention to your competitors, customers, consumers, suppliers and vendors. You should know as much about all of these participants in your market place (or components on your value chain) as you do about your own organisation.
My fourth area would focus on your own company capabilities and operating culture. If your strategic planning process is going to result in an effective strategy, you must understand and acknowledge your company’s capabilities in all areas.
This is a tricky area because many of us wear the so-called rose coloured glasses where everything looks slightly better than it is. Let me digress for a minute to tell you a real story. I met with a CEO of a packaged goods business and asked him what the three key capabilities his business had, which positively differentiated them from their competition. Among the areas he mentioned was their speed of decision making, their nimbleness in taking advantage of a fast evolving market, their entrepreneurialism. All good stuff and really all linked. I subsequently talked about these areas to a range of middle managers in the organisation. They were surprised to say the least. Their view was that the decision making process was laboured and bureaucratic resulting in bottlenecks and delays in effecting key decisions.
Different descriptions of the same business. Surely one must be wrong?
Further investigation demonstrated that each party was right from their own perspective. Once decisions reached the CEO and his senior management team, they were incisive and quick. What was not fully appreciated was that department heads were sitting on decisions, tweaking areas, demanding more information, before the proposals even reached the CEO.
Anyway enough said….. You must understand your real capabilities not the ones you would like to have!
The fifth aspect you need to embark on a sound Strategic Planning Process is a sense of direction coming from the top. A common focus provides direction. A short, simple, inspiring vision created by the leader establishes the stretch for the organization in the direction of where it wants to go.
The last area takes me back to that Japanese proverb. Remember the bit that said “Vision without action is a daydream”? You need to bear that in mind when you sort out the participants for your Strategic Planning Process.
Participation in the strategic planning process is key to the plan being successfully translated into action. Everyone in the organization should, at some point, be involved in the strategic plan. People tend to own what they help create. It also works to create a common culture throughout the organization and reinforces the need to get behind the organization’s future direction.
So that’s my six core components for a strategic planning process. There are others to be sure, but start with these and you will have a great process that will result in a clear single-minded direction for your business, a business that understands itself and its environment and a business which has the internal commitment to turn great words into successful actions.
In the words of another Japanese proverb, “Nito wo ou mono wa itto wo mo ezu”
And if your Japanese is a little shaky “One who chases after two hares won’t catch even one.”
If you’re interested I can talk more about strategy itself, rather than the prerequisites for a strategic planning process….let me know.