I had a Change Your Mind client who singed up for monthly sessions with the goal of becoming a C-Suite executive. She was a Strategic Planning Consultant who had successfully maneuvered her small client ($5K month) to a sale to an international client. She was retained and bumped to $25K month, and just starting to work with the European President and his team.
When I asked what her consulting process included, I was told there as a “team” – webpage, copywriting, etc. It took a while for me to discern the process was branding, not strategic planning. When her contract was terminated months early, I went on a quest to clarify what strategic planning really meant in the larger corporate world.
REFLECT:
How would you define strategy and strategic planning?
After reading 20+ books and dozens of articles, I realized case studies of strategic planning focus on successful and mediocre companies which are still in business – because the failed companies are out of business and unavailable for study. This begs the question: Did the failed businesses have a strategic plan, and if so, what went wrong with it? An unanswerable question.
After reflection, I I dubbed strategic planning “holistic navigating on steroids”. The deal breaker for leader effectiveness is around planning for uncertainty coupled with the with the flexibility to adapt to change. Uncertain / unknown conditions include: organizational capabilities changing, goals being met, goals needing to be modified, goals needing to be cancelled, innovation in the market, customers’ needs changing, competitors changing, — and the wild card of unanticipated events like COVID 19.
Successful strategists – organizational and entrepreneurial – develop a skill set for setting clear direction, knowing when to adapt / adjust to a modified direction, and how to guide and allocate resources toward that direction. Creating possible scenarios is a major element in this formula as well (see the blog on Strategic Scenarios).
Hilton CEO, Chris Nassetta, likens strategy to navigating on a freeway. Have a destination / plan and work the plan. Keep a steady hand on the wheel. And know when to change lanes and / or take an exit. Make sure the re-directions still lead to the future vision.
Those navigational choices depend on a holistic approach to an organization and its environment. The traditional visioning/ planning questions are insufficient:
Where is the company going?
What will it be like in —— years?
How will we get from here to there?
The navigation questions must include:
How is the world going to change in those years?
How will that affect our customer / client habits?
How does our company fit into that future world?
What do we have to do to adapt to that future world?
REFLECT:
Is there a strategic plan for your organization?
Designing a strategic plan requires vision, creativity and hard work by a team committed to future success. The plan has to be clear, concise and actionable. Brian Chesky, CEO of Airbnb, tells his team if they can’t put it on one page, they’re not simplifying it enough.
In his In his book, Strategic, Rich Horwath describes his SrategyPrint, a two- page form he uses in his consulting business to guide organizations through the process.
Page 1: Insights, priorities, and people
Insights are learnings that lead to new value. Priorities are the ranked activities, initiatives and projects that drive the business toward achieving the plan. People are the ones who help achieve the priorities, and the activities to build and nurture those relationships. Key people can include staff, customers, suppliers, vendors…
Page 2: Action Plan
The action plan answers the questions:
What are we trying to achieve (our goals and objectives)?
How will we achieve it (our strategies and tactics)?
While clear, concise and actionable, this approach does not address the future unknowns and the need for flexibility and adaptability. It is planning without holistic strategy.
APPLY:
Use this format to create a plan – professional or personal.
Horwath identifies “fitnesses” for strategy, including Resource Allocation Fitness. It reminds me of a conversation I had with a high level CEO about
(1) what he learned working at NASA for decades
(2) what his first action was to lead a miraculous turnaround at a high tech company that was failing.
His response:
(1) At NASA, he learned anything is possible
(2) As CEO, his first act was to replace the coffee machines with vending
machines, which sent the instant message “we’re in trouble: it’s time for big changes.” (This down-home approach was validated by a later research study that showed test subjects provided with fewer resources became more motivated).
The questions NOT asked in strategic planning are often about the process of Resource Allocation. Resource Allocation covers time, talent, and budget. It reminds me of the efficient vs. effective approach. Efficiency is doing things right: effectiveness is doing the right things. For instance, having my spice rack in alphabetical order (being efficient) doesn’t make me a good cook (being effective)!
For resource allocation, Horwath says it’s time to plant, grow, or prune in each area of the organization. Planting provides resources to a new area that can product value. Growing is using resources to maximize value to the organization and customers. Pruning is cutting back by removing resources from a less favorable / successful area. In a survey of 463 managers asked if their senior management cut off unsuccessful initiatives quickly enough, 52% responded NO. Think of the wasted resources that represents that could have been used to good value.
However, conversations around resource allocation can be a land mine among staff. In one of my consulting jobs, I was hired to facilitate a budgeting session for a small town mayor’s council. The council members were also program managers who were in heated competition for the money. When the council came into the training room, there was a bowl of marbles at each place. Each bowl had different pattered marbles, so each council member had his/her own kind of marbles.
In advance, I had identified the total budget amount, bought a supply of different patterned marbles, and divided the marbles up by council members’ proposed budgets. Each marble was worth $50K, and each program manager had a bowl of marbles in accordance with their budget. A bowl of 10 marbles meant a budget of $500K.
Their assignment was to get more marbles wherever they could. And I sat down. The council members engaged in dialog about programs and customer value. They identified overlaps, possible consolidations and resource sharing. They finalized the budget with good feelings all around. They totally exceeded my expectation and desired results! And I got paid to sit and watch.
Strategic: The Skill to Set Directions, Create Advantage, and Achieve Executive Excellence, Rich Horwath, Wiley, 2024.
