It’s that time of the year again. Managers pull from their desks’ drawers last year’s strategic plans; meetings are held to perform the habitual SWOT analysis (the acronym stands for Strengths, Weaknesses, Opportunities and Threats); company mission and vision statements are reformulated; unending lists of projects and “strategic initiatives” are written; timelines are specified and task owners are assigned.
Yet, despite all claims of engaging in strategic planning and the comfort the ensuing product may give, both the process and the outcomes rarely come close to genuine strategic thinking.
As we help those that have fallen victim to what we consider to be “ritualistic strategic planning”, we’ve identified three underlying themes that are common to most cases. Detecting and eradicating these themes – errors in thinking and in execution – is instrumental in rescuing the strategy formulation and strategy deployment process, critical to any company’s development and growth.
The first common error we’ve found is embracing a one-year horizon. Yes, I can almost hear what you’re thinking. It’s become the standard response of many executives: “You just don’t understand our industry. Forget about five year horizons. Things are changing so fast, no one can really know what it’s going to look like two years from today.”
The claim rings as true. After all, change is the only thing that is permanent; and accelerated change is definitely a sign of our times. However, the fallacy behind this error lies not on whether change is ever present. It lies on assuming that in order to plan for the future, we need to predict it.
Granted, looking beyond the immediate present is difficult. It requires huge doses of keen observation; the development of foresight regarding industry and market trends; the creativity to imagine future scenarios; and the ability to anticipate thoughts and actions of customers, competitors, and other players in your industry. This can be an exhausting task. However, the insights you and your team will develop from this process are priceless.
The second common error we find is a failure to identify, name, and face the challenge or key challenges the organization is encountering. The essence of strategic thinking is always the same, whether in sports, in war, or in business: discovering the critical factors in a situation, designing an approach to deal with these factors, and specifying the coherent actions required to implement the response.
If you can not name the challenge you are trying to overcome, you cannot assess the quality of your strategy. If you haven’t thought through and analyzed the obstacles to your overriding goal, you don’t have a strategy. You may have a stretch goal; you may have a financial budget you expect to achieve; you may have a compelling vision; or maybe just a list of outcomes you desire. None of these are bad in and of themselves; but they are not strategies.
A good strategy incorporates your perspective about the current situation and your approach to tackling the situation. By approach we mean a high level description of the method you attempt to use. The details of making this happen will come later. Strategic thinking is all about diagnosing the state of affairs and thinking about, designing, and formulating the approach to dealing with the situation.
Take a close look at your strategic plan. When key challenges are not precisely identified, “strategic plans” end up being a laundry list of project, a salad bar of tasks, or an encyclopedia of activity. Do you have a laser beam that can shatter the vital few boulders in your path or a garden sprinkler caressing every pebble on the lawn?
The third common error to strategy formulation is, ironically, lack of strategic thinking. This error goes hand in hand with the previous two.
Consider how strategic planning “sessions” are, all too often, held. A group of managers are identified as participants. They are invited to the strategic planning session but rarely requested to do any pre-work. Most strategic planning “events” are designed as intense motivational celebrations. An inspiring theme or motif is chosen; suitable speakers are identified; decorations and artifacts are constructed. Within this context, participants are invited to “brainstorm”. Ideas fly and key “strategies” are agreed upon, to be later broken down in objectives, initiatives and projects.
Absent from all this activity is profound thought about the situation, incisive questioning of the assumptions held, or a comprehensive diagnosis of the fundamental relevant factors. There is nothing wrong with proper doses of inspiration and motivation. However, but don’t confuse wishful thinking with strategy.
Strategic thinking is one of the most enriching, invigorating, and exiting exercises in management. It may be tough work but, when taken seriously and properly done, the payback is enormous. Avoid the traps mentioned above and you will be on to a good start.
Copyright 2013 QBS, LLC