Without a properly executed Strategy Plan, you’ll never get the successful results you desire. Instead of shaping the environment and controlling the future, your organization will scurry to adapt to the chaotic events attacking from all sides—like Newtonian billiard balls bouncing off each other in random fashion. You’ve surrendered the future to the whims of fate.
Strategy planning is an exercise in prediction based on what worked and didn’t work in the past, which unfortunately you’re biased toward. Strategic thinking requires that you expose your core competencies and strengths to new possibilities, while reducing or eliminating weaknesses linked to the past.
You have an organization of alert, intelligent, committed people. They’re invested in the mission of the company and the course management has set, so it’s in your best interest to involve as many as possible in the strategic thinking process. Directly collaborate with those on your team that are charged with executing the strategy. Including them does a number of things: it creates a mastermind of thinking, it affords them ownership of the plan and commitment to the results, and it’s a great way to test assumptions. The process must be integral to the daily work of the business, not in addition to it. It can’t be an occasional activity, or three-day workshop.
To develop strategic thinking across the organization, engage people in the following activities:
Scanning the environment: Sensitize your people to be aware of what’s going on around them. Reinforce a heightened awareness to the language and actions of customers, vendors, and other companies that [can] support the business in strategic ways. Give your people a context of relevance so they know what they should be looking for; like a spectator gazing at a professional hockey game, he must know what to look for or the game will be a nonsensical blur. Provide them a formal means for channeling information back to the organization. Set up regular discussions with the core strategic team to review the observations.
Processing information: Encourage your people to challenge the current state of the business, from the new information garnered from scanning. How does this information fit into the current business model? If it doesn’t fit, does the business model need to be revised? To provide a diversified perspective, the strategic debate should include individuals from all organizational disciplines. Objectivity is key, nothing should be sacred—you must kill your pet darlings if necessary. Consensus is important and don’t leave the financial people out of the conversation.
Scenarios: Get them to think in terms of “what if…?” scenarios (What if we wanted to open up a new geographical market in Thailand?). Base it on your vision, mission, and value proposition, but focus on only one piece of this puzzle at a time. The total picture will soon come into view.
Questions: Develop a list of pertinent questions for the team to answer. One of the keys to strategic thinking is laser-like focus; both questions and answers must be specific, not vague. If a question cannot be answered with concrete certainty, move on to the next topic; you may or may not return to the unanswered point in question because it has been determined no value is added. Asking strategic questions is like panning for gold; is there hidden treasure in each question and answer? Strategic questions must be thought provoking and challenge present assumptions, create discourse energy, and lead to additional interrogatives that inspire insightful discoveries. Stick to questions that will be consequential to the future of the business.
Usually there will be three to five core questions: “How do we differentiate ourselves in the market?” “How do we identify and take advantage of our competitor’s shortcomings and mistakes?” “What can we do to disrupt the market?” “How can we increase value to our customers?” “What ancillary markets are available to us vis-à-vis our core offerings, or modifications to them?”
Choices: All this information leads to the hardest question of all: How have we shaped our future, what does the future landscape look like? Consider all options, even if they don’t at first make sense. Test assumptions by working backwards from the future outcome. You’ve projected what the market will be in five years; have you best positioned yourself for that market? Now determine the yearly quintessential choices and steps to achieve the desired outcome. You’re not in a problem-solving mode when considering your choices. You’re not attempting to fix problems or seek solutions; you’re looking to increase business and value to the marketplace.
Planning: Now that strategic choices have been delineated, a tactical action plan needs to be developed—who, what, how, and when to do it; tactics come after strategy. Every nuance of the strategy must have a tactical plan and it can’t include “hope.” You can’t hope it’ll work; you must be exact to the point you knowit’ll work. This is why it’s so important to involve people who’ll be responsible for the tactical execution; they’ll not only be committed, they’ll buy-in 100%.
Executing: The finance people will do their profit-and-cash-flow forecasts, and because everyone is under the ether of this—you should pardon the expression—“wondrous plan,” all the numbers will have to fall in place. Regrettably, it doesn’t work that way. The key is to stay agile, recognize when an assumption or choice was incorrect, or the environment has changed, and you need to alter direction. But be wary, altering course too often is a prescription for disaster. It means your strategy isn’t viable, which will crush the morale of anyone trying to execute the damn flawed thing.
Engage as many of the natural strategists in the organization as possible in developing the strategy, but be careful—not everyone has the wherewithal to strategize, or will want to participate. Some will just want to be told what to do. Those that do participate will appreciate it.
If strategy planning is new to your organization, there are tools available to help facilitate the process. I recommend you evaluate each of the following to determine its usefulness to your organization:
- The most often-used tool is SWOT analysis: Strengths, Weaknesses, Opportunities, and Threats, normally done in a four-box matrix. It’s a great exercise for large groups, as it’s more effective with a diversity of opinions.
- The Boston Matrix is a measurement of how successful a company’s products are compared to competitors’ products, calculated by looking at each product’s share of sales in its particular market and that market’s rate of growth.
- Porter’s Five Forces Analysis is a framework to analyze the level of competition within an industry and how it relates to strategy development. The five forces are: threat of new entrants, threat of substitute products or services, bargaining power of customers (buyers), bargaining power of suppliers, and intensity of competitive rivalry.
- PEST Analysis helps you analyze the Political, Economic, Socio-Cultural, and Technological changes in your business environment. It helps you understand the “big picture” forces of change that you’re exposed to, in order to take advantage of opportunities.
- Critical Success Factors (CSFs), or Key Results Areas (KRAs), are the essential areas of activity that must be performed well if you are to achieve the mission, objectives, and goals of your strategy.
- Then there’s the Hedgehog Concept, based on an ancient Greek parable that states: “The fox knows many things, but the hedgehog knows one big thing.” In the parable, the fox uses a variety of strategies to try to catch the hedgehog. It sneaks, pounces, races, and plays dead, but all it ever gets is a nose full of spines. The hedgehog knows how to do one thing perfectly well: defend itself.
Philosopher Isaiah Berlin took this parable and applied it to the modern world in his 1953 essay “The Hedgehog and the Fox.” Jim Collins developed this idea further in his 2001 business masterpiece Good to Great—a must read. According to Collins, organizations are more likely to succeed if they focus on onlyone thing, and do it better than anyone else. If you’re not going to take my advice and read the book, you can find a lot of information about the concept on the Web.
You don’t have to make the strategy-planning process as complicated as landing a man on the Moon, which happens all too often, when you strictly adhere to textbook processes; it’s got to flow freely and build on people’s ideas.
About The Author
Ken Tasch, inventor of the LAUNCH™ Selling and Business Capture System: a simple and easy way to significantly increase the odds of winning new business. I recently retired from over 40 years of starting my own businesses and managing businesses for corporations. My goal is to help others succeed, to grow and be more than they ever dreamt they could be; to give back and share my life experience.