We all know the drill. Take the senior management team off-site for a weekend. Evaluate last year’s performance. Conduct the basic SWOT (strengths, weaknesses, opportunities and threats) analysis. Set some goals for the upcoming year. Pat ourselves on the back for a job well done. Play a couple rounds of golf. Return to the office Monday morning and get back to the business of running our businesses.
This process may vary from company to company, but the basic model remains the same.
Well, I say the time has come to put this sacred cow out to pasture.
Back when the world moved a lot slower and markets didn’t change overnight, the traditional strategic planning model served us quite well. It got business leaders to rise above the day-to-day minutia of running the business and focus on the big picture. And it gave everyone a sense of direction and purpose, at least for a little while.
But as we all know, the world has changed dramatically since this planning model was first introduced. We still need to plan. In fact, planning is probably more important than ever. What needs to change is not so much how we plan, but why we plan and how we go about implementing our plans. We also need to change how we think about the planning process.
Traditional strategic planning involves looking out three to five years, predicting where your industry will be, and setting a firm course in that direction. Once the plan has been crafted, it gets rolled out with great fanfare, and for about one-tenth of a nanosecond everyone in the organization is actually working from the same page.
But then a curious thing happens. Management typically puts the plan high up on the shelf and leaves it there. They stop communicating with employees about the strategies and goals included in the plan. And they assume that the plan will unfold exactly as written.
Instead of monitoring the plan on a regular basis, management sits back and waits for it to magically happen. When it starts to get off track, as every plan does, management typically adopts a wait-and-see attitude, preferring to ride out any bumps in the plan rather than make any “unnecessary” adjustments. The end result is a business that struggles to achieve its goals. And one in which most employees have no clue where the organization is headed or how it will get there.
What does the new strategic planning model look like?
For starters, it looks a lot more fluid and flexible. You still set a target destination, but one that doesn’t look nearly as far into the future. And you still set intermediate goals and action steps to help you reach your destination. But instead of putting the plan up on the shelf to gather dust, the focus shifts to monitoring and measuring the plan on a regular basis and making adjustments in response to changing market conditions.
Here’s a quick comparison between the old model and the new:
Old model: Plan three to five years out.
New model: Plan 12 to 18 months out.
Old model: Look at last year’s numbers and set this year’s goal three to five percent higher.
New model: Set this year’s target based on the opportunities available in the market, on what achieving excellence in a new (and constantly evolving) game looks like, not on what happened last year.
Old model: Set a firm target and a firm route for getting there.
New model: Set a firm destination and build in plenty of flexibility for how you will get there. Enable those closest to the work to make day to day decisions based on the getting to the destination.
Old model: Announce the plan at the beginning of the year and then never say a word about it beyond sporadic management meetings.
New model: Constantly communicate the plan to all employees, using a variety of methods and media. Continuously address â€œhere is why we will still winâ€ even when markets and conditions shift or plans unfold unexpectedly.
Old model: Put the plan on shelf to collect dust.
New model: Review the plan on a regular basis. Ideally, once a month. Once a quarter at minimum.
Old model: Invest a lot of time and energy in creating the plan. Then hope it happens.
New model: Make implementing the plan a priority. Keep it in front of yourself and everyone involved. Talk about it, measure to it, and modify it as needed. This includes making quick mid-course corrections based on changes in your markets and customer needs.
Our business world has become too complex and moves far too quickly to waste time and resources crafting rigid strategic plans that become obsolete before we get halfway through. Success in today’s volatile markets requires moving from strategic planning to strategic agility.
The former is a once-a-year event. The latter is an ongoing process that allows you to respond quickly without losing focus when disruptive change blows up your marketplace.
Stay tuned for more on developing strategic agility.