A few months ago, I attended an open house at a local high school. The headmaster started his address to the families in attendance by rattling off a long list of products and services that didn’t exist 10 years ago, but that have since changed our lives, both individually and collectively. How does an organization plan strategically in such a rapidly changing context, especially one that is responsible for teaching the future generation of leaders?
He had a good point. In my early days with a big company in the year 2000, we were asked to “do” a 10-year strategy. That involved entering reams of data into an excel spreadsheet and doing lots of brain-numbing analysis to try to come to conclusions. The resulting strategic plan went through endless reviews with different levels of management, ultimately culminating in a final review with corporate headquarters. The whole process took 5 months and many hundred person-hours annually, and it gave no thought to execution. This approach to strategic planning is neither relevant or useful.
Over time, the strategic planning horizon at that company was adjusted to three years. However, it was still largely the edict of senior management, and a program management aspect was added to the process to cascade the strategic initiatives to specific leaders. The strategies thus had a chance of seeing the light of day. This approach to strategic planning is more relevant and useful than the first, but only marginally, given today’s context.
Today, the rate of change in the world is beyond what any of us have ever experienced. There’s an incessant focus on innovation and on entrepreneurship, with a depth of financial support to innovators and entrepreneurs that few of us can understand. Companies with rigid processes, strategic planning included, are losing out. Companies whose leadership teams lack diversity of knowledge are also losing out. Having a solid – not rigid – strategic planning process is essential to making sense of the complexity and bringing diversity to the able, to ensure that the best new initiatives are given appropriate backing.
Other benefits of a strong strategic planning process include:
- Establishing a common understanding across all stakeholders of its mission, vision, and values;
- Knowing where to assign resources and focus to achieve the desired strategies;
- Identifying risks and opportunities that could undermine or enhance their achievement; and
- Engaging key stakeholders in the definition and execution planning of strategic initiatives.
Thus, strategic planning itself has never been more relevant – or more important. The macro-environment is rife with uncertainty, yet the number and quality of opportunities available to all businesses are unprecedented. The work force has changed dramatically to include more people with graduate degrees, more freelancers, and expectations with respect to non-monetary benefits such as flexible work arrangements. So along with macro changes, companies’ micro-environments have changed, and approaches that worked 10 years ago are today sub-optimal.
Rather than depending on people to enter data and do analyses, today’s strategic planning process depends on people for a keen awareness of current events and technological trends. A solid strategic plan also incorporates human element information, such as employee engagement and enablement. These inputs to the strategic planning model are sometimes overlooked, as companies focus on industry-specific information on competitors and suppliers. An understanding of a much broader picture must be incorporated into ongoing discussions about strategy.
Successful strategic planning today depends on information that often comes from unusual sources, or sources outside one’s own industry. Employees know a lot, and so do clients, subcontractors, and those who have nothing at all to do with whatever industry we happen to be talking about. Strategy discussions and strategic planning are both incomplete if there is no process to facilitate discussion about new knowledge. Only with knowledge of what’s going on in other industries and in the world can organisations dream about big possibilities for their businesses.
The role of a leader of an organization or of a department, then, is to facilitate a process of ongoing discussions about strategy and to underscore the importance of a solid strategic planning process. A solid, not rigid, process, will leverage diverse information sources to dream big about an organizational strategy. The strategy will be aspirational, it will provide an audacious vision and mission. A thorough strategic planning process will take it from there, outlining the initiatives towards that strategy. It will also encompass a governance protocol, which includes strong communication, about both progress and changes in the macro or micro environments. This allows leaders to course correct to achieve the strategy. Given the complexity individuals and organizations are faced with, strategic planning is more relevant today than ever.