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…...is “Why?” When I first talk to an organisation’s leadership team about helping them develop a strategic plan, I am sometimes asked how long it will take, or what the final document will look like. Yet the most important first step is to understand why they think the organisation needs a strategic plan: what are the issues it faces, what is the real reason for undertaking such a process, what will be most useful in helping it achieve its future goals? Answering these questions helps determine the nature of the ‘strategy journey’ on which the organisation is embarking – indeed, often it can be the first part of such a journey. And as a result both the process and the outcomes can be quite different from what might have been envisaged originally. A survey of nearly 800 executives conducted by McKinsey last year showed that although over 75% said that their organisations had a formal strategic planning process, fewer than half were satisfied with the approach. Interestingly, only 23% said that the process was key to making their company’s most important decisions. It’s helpful here to think about the concepts of strategising and organising (the subject of the July issue of perspectives). In many cases, strategy is formed outside a formal strategic planning process – through responses to competitors or regulation, merger and acquisition opportunities, reviews of specific issues, or ad hoc meetings and conversations – the strategic plan might simply help to crystallise, consolidate and communicate the resulting strategy (and it can be a powerful focal point to achieve this). Sometimes, more time is needed to develop a strategy than fits into the current planning timetable – issues are uncovered that require deeper insight and understanding, and to short-cut this can compromise an effective outcome. Often it is the organising aspects of strategic planning that are the focus: agreeing priorities, setting targets, deciding which initiatives will be progressed, allocating resources for the next couple of years. In this case the emphasis is on an effective planning process - and organising for a successful implementation (something that’s too often overlooked!). But it really does depend on what the situation is for the organisation at that particular time. The two considerations are: what’s happening externally, what might be changing in the market environment, and how significantly or radically; and what’s the state of the organisation internally – how prepared or adaptable it is, how well it understands and learns, how ‘healthy’ it is. What’s required for an organisation with a clear position in a relatively stable environment is very different from one that’s at a different stage of its development or in a very turbulent market. Strategic planning in the former might concentrate on incremental adjustments, to strengthening its capabilities, and planning its development. If its position is less well understood, it might focus its energy on encouraging a strategy to emerge. When there is radical change and uncertainty however, defining direction and ‘strategic intent’ might be most useful - spending too much energy on very detailed plans that will almost certainly become overtaken by events would deflect attention from addressing how the organisation can become more adaptable and responsive. There is a real danger in adopting a standardised, textbook approach to strategic planning – at the very least it’s an opportunity lost. Whilst they have their place, processes that consist primarily of collating data to defined formats can lead to more fundamental issues not being addressed – or not encouraging the type of strategic thinking that could be a vital capability for the organisation’s longer term health. On the other hand, neither is it always appropriate to undertake a fundamental strategic review of the business, and spend time trying to fix what isn’t broken! Sometimes it can be more valuable just to consider what progress has been made in implementing the current strategic plan, and deciding how to modify or strengthen this. So, asking the right question before embarking on a strategic planning journey – and ensuring it is answered - is the key to making it a success. |
