The Truth About Strategic Planning

Smiling Man with hand on chin

A Practical Guide to Planning Your Plan

STRATEGIC PLANNING is one of the most important and most misunderstood business processes. The word “strategy” shows up in just about every layer of an organization. Managers need to be good strategic thinkers; executives attend strategic retreats, and the board of directors approves budgets that support a strategic plan. Often, strategic thinking and planning have become nothing more than goal-setting. Additionally, companies fail to see the relationship between company culture and the ability to implement innovative strategies. Nor is strategy-making seen as the beginning of change management. In this article, I will answer three common questions:

1. What is, and what is not strategic planning,
2. How to prepare for a strategy session,
3. What goes into a strategic planning session.

What is, and what is not strategic planning?

The misconception about strategic planning is that it is an exercise to develop goals. A strategy is a hunch for the kind of value a company or a team could provide to win new business. Roger L. Martin, in his Harvard Business Review article, The Big Lie of Strategic Planning, explains it this way:

“Focus your energy on the key choices that influence revenue decision-makers—that is, customers. They will decide to spend their money with your company if your value proposition is superior to competitors. Two choices determine success: the where-to-play decision (which specific customers to target) and the how-to-win decision (how to create a compelling value proposition for those customers).“

Strategic planning is not goal setting, and therefore it has nothing to do with operations. A strategy is a bet one places on how things should go. And the path to developing a strategy takes one into the unknown. Therefore, strategic planning will involve change management. The downstream outcome of a new strategy might affect goals, values, and ways to improve employee performance. However, developing strategies is its own, stand-alone activity. Fear and discomfort are essential parts of strategy-making. As Martin says, “if you are entirely comfortable with your strategy, there’s a strong chance it isn’t very good.”

How to prepare for a strategy session?

The best meetings require a lot of thought and planning. Unfortunately, most people don’t address three areas in designing their strategic planning meeting:

  1. Who should attend? The usual suspects include the executive team. But don’t forget to include people representing divergent thought. Also, remember people commit to those things they have a say in designing. So, invite “the implementors.”
  2. How will the meeting be facilitated? The senior leader who facilitates a strategic planning session can’t fully participate. And, whatever they say will have more weight because of their elevated status. A third-party trained strategic facilitator will work with management to design the session and be “the keeper of the process” so everyone can fully participate and be held accountable to the meeting’s code of conduct.
  3. How will the strategic plan be implemented? Most people don’t think beyond the strategic planning session and fail to answer: When and how will we develop an operational plan; how will we communicate the latest strategies to employees, the board, and the community; what kind of behavior change do we want to influence; and how will success be measured in the future? Plan beyond your strategic planning session.

What goes into a strategic planning session?

Context is everything. Every company, market, and team is different. A cookie-cutter approach to strategic planning cannot address each team and company’s unique challenges and opportunities. That is why each strategic planning session must be customized.

A powerful strategy is a call for change and transformation. If the status quo were acceptable, strategic planning wouldn’t be needed. The team in charge of developing and implementing the strategy must also transform. This is why it is essential to include team development in the strategic session.

A SWOT analysis is often an excellent way to help the team understand the health of the organization by assessing Strengths, Weaknesses, Opportunities, and Threats.

“Only three out of ten organizations
have the culture they need for future strategies.”
– Boris Groysberg.

Strategic planning fits into a family of planning discussions.

They include:

Vision: An aspirational call to action that may take several lifetimes to achieve. “Ending unemployment in Arizona” is the vision statement for Goodwill of Central and Northern AZ.

Mission: The answer to five questions: Who are we, what do we do, for whom do we do it, how, and why? At MFI our mission statement reads: “Mission Facilitators partners with leaders and their teams by providing the vision, tools, and support needed to craft robust solutions to address challenges and meet and express their mission.”

Strategies: These are the primary, high-level themes or bets that define the value proposition that will inspire clients to do business with you. “Take complete control of the supply chain by investing in companies that make batteries,” is one of Tesla’s strategies.

Goals: Now, we are getting into the operations-side of planning. Goals define the outcome, timing, and who has authority. The popular SMART goal model stands for Specific, Measurable, Attainable, Relevant, and Time-bound. For example, “The sales team will increase west coast sales by 22% by October 1, 2021.” This goal meets all the SMART requirements.

Values: These words and phrases define the kind of culture and people that are needed to fulfill the vision and mission. Values can also be aligned to succession planning, leadership, team development, and engagement efforts. The best values reflect actual behavior. “If you take care of your employees, they will take care of the clients.” – Virgin Airlines.

Budget: Some companies make the mistake of starting with the budgeting process by asking their teams to plan around financial boundaries. This approach is risk-averse and squelches innovation. When budget discussions are placed at the end of the process, two things can happen 1. New revenue-generating ideas can be explored, and 2. if the budget can’t support the goals and strategies, adjustments and negotiations can still be made without losing the benefit of prior planning discussions.

Team development tools

There are several out there but a few to mention:

1. Social Agility or other communication style assessments,
2. Creating a meeting code of conduct,
3. Deciding on how to decide: What is the decision-making process?
4. Simulations and breakout groups designed to increase trust, effective conflict resolution, shared commitment, accountability, and clarity around results.

Strategic planning has the potential to transform companies if leaders have the courage to challenge status quo thinking, separate strategy-making from goal-setting sessions, improve team dynamics and focus on the needs of the customer.

Key takeaways

A strategy is a hunch for the kind of value a company or a team could provide to win new business,Strategy-development is separate from goal setting and planning,Involve those who have to implement the strategy in the design of the strategy,Include team development in the planning process.

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“Planning typically isn’t explicit about what the organization chooses not to do and why. It does not question assumptions.”