A Strike of the Eye - why good planning allows intuition to flourish

Everyone likes to think they’re good at being ‘strategic’, yet it’s surprisingly rare for businesses to consistently apply good quality strategic thinking, planning, and implementation.

What goes wrong, and why?

What is this ‘strategy’ stuff, anyway?

Read on for:

• How to spot the most common pitfalls – where do strategies typically fail?
• A simple and practical definition of strategy.
• Key components of good strategic thinking and planning.

Strategy - a brief history and common pitfalls

Since the 1950s and ‘60s the gospel of strategic planning has spread throughout the business world.

It’s now ubiquitous; part of the fabric of standard management doctrine in virtually every company globally. Whole consultancy careers and firms are built on the concept of strategic planning.

In the early days of the 1950s, thanks to Henry Ford Jr’s “Whizz Kids”, almost all business ‘strategies’ amounted to some elaborate budgeting and forecasting – top-down financial models which presupposed that all components, variables and people involved were ‘rational actors’ (cue every non-accountant, non-consultant, and non-economist saying, “Rational? Have you ever met people?!”)

Strategic theory has moved on a lot over time (although, sadly, it’s still commonplace for some business to fall into the trap of mistaking a ‘budget’ for a ‘strategy’).

Nowadays the best planning models recognise human irrationality is the norm not the exception (for more information read up on the field of Behavioural Economics – works like ‘How to Change’ by Katy Milkman, ‘Nudge’ by Richard Thayler and Cass Sunstein, and ‘Thinking, Fast and Slow’ by Daniel Kahnemann).

At a bare minimum, strategic models now at least recognise three key fallacies that typically work against the effectiveness of strategic planning:

1. The fallacy of formalisation – probably the most common problem ‘strategic planning’ suffers is that it is treated as an ‘event’ rather than a living process. You know you’re suffering from this problem if your ‘strategic plan’ is in a folder, lives on the shelf, and is only referred to once a year when you blow the dust off it and smile ruefully at the fairy stories it contains. Oh, and regarding that ‘fairy story’? The more elaborately conceived it was, the more catastrophically it’s likely to have departed from real events as they unfolded!
2. The fallacy of predetermination - we think that our crystal ball is flawless; we believe we can know the future. This leads us to confine our planning to a single, linear, thought process. However, even a cursory inspection of reality tells you that’s a crazy way to think – there are always elements you cannot plan for, so basing plans on a single line of thought can be disastrous.
3. The fallacy of detachment – when strategy is formulated in a ‘bubble’ (the boardroom rather than the battlefield) it’s likely that there will be a logical disconnect between the planning and the implementation.

That last phrase, “the boardroom rather than the battlefield”, hints at something important if we’re going to get a better understanding of what strategy is, and how to do it well:

You can take strategy out of its military context, but you cannot remove military context from strategy.

The very word itself has its etymological roots in war. ‘Strategos’ is the Greek word for ‘General’. Importantly, this was a battlefield role – in ancient Greece the ‘General’ was not sitting in a white tent on the hill directing the action from afar, he (and it was usually a 'he') was in the thick of the action, reacting and responding to events as they unfolded at the literal cutting edge – the vanguard of the fray.

The word ‘strategy’ as we now know it entered the English Language in 1810 when Napoleon declared himself Emperor of Europe.

The earliest works we recognise as covering what we now call ‘strategy’ are all militaristic. “The Art of War” by Sun Tzu (or the identically named work by Niccolo Machiavelli), The Military Maxims of Napoleon, Carl von Clausewitz “On War”, and “On Strategy” by Helmuth von Moltke the Elder… and many more besides.

(As an aside, the oft quoted “no plan survives first contact with the enemy” is actually a misquote of Moltke the Elder who said “No plan of operations extends with certainty beyond the first encounter with the enemy's main strength”. The misquote is catchier, to be fair).

What is strategy?

My personal definition of strategy is this:

"Strategy is the intersection between intention, intelligence, insight, and implementation".

A catch-all definition would be “a general plan or set of plans intended to achieve a set outcome, especially over a long timeframe”.

This differs from the definition of ‘tactics’ only very slightly, so you have probably seen the two words used interchangeably. The devil is in the detail, here. ‘Tactics’ are specific actions undertaken to achieve a specific result.

‘Tactics’ are, therefore, often employed as part of a strategy, or to help to achieve the strategic intent.

Just to add confusion, sometimes what is ‘strategic’ and what is ‘tactical’ might be a matter of perception.

From the point of view of the business, an individual department’s plan for the year might be seen as ‘tactical’ – it’s a set of actions designed to contribute to the overall business plan…

...However, from the point of view of the head of the department, the departmental plan might be viewed as the department’s ‘strategy’.

Confusing, isn’t it?

The Strike of the Eye

In “On War”, Carl von Clausewitz noted that the key to Napoleon’s consistent and repeated success was a “coup d’oeil”, which literally translates as “a strike of the eye”. This refers to the flash of intuition that leads to instant decision-making which Malcolm Gladwell describes in “Blink”. These are the split-second judgements we make unconsciously, drawing upon years of ingrained experience and awareness of nuanced variables that we cannot articulate consciously.

‘Tactics’ are often (in this context) timely instinctive responses ‘in the moment’ when “he who hesitates is lost”.

This harks back to the point made above that “plans never survive first contact with the enemy”.

The act of planning, of running through multiple scenarios, of understanding all the key variables and the terrain, means that when events inevitably overtake and change your carefully laid plans, you are best placed to intuitively respond, rather than to react hastily and ineffectively.

Response is planned - reaction is knee-jerk. The benefit of planning is not the plan, it is the preparatory nature of the act of planning.

How to achieve high-quality strategic planning for your business

I’ve often referred to the acronym GAFI when teaching basic planning skills:

• Gather information
• Analyse it to derive actionable insights
• Formulate your plan
• Implement the plan

This is valid, and helpful, but misses some key elements for a fuller process.

A strategic planning process is helpful to capture all the key elements. The one below is not the only one – your business probably has its own – but I offer it as an example that captures all the key elements for strategic planning.

• Strategic Intent (this is your Mission, which must be congruent with your Vision and Values – “this is who we are, this is what we believe, this is where we are heading and why”)
• Objectives (“Take that Hill!”)
• Reconnaissance - Gather intelligence (data about your own organisation – value chain analysis, data about the competitive environment in which you exist aka the Task Environment – Porters 5 Forces, and data about the macro environment – PESTLE).
• Analysis for insight (derive insight from the data … what does it all mean? … a good quality SWOT should not be ignored!)
• Formulation (build your plan, make it behaviourally implemented, SMART, apply RACI, apply timelines, build milestones and control mechanisms in)
• Execution (to quote Nike, “Just Do It!”)
• Control (test, learn, course correct)

Let’s look at these elements in a little more detail.

Strategic Intent:

Your mission is your core that guides you. I’m a big fan of the concept of ‘shorter is better’. I often say, “If you cannot fit it on a t-shirt, it’s too long”.

Your mission should speak to your overall vision, and be underpinned by your values, (which also inform the ‘lived behaviours’ of everyone in your organisation, and this is what creates your culture).

Objectives:

You choose objectives based on what milestones are needed to fulfil your mission. They should be clear, concise, achievable, and in some sense, they should be measurable.

Measurable progress gives you indicators of the effectiveness of your strategy – Key Performance Indicators.

Reconnaissance:

I’ve borrowed the word from the military, again.

At one extreme, this is the step that people do too little work on, and they plough ahead blindly. At the other extreme, this is the step that people get bogged down in, becoming trapped in a perpetual cycle of analysis paralysis.

We look at the environment in which our firm functions both the external environments and the internal environment.

Think of three concentric circles:

• In the central circle we have the internal environment. This is your business. Understand it using models like the value chain analysis.

• In the middle circle we have the task environment. This is your competitive environment. Understand it with reference to a model like Porter’s Five Forces (this model, originally published by Michael Porter, describes the key forces that affect your business in the task environment – buyer power, supplier power, intensity of rivalry, threat of substitution of your product or service, and threat of new entrants to the market). You might also run some competitor analysis, identifying where their weaknesses are and how you might exploit them.
• In the outer circle we have the macro-economic environment – typically this environment can affect you and your business, but you can have limited (or zero) effect on it in return. Document this environment using PESTLE – identify relevant Political, Economic, Sociological, Technological, Legal, and Environmental factors).

Analysis:

The recon has brought you information, now you need actionable insight. This comes from analysing and evaluating the information you have gathered.

A good quality SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis may seem ‘old hat’, but if you have done good quality reconnaissance, the SWOT will be rich and informative.

Remember that Strengths and Weaknesses are descriptions of your internal environment, whereas Opportunities and Threats come from the external environments – the task environment and the macro-economic factors.

Strengths and Opportunities are to be maximised and Weaknesses and Threats are to be mitigated or minimised.

Formulation:

We decide the when, where, who, and how of our plan.

Where will we allocate resources? What time will we invest? How will we connect our management decisions with the people who implement the plan?

Conduct good quality brainstorming – take in multiple viewpoints and incorporate scenario analysis (play out different potential eventualities).

Develop a timeline or a Gantt chart with key milestones.

Who is involved? Here the old project management acronym ‘RACI’ is helpful:

• Who is Responsible for the execution of the plan (probably more than one person).
• Who is Accountable for the plan (the one person where the buck stops).
• Who needs to be Consulted? There are bound to be people not directly involved but who will have insightful contributions to make.
• Who needs to be Informed? People are not mushrooms – they do not grow in the dark.

Execution:

Here is where many companies fail in their strategic efforts.

The military has a dictum for officers when directing soldiers: “supervise and refine”.

This means that it is unwise to issue an instruction and then assume it will be carried out as issued. Experience shows us that too many different variables can wreak havoc on our work and on our plans.

We must constantly supervise and refine during the execution of a plan, which leads us to the last step of the process, 'control'.

Control:

Every plan must have management information necessary to govern its execution. The truth is in the numbers. Develop a control mechanism to evaluate if your plan is working with timely accurate information so you can course correct if necessary.

• Are you getting the results you want? If not, why not?
• Is there a process failure (is the process broken, or is someone not following it?)
• Is there a technical failure? (Competency, capability, technology).
• Is there a mindset issue? (Are people misaligned due to poor communication, or are they self-sabotaging due to limiting beliefs?)
• Is there an environmental factor at play? (Circle back to the Reconnaissance and Analysis phase … has something changed? Did you miss something?)

Conclusion:

There you have it – a summary of the key aspects of strategic planning.

One of the benefits of laying something out as a linear process is you can easily identify any gaps in your own systems, or areas where there may be a technical shortfall.

There are lots of great works published on this topic. I would particularly recommend “On Strategy” from HBR’s ‘Must Reads’ series. This includes a seminal article from Michael Porter that, on its own, is worth the price of the book.

#strategy #business #personaldevelopment