The truth about strategic planning

Strategy is about making choices that matter for long-term organizational survival and success: choosing where and how organizations compete effectively in markets and communities; choosing who to lead the organization and when that leadership merits replacement; choosing how to govern the organization and assuring that stakeholders contributing to the organization get a fair return.

Strategic planning is about managing the choice process: including the right organizational leaders; creating a friendly and inclusive environment for them to meet; running processes promoting frank discussion about the organization, its internal strengths and weaknesses, its external opportunities and threats; developing an achievable vision for the organization; setting measurable goals to realize that vision; integrating those goals with the organization’s daily operations. First and foremost, a realistic strategic plan answers three main questions: Where to play? How to win? How to measure success?

After decades working on these issues, I have learned that effective strategies emerge from well-managed strategic planning, which is a mix of science and craft, processes and people, quantitative expectations and qualitative aspirations, a step-by-step action plan and a heuristic guide, permitting flexibility of movement in an uncertain world. I learned this about strategic planning as an outside consultant to leaders at large established organizations and start-ups. I learned this as an inside executive leading the strategic planning process and motivating a support staff in the process. 

 How do you conduct strategic planning?

The short answer to that question is this: It depends...

I consult on both strategy and strategic planning and have done so for decades. I have learned both the art and science of strategic planning during my graduate studies in industrial organization economics and business. Since then, I personally drove strategy design and strategic planning numerous times in three different settings: as a strategy consultant, as a startup CEO and as a corporate strategy executive.

My experience as a strategy consultant was exhilarating. We were typically working for the CEO or the head of a business unit of a large organization. Our mandate was to analyze, design and recommend the best strategy possible for their organization as measured by sales, profit and/or impact. This was a problem solving exercise, using a rigorous fact-based analysis and best-in-class solution design. The result was always elegant, ambitious and inspiring. It was usually a view of a transformed organization within 3 to 5 years. I have seen or worked with several analytical frameworks such as OKR, Balanced Scorecard, OGSM, Blue Ocean, Ansoff Matrix, or the 7S model and their variants just to name a few. But the result was not necessarily rooted in the reality and complexities of the client’s organization. In fact, we were often time also hired to help implement the solutions crafted by other premier consulting organizations, as there was not enough internal stakeholder buy-in or internal capabilities built in to actually benefit from the recommendations..

As a startup CEO, the strategic plan materialized itself as a very different animal. I had developed a business plan when launching the company, but I was too busy with everyday fires to update it and to document pivots and changes in direction. I had a simple PowerPoint presentation that was mostly geared at potential investors and other stakeholders. But most of the latest decisions and tradeoffs were in my head. I was very busy developing products and services to grow revenues, and I never really shared that strategy document with my team because it was never really in shape to do so. I found some comfort in templates like the one-page business plan and the one-page business canvas to summarize and convey strategic information. There was always a temptation to try something new, go in another direction or add new things to an already too long TO DO list. It was always difficult to find the right cadence for re-assessing and updating the strategy plan without adding too many initiatives leading to a loss of focus. And a loss of focus often times means reduced success.

Lastly, as a corporate strategy executive, my experience with strategic planning was yet entirely different. The strategic plan there was a combination of documents. There was an operational plan, a budget and a visual representation of the strategic vision. The operational plan with over 80 pages was too long to read for anyone. It was a detailed description of business as usual, mostly projects that were successful. As a result, the board had a hard time understanding what the priorities were and what tradeoffs or decisions had been made, let alone mistakes and lessons learned. The one-page visual representation was mostly aspirational, highlighting capabilities that the organization sought to develop but with no defined tactics to do so in the operational plan or line items in the budget to build up these capabilities. Employees had a hard time understanding the strategic priorities from that one-pager, and especially how it translated into their everyday work or even if/how it connected to their performance evaluation and career development goals. There was too much left to personal interpretation. So the main strategy document was actually the budget – a bottom up approach, listing current initiatives and potential new projects needing funding. Budgets are short term views focused on the next year, with little - if any visibility - beyond that next year. Budget appeared to me also as reflective of turf battles, fiefdoms and the defense of business as usual. This was a far cry from a real strategic plan with hard decisions, tradeoffs, and focus.

I am sure you understand by now that none of these experiences are exceptional and that you probably recognized your own experience in one or several of these descriptions.

So what is the truth about strategic planning?

The truth about strategic planning is that it does not need to be long, convoluted or expensive.

I now use an approach that borrows the positive aspects from my three experiences and leaves aside their drawbacks. This approach is light both in terms of time and dollars needed to get results. A good outcome can typically be achieved in less than three month. It is usually undertaken by one consultant. The role of the consultant is to facilitate the process, engage with all stakeholders and to gently challenge the executive team to think creatively, innovate, prioritize and focus. This way, the whole executive team has its fingerprints on the results to ensure alignment and buy-in. The mindset here is “We win as a team or we fail as a team”.

Below are some of the main highlights of our approach:

Process

• The overall process is articulated around 2-4 working sessions with the executive team and the board, along with some homework and coaching in between the sessions. As a facilitator, we accompany and support the CEO and the executive team through the entire process.
• First, the executive team needs to agree / align on the organization’s goals and get it approved / refined with the board. Sometimes it helps to conduct market research, competitive intelligence, consumer needs analysis and/or operational assessment to help devise key goals and devise priorities.
• Then, the executive team  builds up the strategic plan, aligning on the strategic prongs and their related initiatives. The challenge here is to ensure that the strategic plan has the appropriate level of focus without too many initiatives and tactics..
• Finally, the executive team puts in place a simple mechanisms to track results and to make decisions as the plan is implemented and results are recorded.

Deliverable

• A short document (one or two pages maximum) ensures that only the most important initiatives are presented. It really helps with focus. Strategies and initiatives need to be rooted in the idiosyncrasies of a given organization, so that they will actually be implemented successfully. It is better to achieve only 70-80% of a realistic plan than 10% of the perfect plan
• The document should be written in plain and simple English, so that any reader (board member, executive team, employees) can understand it and it leaves no room for personal interpretation
• Each strategic prong and each initiative within that prong have a defined owner who is accountable for designing, implementing and reporting the work in a specific timeline

Results

• Success is clearly defined upfront with clear goals and measurable metrics
• Budget / resources are assigned to the strategic prongs and initiatives in order to ensure success and alignment.
• Metrics measuring success (either progress and/or outcomes) are defined to measure each strategic prong and initiative and are tracked on a quarterly basis. There is a discipline attached to tracking that information. Decisions are made quarterly based on these metrics.

There are special situations where additional work is required in preparation or during the planning, such as contingency planning. These situations include merger & acquisition, major industry disruption from new technologies or new business models or exceptional conditions like the covid-19 pandemic.

In any case, I would be happy to answer any question you might have about strategic planning as the CEO of an organization. This might not be the right time or the right format for you, but I am happy to serve as a sounding board nonetheless.  I look forward to reading your comments and input.

 Laurent Guinand, Ph.D. is the founder & CEO of Aramis Advisors, LLC.

He can be reached at [email protected].