Written by Robert Bradford
WHAT I LEARNED REVIEWING THE RESULTS OF 100’S OF SUCCESSFUL COMPANIES
Strategic planning has been done many different ways. Some work, and others don’t. I’ve heard people talk about planning processes that are deeply detailed and months long, and I’ve heard of planning processes that are done in a couple of hours with post-it notes and tinker toys.
My own take on strategic planning is based on experience drawn from working with hundreds of companies over the years. I’ve paid particular attention to three outcomes from strategic planning:
- What was the effect on the PROFITS of the company?
- What was the effect on the SALES of the company?
- How much of what was committed was EXECUTED?
Based on the experiences of those who fared best in these three areas, here are a few key things you NEED in your strategic planning:
- Data
- Assumptions
- Direction
- Commitment
- Execution
You can do anything you want, but without the five items above, you will end up with either a bad plan or a bad outcome. If you have the five items above, there is very little that you add can that will greatly improve the plan quality or the effectiveness of execution.
Let’s examine each of these separately:
1. Data.
Often, I’ve seen companies try to strategize based upon opinions, feelings and presumptions. There is simply no substitute for data. But strategically useful data is hard to find (and often expensive). Anything you can do to improve your repository of strategically useful data is likely to pay back in your planning process.
Tip: keep a file folder for strategic data on each of your market segments and competitors, and update it with articles and information as you see it in your daily work.
2. Assumptions
While we desperately attempt to avoid assumptions in our daily lives, temporary estimates about the future are completely inevitable in strategic planning. The key to making assumptions and using them well is to do so consciously, and remember that they are subject to revision in the future.
Tip: keep your assumptions separate from facts. If you make predictions, do not treat those numbers as factual, but rather as temporary estimates, which are subject to change.
3. Direction
Direction is the heart of strategy – in my definition, strategic planning is the planning of a direction that will focus the organization’s resources to the best possible effect. Almost no one skips this.
Tip: the most overused strategies are the “growth” strategies. Many companies can only be successful in growing once they give up growth in some other area. Putting all of your resources to work in a single market segment really helps. It will enable you to blow past your competitors who are spreading themselves thin trying to cover every market. Use your strategic planning to pick where to grow – and where NOT to grow.
4. Commitment
There are two downsides to commitment. One is that commitment creates accountability – which is only a downside when you want to avoid it. The second is that commitments that aren’t backed up with resources and execution damage the credibility of the plan and the management team. The simple solution to this problem is to fix it with good, resource-based execution planning, but the tedium of that process often can prevents companies from doing so.
Tip: Write specific, measurable objectives from your strategic planning, and limit yourself to 10 or less. If you finish the first ten, you can always add more later. If you tackle too many, you will likely end up postponing or ignoring execution due to resource constraints.
5. Execution
The Achilles heel of the entire strategic planning process, execution must be planned fairly meticulously. In addition, you’ll need ample resources allocated to the expected efforts. Any execution which is going to be strategically useful will require a significant amount of time and/or money. Without this investment, its strategic utility will be short-lived. Because many strategists shy away from anything that some might call micro-management, I often observe poor execution planning in companies that are doing strategic planning without professional help.
Key tip:
Write an action plan for each strategic objective and estimate both cost and time requirements for each step. After this, keep the action plans visible to everyone and revisit them to check on completion and progress at least once a month during the year. I could add “monitoring progress” as a sixth step here – but in reality, it is a critical part of the execution.
How does your planning look?
I’d strongly recommend you take a look at your current strategic planning process. Are all five of these areas covered? If so – congratulations, you’re much more likely to get good results from your planning that most companies. If your strategic management is missing any of these items, you might want to take a closer look at Simplified Strategic Planning, a battle-tested methodology that assures you will cover the critical pieces with an appropriate investment of time.
If you’d like to see the Simplfied Strategic Planning Seminar on video, we are offering a series of 34 videos covering the entire content of the course, along with free access to the Simplifies Strategic Planning templates that you can use in your own organization.
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