By Dana Baldwin
Why do we look at different ways to shoot ourselves in the foot? In other words, why do we look into what might be unintended consequences of well-intentioned actions as a part of strategic planning?
While the answer might be obvious to some, let’s explore the reasons behind doing this exercise to be sure we give it the appropriate rigor when we do it.
First, what should we be examining to see if there could be some proposed action which might lead to a major problem if care is not taken to avoid the potential peril. The positioning of this exercise within the planning process should give us an indication of what should be analyzed by the team to avoid doing something which could do harm to the organization if we end up with an unintended consequence rather than the intended result.
This exercise is positioned immediately following the very important Strategic Issues discussions. These discussions lead to decisions about those issues which will likely have a major impact on the future course and direction of the organization. Our Strategic Issues discussion is the first time in the strategic planning process that we make hard and fast decisions about taking future actions.
One good reason to look at each intended action, then, is to seek to determine whether, in the process of carrying out the steps necessary to implement the action, something could happen to cause us to miss the target and potentially do harm to the organization. By looking at each potential action item as discussed and decided in our strategic issues discussion, the team should ask, “What could go wrong?”
There can be a tendency to minimize this analysis because the mindset of the team is enthusiastically focused on implementing actions which further the company’s results, not harm them. But, by taking a truly objective look at each potential action, you may avoid a significant negative impact on the company in the future.
A prime example of the risk of skipping the “shoot yourself in the foot” step (I’m reaching back quite a while so as not to impute this to any known company) was when a company decided to off-shore source a key component of their main product to reduce cost. They sent the only tooling to Yugoslavia just before Yugoslavia had its civil war. The UN put a total embargo on all imports and exports, except for food, medicine and clothing, so the company could get neither their product nor their tooling out of the country.
This great idea resulted in a major downside hit for multiple reasons:
(1) The cost to replace the tooling was significant.
(2) The delay in getting the key parts back in stock so they could build and ship was lengthy.
(3) Because they had planned on a sizeable savings in the cost of the part, they had lowered the price to gain volume and market share, so they lost quite a bit of money until they could raise the price to cover the higher cost of the key component.
They failed to look at the whole picture when they decided to go offshore. This included looking to see if the political situation of Yugoslavia was stable. Had they done this, they would have discovered that the country was actually coming apart due to the ethnic conflicts that were arising. They paid a hefty price for their short-cutting the process! Let’s borrow from their experience and avoid making similar mistakes.
If you are going to do a complete job of your strategic planning, this is one component which, while it may appear to be trivial compared to others in the process, can have a big effect on the future stability of your organization. If you need help with this, or any other part of your strategic planning, please contact me at firstname.lastname@example.org or 616-575-3193.
Does your company look into what might be unintended consequences of well-intentioned actions as a part of your strategic planning? Attend the Simplified Strategic Planning Seminar for more instruction on the “shooting yourself in the foot” exercise as well as all other aspects of Simplified Strategic Planning.
M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at: email@example.com
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