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, and 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:
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. With the five items above, very little that you add can greatly improve the plan quality or the effectiveness of execution.
Let’s examine each of these separately:
- Data +
Far too 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.
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.
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.
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 can prevent companies from doing so.
The Achilles heel of the entire strategic planning process, execution must be planned fairly meticulously with 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, or else 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.
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 than 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.
To learn ways to take your strategic planning to the next level please listen to our webinar: Why my strategic planning isn’t working.