Invent Your Future with Strategic Planning
by Abhay Padgaonkar

"The only thing we know about the future is that it will be different."
- Peter S. Drucker

"Would you tell me please, which way I ought to go from here?"
"That depends a great deal on where you want to get to," Said the Cat.
"I don't much care where-" Said Alice.
"Then it doesn't matter which way you go," said the Cat.
"-so long as I get somewhere," Alice added as an explanation.
"Oh, you're sure to do that," said the Cat, "if you only walk long enough."

(Alice's Adventures in Wonderland by Lewis Carroll)

If the purpose for an organization to get somewhere then only walking long enough is the answer. But if you care a great deal on where you want to go, the direction you choose is vitally important. A strategy is simply choosing that direction and figuring out a way to get there. As the old adage says, "If you don't know where you are going, any road will get you there!"

The good old days of producing a 5-year strategic plan in a 3-ring binder are passť. Bursting at the seams, these plans were created by the corporate planning staff who many times missed the forest for the trees. The plans were created in a vacuum and were not grounded in reality. They mostly focused on repositioning the organization in the existing environment. They were long because people didn't put the effort into honing them down to a few carefully-chosen, clearly-focused statements. Mark Twain, who once said, "I would have written a shorter letter, but I didn't have the time," surely would have agreed. And most importantly, they gathered dust as book-ends on the shelf because they were not constructed by people who needed to own them and implement them.

It's not only large corporations that generate plans worthy of propping open a heavy door. Even those at small companies are apt to ramble on aimlessly about their future direction. Sometimes they rely on platitudes and motherhood-and-apple-pie statements, which only serve to further obscure the true purpose of the plan. Because the whole process to understand and make sense out of internal and external realities can be so daunting, some simply avoid strategic planning like the plague. Instead they choose to live day-to-day, and confuse the urgent with the important.

Excuses, Excuses, Excuses

Why do organizations develop plans that are too long, boring, and irrelevant? Or avoid the process entirely? In many cases it's because they are beset with internal problems such as:

  1. Inertia: Because of the organization's risk averseness, maintaining status quo is rewarded and occasional failure inherent with any innovation is severely punished. People soon figure out that if they walk backwards they are unlikely to stub their toes; therefore they focus on maintaining the status quo rather than imagining the future.

  2. If It Ain't Broke: It is easier and safer to justify resources to fix something that is clearly broken than it is to actually break new ground. But without risk there is little opportunity for greatness.

  3. Confusion: While there is much to gain from looking at an old problem with a new perspective, it's dangerous to think that "restructuring" and "reengineering" can be the strategy. Unfortunately, reengineering has become a euphemism for cutting jobs to please Wall Street.

  4. Detachment: The higher people rise in the organization, the more it seems that they become removed from reality. Surrounded by sycophants sitting atop the ivory tower and listening to filtered messages can cloud the true understanding of the employee or customer sentiment and lead to an overly internal focus.

  5. Ego: Top leadership is installed with the assumption that they know how to lead the organization. As a result, there is a pervasive spirit of ego and pride preventing top management from admitting that they are anything less than fully in control.

  6. Lack of Leadership: Leadership is mainly about aligning people, motivating them, and creating a culture of leadership. Inability to build a collective view of the future throughout the organization leads to strategies that look good on paper but are rarely executed.

The first task for leaders is to ask if their organizations are afflicted with one or more of these maladies. In re-making IBM, Lou Gerstner described "changing the culture-the mindset and instincts of people" as the hardest part. He goes on to describe that "this kind of wrenching cultural change doesn't happen by executive fiat."

Strategy a Panacea?

Gerstner's words of wisdom explain why a cerebral exercise like strategy formulation is only as good as a half-baked pie. He goes on to say this: "Execution--getting the task done, making it happen-is the most unappreciated skill of a business leader. In many years as a consultant, I participated in the development of many strategies for many companies. I will let you in on a dirty little secret of consulting: It is extremely difficult to develop a unique strategy for a company."

There is an old Chinese saying: "To know and not do is not to know." Yet, strategy formulation as performed by major consulting firms has reached an exalted status and a huge price tag. In their latest book, Hard Facts, Dangerous Half-Truths, and Total Nonsense, Jeffrey Pfeffer and Robert I. Sutton make a similar case that strategy may not be that important after all. They contend that "having a clear strategy is essential for producing focus and facilitating communication and coordinated action inside companies. Yet there is good reason to be skeptical that merely making right strategic choices is the key to business success."

Strategy within an industry or a company is hardly unique or a secret. It is widely known and discussed in speeches, annual reports, and investment analyses. Yet there is tendency among many executives, aided and abetted by the so-called strategic consulting outfits, to believe that if only a company could buy that winning Powerball ticket, they could live happily ever after. So companies invest a great deal of time, money, and energy in figuring out that perfect strategy while leaving the less glamorous work of strategy implementation to the minions. The fact that strategy is highly overrated, however, is not lost on all executives. As the former Southwest CEO Herb Kelleher put it," We don't do strategic planning. It's a waste of time."

A strategy has to be grounded in reality, customer-focused, simple to understand and communicate, and flexible. And most importantly its implementation must be an integral part of the overall strategic plan. So how does a leader make sure that the brain of the organization is not disconnected from its heart, hands, and feet?

The One-Page Plan of Action

When it comes to strategic planning, organizations have to think clearly, focus sharply, and communicate eloquently. The first step is to create a succinct, adaptive, and thoughtful strategic plan that, regardless of the size of the organization, fits on one page. (For examples, see One Page Business Plan by Jim Horan.) Hogwash, you say? Not really. With enough discipline, one can easily capture in one page the five essential elements:

  1. Vision: What business are you building? What do you aspire to be? A vision statement describes how the leadership visualizes the business. It should stimulate thinking and communicate passion. A good vision statement should inspire others to reach higher and unlock their passion.

  2. Mission: What is the raison d'etre-the reason for your business to exist-as viewed from the external customer perspective? It should be short and memorable-almost like a tagline. Building on its absolutely, positive overnight success, FedEx has unveiled a new tagline "Relax, It's FedEx" campaign, the main message of which is that the portfolio of FedEx services will help small businesses meet their needs.

  3. Strategies: What will make your business successful over time? What are the methods to your madness? Can you easily explain them to the frontline employees? While neither secret nor unique, strategies capitalize on internal and external opportunities. The best companies build working processes around these opportunities that allow them to outperform competition.

  4. Objectives: Can you quantify what you are trying to accomplish? Where will you look to see that meaningful progress is being made? The objectives need to cause meaningful actions within the organization toward strategies you have laid out. An organization should be able to measure progress because after all what gets measured and inspected get done.

  5. Plans: What specific actions will you take to translate strategies into stated objectives? They need to be SMART (Specific, Measurable, Achievable, Relevant, and Timely). This is where the rubber meets the road. This is where the talk of creating a high-performance culture becomes a reality. Only through well executed plans can the required change be brought about.

A one-page action plan is a credo that you build, internalize, and live by. More than just a manifesto, it becomes the guiding light for day-to-day execution. Strategy formulation and strategy implementation are joined at the hip. A simple but effective one-page action plan allows organizations to make the complex simple - the job of strategy formulation - and make the simple work - the job of strategy implementation. As Andy Grove of Intel put it: "Strategy is important. Figuring out what to do is important. Doing them and doing them well is equally important."


A management consultant, author, and speaker, Abhay Padgaonkar is the founder and president of Innovative Solutions Consulting, LLC (www.innovativesolutions.org), which provides strategic advice to major clients such as American Express.

Many more articles in Strategic Planning in The CEO Refresher Archives

   


Copyright 2006 by Abhay Padgaonkar. All rights reserved.

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