marketing-strategy: September 2008

Strategic Planning Resources

The areas of business planning, human resources planning, and strategic planning and performance measurement are outgrowths of the desire of managers, stakeholders and stockholders for direction and accountability. These strategic planning sites bring excellent resources to the strategic planning effort.

Preventing Predictable Decision Making Errors

All in all, our decision-making equipment is pretty sound. We don’t follow the lead lemming over a cliff. We can’t be fooled into thinking that a 99-cent lure is a meal. We don’t try to catch car fenders with our teeth. Then again, it wasn’t a dog who launched New Coke. So there are a few bugs – little design flaws of the mind – that can have big consequences.

People are clinically overoptimistic, for instance, assigning zero probability to events that are merely unlikely (such as a massive iceberg in the path of a really big ship). We see “patterns” in the random movements of stocks the way our ancestors saw bears and hunters in the scatterplot of the night sky. We make choices that justify our past choices and then look for data to support them. Not only do we make these errors; we make them reliably.

That’s the good news. Predictable errors are preventable errors. And a few simple techniques, like those below, can help you steer clear of the most common wrong turns. They can get you to your go point, that decisive moment when the essential information has been gathered, the pros and cons weighed, and the time has come to get off the fence.

How to Implement Strategic Planning: Vision Statement, Mission Statement, Values

In an earlier, popular article, I gave you a strategic planning framework, samples, and examples for creating your organization’s mission statement, vision statement, values, and goals. The most important question I encounter, as a result of the strategic planning article, is: now that I know what all of this should look like, how do I actually make strategic planning happen in my organization?

The strategic planning how-to question strikes at the heart of how to make change of any kind happen in your organization. Start by answering why your organization might want to embark on a strategic planning process. Want to be one of the organizations, in which employees understand the mission and goals? They enjoy a 29 percent greater return than other firms. This seems like a good reason to start strategic planning to me. How about you?

Keys to Strategic Planning Success

These are the keys to effective strategic planning for your business.

Full and active executive support,
Effective communication,
Employee involvement,
Thorough organizational planning and competitive analysis, and
Widespread perceived need for the strategic planning.

If you are implementing your strategic planning in an organizational environment that is already employee-oriented, with a high level of trust, you start the strategic planning process with a huge plus. An additional plus is an organization that already thinks strategically.

Unfortunately, the implementation of strategic planning most frequently occurs as an organization moves from being traditionally reactionary to strategic. So, often, learning to think strategically is part of the strategic planning learning curve.

Full and Active Executive Support for Successful Strategic Planning

Successful strategic planning requires a large commitment from executives and senior managers, whether the strategic planning is occurring in a department or in a complete organization. Executives must lead, support, follow-up, and live the results of the strategic planning process. Or, the strategic planning process will fail. It’s as simple as that.

Without the full commitment of the organization’s senior executives, don’t even start strategic planning. Participants will feel fooled and misled. A vision statement and a mission statement, along with this year’s goals, filed, unimplemented in a cabinet or computer, is a serious source of negatif.

Senior leaders can do the following to create a successful strategic planning process.

Establish a clear vision for the strategic planning process. Paint a picture of where the organization will end up and the anticipated outcomes. Make certain the picture is one of reality and not what people “wish” would occur. Make sure key employees know “why” the organization is changing.

Appoint an executive champion or leader who “owns” the strategic planning process and makes certain other senior managers, as well as other appropriate people in the organization, are involved.

Strategic Planning Pitfalls - to Avoid

I have mixed feelings about what many companies call strategic planning, but creating an overall direction for your company, office, or work group is necessary for success. People need to feel as if they are part of something bigger than themselves. At the same time, they need clear direction to know what "bigger thing" they are part of.

My mixed feelings result from the fact that strategic planning is rarely strategic and most frequently results in pages and pages of plans that sit unused in desk drawers. I have watched a number of clients fail at implementing their supposedly strategic plans over the years. I think many companies fail to implement their strategic plans for these reasons.

In a fast moving, fast changing industry, you can create an overall compass for your direction. You can put together operational plans. You can set goals. But, sales, your industry, your competition, upgraded products – yours and competitors, your ability to fill growth created positions, and more, make strategic planning, in the traditional sense, ineffective.
In a client company I participated in a strategic planning meeting that felt a lot more like the prioritization of to-do lists. But, at least, the to-do lists were yielding clear priorities for the company's success. I met with the participants a week later to find that their senior manager had determined the prioritization of objectives as A, B, or C, was great. However, "all of the stuff" was important and had to get done. Thus, priorities were wiped out and each employee made baby steps on each of the too many objectives. And, when everything is a priority, nothing is really a priority.
When strategic planning sessions are facilitated by consulting companies, the consultants frequently recommend and request 50-60 pages of research about competitors, markets, and current company measurements. While such a systematic approach is to be lauded, companies rarely have all of this data collected nor do they have the ability to utilize it effectively in planning. Thus, they render all of the work hours as meaningless.
Many companies lack the ability to execute strategy. For whatever reason, they make great strategic plans and then, fail to create the specific framework necessary for strategic planning follow-up. Without a follow-up framework and accountability system, action items and follow-up plans and actions that make the execution of the strategic plan a success, don't happen.

Recession Planning for Employees

CEOs interviewed by Price Waterhouse Coopers in their 11th annual survey of CEO economic confidence indicate the lowest since 2003 in North America (35%) and Western Europe (44%). In North America, this figure is down from 53% last year. In the Asia Pacific, Latin America, and Central and Eastern Europe, CEOs indicate much greater confidence in continued economic expansion and business growth. Given the downward spiral of CEOs' confidence in the United States and with all of the talk about a potential and Western Europe, what have you done in your company or department to plan for the possibility that the downturn becomes more severe and impacts your employees?

These are some of the actions I am thinking about in recession planning for employees, for your Human Resources department and other departments within your business, perhaps for your whole company, if recession looms.

Overall Company or Departmental Response to a Pending Recession

Take a look at your strategic plan, your mission statement, vision statement, values, and annual goals. Is your strategic framework sufficiently articulated to help you make it through a serious downturn? Has it been sufficiently communicated to your employees so they are not afraid, they trust their leadership, and they feel they are headed in a shared, positive direction?

Asking them to participate in the conversation is an important commitment to utilizing your employee talent and dedication. Discussing the impact of your strategic framework: mission, vision, values, and goals, on each employees' job is the step that helps them "own" the strategic direction. Without this step - they are just puzzled. Sorry.
Be aware of your company's and your industry challenges. Is your product or service essential no matter what happens in the economy? Does your product save time, save money, or otherwise make itself indispensable even in a down economy? If not immediately determinable, how can you reposition your product or service so that customers begin to see it that way. The customer loyalty and the brand recognition you have built over time will become even more critical in an economic downturn.
Have you done contingency planning to identify your potential risks and the affects of a recession on your business or function? What potential to unfold for your organization? What will you do differently in the various scenarios you consider, and, in the short term, is there any way you can change the potential impact of the various scenarios? As an example, what areas of your Human Resources department need to change or grow to deal with an economic downturn? Staffing? Benefits? Employee morale programs? Retirement planning? Employee training channels?
You need to communicate that your leadership team is doing forward thinking, forward planning, and discussing possible less-than-positive contingencies. Most of your employees don't care what the specific plan is. But, it is critical to their retention and sense of well-being, that a plan exists, that they know a plan exists, and that they understand that someone is really minding the shop. And, in my experience, even the best companies are bad at communicating all of this.

Thinking Strategically First Makes Strategic Planning Work

Strategic planning for organizations is not considered fun. Strategic planning is often done under duress because it is required. Strategic planning is important yet many such plans are found on bookcases, not on the desktops being used.

Done well, a strategic plan provides a useful focus that energizes and moves the organization toward its mission goals, plus it provides a document to recruit others to the mission. In short, a strategic plan is a valuable guide to focus time, talent, and resources in running a successful enterprise.

A Better Way to Accomplish Strategic Planning

How do we plan vacations? We read travel brochures and magazines to imagine fun places to visit. We invest energy in the process in planning a vacation. Where’s the energy in strategic planning? The creative step that envisions possibilities and generates energy is generally missing. To think before planning is a logical one, yet most strategic planning processes devote insufficient think time prior to planning. The desire to get a strategic plan completed quickly relegates thinking to filling in blanks on work sheets.

Instead, when key stakeholders are invited to a creative thinking step, it engages and energizes all participants. This is where new ideas are generated, where innovative possibilities are visualized, and where the stage is set for implementation success. The more stakeholders are involved in the thinking and exploration, the more emotional and intellectual energy they have invested, and the higher the probability that implementation will occur successfully.

Strategic Thinking and Exploration

A strategic plan should not be solely an incremental list of current activities, but have at least a 20% ‘ah ha’ factor of new ideas. Otherwise, a linear, incremental plan will do little more than maintain the status quo, like treading water. With this premise, the pre-strategic planning stages need to include creative and innovative thinking. This stage should be one of exploring possibilities without constraint, a stimulating and enjoyable part of planning. Thus, think new ideas, explore them, and align them with the purpose of the organization.

Think: Questions at this first stage of strategic thinking should be expansive, akin to brainstorming ideas, yet focused around the following: Where is the industry or business heading? What do customers want or need next year and beyond? Using creative thinking methods, the team should consider all manner of ideas, including crazy ones.

Here is one sequence of questions to ask:

What are the trends in the industry or business sector?
Given the trends, what are three new ideas you can add to your best product/services?
Given the trends, what products or services should you change or eliminate?
Given the trends, what new products or services should you consider?

Explore: For each set of ideas, expand them and explore their potential to position your organization at a new plateau of success. During this stage, it is important to avoid discussing the feasibility or cost of an idea. Continue the brainstorming mode. Constraints will be considered in the planning stage.

Here are some questions for exploring ideas:

What criteria should you use to decide a good from a great idea?
If implemented, which ideas will distinguish yours from other businesses?
If you take action on any specific idea, what will be the impact (both positive and negative) for taking action? What if no action is taken? Any impact?

Strategic Planning: The Tactical Segment

Thinking and exploration might be considered the strategic segment while the planning stage is the tactical segment. During the planning stage the realities of funding and resource constraints are brought to bear in selecting the best ideas for the plan. It is here that decision making tools, based on desired criteria, are used to select options for the final strategic plan.

For example, criteria can be:

cost to set up,
time required to complete the new service offering,
fit with current products and services, and
potential for growth and profitability.

In planning, the traditional steps come into play, to include analyzing strengths and weaknesses, opportunities and threats (SWOT), competition, and available resources. These latter aspects further guide the decision making, providing a different set of constraints. Note that many of the opportunities in the SWOT will have been considered in the think and explore stage. Here are some questions for this stage:

Which of the ideas fit your mission immediately, short term, and long term?
What are the time, talent, and resource requirements for the ideas?
Which of the ideas have the highest return-on-investment once implemented?
What does one have to do to implement the plan, as it pertains to people, skills, technology, and funds?

Final Useful Thoughts About Strategic Planning and Strategic Plans

Consider three interlocking rings of who you are (strengths and weaknesses), what the customer wants (opportunities and threats), and what you stand for (purpose and mission). The central intersection created by these three rings will reveal the unique opportunities that only your circumstance can offer. This distinctive intersection might be called your fit, where no other organization has the same conditions.

Don’t lose this potential to differentiate from the competition. In reality, strategic planning is a means to find your unique fit. If you consider a strategic plan merely a working guide, and not a formal document for presentation requiring perfected details, then there is a higher probability for successful implementation.

Avoiding Circular Conversations

We’ve been talking about making Human Resources strategic for decades, but organizational readiness, resistance to change, and complicated and expensive technology issues continue to get in the way.

When you are at a conference, there are moments when you truly relate to a speaker. You understand exactly what the person is saying, almost as if they were using your organization as a model. The topic may be strategic human resources, general business strategy, the impact that technology can have in the workplace, or how efficiencies can drive more money to the bottom line. You, as a sitting HR professional, have a larger challenge in front of you following the conference; choosing your moment to bring these strategic human resources thoughts forward in your company.

I know how you feel. You’ve been through this more than once. You start a conversation with the "C" people (COO / CEO / CFO) upon returning from a conference, or you’ve been asked to "clarify" your request for a budget increase to cover HR expenses. What you get is the chance to focus on the two big Rs: Recruitment and Retention. If you’re lucky, you may even get to talk about, dare I say it? Succession Planning.

Then as you walk back into your office, reality smacks you in the face as if you had forgotten to open the door when you turned the corner. You realize you were given lip service - again. The reality is - nothing has changed. Bummer