Over the last 20 years or so, we have facilitated many strategic planning sessions with clients in a variety of sectors including pharma, med-tech, transportation, telecom, hospitality, services, and even not-for-profits. Regardless of industry, we’ve found that five things separate successful plans from those that keep coming back each year unfulfilled. Kaplan and Beinhocker confirmed in their study of the value of strategic planning that, “When approached with the right goal in mind, formal planning need not be a waste of time and can, in fact, be a real source of competitive advantage”.
Let’s Get Down to Brass Tacks
“Look, we have lots of goals to fulfill, and not much time to do it…let’s get to what needs to be done as quickly as possible.”
There’s nothing wrong with wanting to get things done, but you’ve got to make sure that they’re the right things. As Peter F. Drucker wrote, “Management is doing things right; Leadership is doing the right things.” Strategic Planning is a core Leadership activity. Manfred Kets de Vries identified The Strategist as the primary of eight archetypes of successful organizational leadership.
Strategic plans should be developed with great care, deliberation, and a thorough understanding of your company and where you want to go as an organization. This often leads to the next big challenge.
“We don’t have time for the soft stuff.”
Eyes begin to roll when we mention Vision, Mission and Values (VMV) in a strategic planning presentation. Many believe that these represent the “feel good” elements of an organization – posted on a wall somewhere to imbue a sense of purpose and pride, yet often not “lived”, especially when it comes down to financial decisions.
Many organizations often have widely disseminated explicit VMV statements and at the same time, implicit ones based on what employees actually observe on a daily basis. The latter are often quite divergent from what’s on that wall. As one participant said in pre-planning interviews, “The Vision is in Business Class and the Values are in Economy.”
Failure to elaborate and integrate the real Vision, Mission, and Values in a strategic plan is a great way to make sure that plan is going to fall apart at some point in its execution. That’s because Vision, Mission, and Values are core plan anchors that constantly tell you where you are regardless of which direction the wind is blowing. Two critical questions that must be asked throughout planning and execution are: “Does this activity bring us closer or take us further away from our Vision and Mission?” and, “How consistent is this activity with our Values?”
For example, one major med-tech client had an opportunity to exclusively in-license a potentially very lucrative new robotic surgical technology. The discussion around how this new product would fit with the company’s Mission led to the conclusion that it was a poor fit with current competencies and would divert major resources away from other key projects. In the end the opportunity was spun off and rationalized as a separate business venture.
Why do we call a plan “strategic”? It’s because a strategic plan is one created in relation to internal and external factors such as the competitive, regulatory, and customer contexts, as well as where the company wants to go (Vision), how it plans to get there (Mission), and the beliefs that hold everything together (Values). As Michael Kaiser writes, “[Strategic Planning] demands a thorough investigation of the [whole] environment in which the organization operates.”
Too Much of a Good Thing
“There’s so much to do.”
Every strategic planning process will eventually wind up at the Key Issues point. This stage comes right after the SWOT analysis and represents the “art” of strategic planning. It’s the point at which we ask, “What does all this mean”? A SWOT is just a snapshot…the Key Issues are the result of all the elements in the SWOT interacting in real-time to create the current state of your business.
It’s virtually impossible to deal effectively with more than 2-3 Key Issues in any planning cycle, regardless of the size of the business. If you’ve identified, weighed, and chosen those issues wisely, they will inevitably lead to an extensive set of objectives, strategies, and tactics that will fully challenge your organization.
The temptation to attempt to deal with more than 2-3 issues is very strong, especially in organizations that are underperforming and under pressure to do a lot better quickly. We hear it time and again from new clients: “I can’t believe we’re facing the same issues as last time and have made so little progress”.
The Hubris of Certainty
“We know our customers well and have spent years cultivating great relationships with them. We have a pretty good idea of what creates value for them and what drives their decisions”.
This is perhaps the greatest delusion of them all, and yet the hardest to break, especially for people who really do have great relationships with their customers. Here’s the rub: The better your relationship with customers, the less likely they are to tell you the whole story about how they make decisions and how they view your company’s and competitors’ value propositions. It sounds pretty counterintuitive. Here’s why:
Especially in B2B relationships, customers (even if they’re not yours) have a vested interest to protect relationships with all vendors because it expands the competitive landscape and ensures a steady flow of competitive initiatives around innovation, price, value adds, etc. The head of a group purchasing organization once admitted that they didn’t disclose why a given vendor won a tender because, “It keeps everyone on their toes and competing even harder the next time. We always tell them it was the price.”
Add to this that most people inherently don’t like to hurt others’ feelings, nor do they like to burn their bridges…you never know who you’re going to need at some future point. The result is that there’s always a critical layer of information that’s nearly impossible to access in any effort to understand the truth about how people make decisions.
More than twenty years of Psychmentation research over hundreds of global projects has confirmed that the vast majority of companies only operate with a very limited view of how their customers make decisions. If you’re lucky, your competitors may have just as much trouble accessing that layer of information as you do…but don’t count on it!
Assuming what creates customer value and how customers are making decisions about vendors is the precursor to a failed plan. Extensive, varied, and ongoing research on what creates real customer value in the competitive landscape is essential to success.
Going it Alone
“A physician who treats himself has a fool for a patient” – Sir William Osler
Many companies choose to lead their own strategic planning process, with either a senior executive or a delegate as the session chairperson. Save some time, effort, and aggravation…just ask the boss to develop the plan and go with it. Strategic planning is all about an honest and open discussion of what’s happening and what needs to happen in the company. Human beings are notoriously vulnerable to group dynamics and power structure. It’s the same reason that market research focus groups are ineffective at answering sensitive questions. Balancing power and ensuring an equal share-of-voice for everyone is critical to the development of a plan with enough buy-in to make sure it gets done.
By Steve Courmanopoulos, Ph.D.
Dr. Courmanopoulos is the Senior Partner and CEO of Medius Consulting Group, a global consulting firm providing expertise in three areas: Intelligence, Strategy, and Organizational Development. Click here for more information on the firm’s activities in Strategic Planning.
 Kaplan, S and Beinhocker, D. (2003). The Real Value of Strategic Planning. MIT Sloan Management Review. Retrieved January 18, 2016 from: http://sloanreview.mit.edu/article/the-real-value-of-strategic-planning/
 Drucker, Peter, F. (2003). The essential Drucker. New York: ReganBooks
 De Vries, Manfred, F. R. (2013). The eight archetypes of leadership. Harvard Business Review. Retrieved January 18, 2016 from: https://hbr.org/2013/12/the-eight-archetypes-of-leadership?cm_sp=Topics-_-Links-_-Read%20These%20First
 Kaiser, Michael (2014). What makes a plan strategic? Huffington Post. Retrieved January 18, 2016 from: http://www.huffingtonpost.com/michael-kaiser/what-makes-a-plan-strateg_b_5521337.html