By Ron Price, HR.com, October 2016
Very few organizations large or small understand what it takes to create an effective strategic plan. Terminology is confusing, plan documents gather dust, and planning processes get bogged down without effective implementation. Too often, the result of strategic planning is detachment between the plan and day-to-day realities.
Many companies know they should, but simply don’t have a strategic plan. But like any other meaningful business initiative, strategic planning can make a huge difference in employee engagement and overall effectiveness.
First, it’s important to differentiate between strategy and tactics. Strategy is direction. It usually includes one or more “big picture” destinations desired by leadership. Tactics are the day-to-day operational tasks to achieve the big picture objectives. Strategy and tactics are often used synonymously, which represents one of the major problems in planning. Managers cannot think strategically and tactically at the same time. Every time that a strategic planning session dissolves into discussion of tactical issues, the strategic discussion is lost.
Effective strategic planning is a process that should be broken down into three separate, equally important components: strategic thinking, long-range planning, and operational planning.
This first component addresses the big picture questions of an organization, including:
Who are we?
Why are we in business?
What business are we in?
What business should we be in?
Who are our customers?
Who should our customers be?
What impact will external factors have on our business?
This thinking includes reflective analysis about an organization’s mission, vision, values, and 10-20 year objectives. It includes a broad look at what makes an organization unique, including internal strengths and limitations, as well as external opportunities and threats. The focus here is on intuitively feeling the organization’s future at a deeper, contemplative level.
This component focuses on studying the strategic issues of the organization using facts, figures, and research. It includes an in-depth understanding and analysis of the marketplace, competition, and metrics surrounding the organization’s strengths, limitations, opportunities and threats. This step uses data to validate the conclusions reached during the initial intuitive thinking phase. Long range planning results in 5-7 major strategic objectives that will become the focus for the next several years.
Just as it is critical for the strategic thinking phase to be intuitive, it is critical for the long range planning phase to be analytical, rich in facts and figures, and detailed. Without both intuitive and analytical thinking, planning is incomplete and the results will show it.
The final phase of strategic planning is creating an operational plan with 12-18 monthly goals. These goals include specific action plans, timelines, assignments, and systems of accountability. The goals are the result of completing the ideological analyses in first two planning phases, gaining total commitment from management. You have probably heard of SMART goals, or Specific, Measurable, Achievable, Relevant, and Timely. The goals in your operational plan should be SMART, incorporating schedules to review and adjust the plan and measure its success. Once again, this is rarely connected effectively to strategic planning.
Most organizational leaders excel in only one of these three phases of strategic planning. As a result, there is a disconnect and loss of focus between the creation and execution of a plan. How do we change this pattern?
In order to properly implement the three phases of planning, you may want to consider some of these tactics:
It all starts at the top. The impact of the strategic planning process on an organization depends on the commitment from top management. While it’s appropriate for the CEO to assemble a team to create a plan, executing the strategy is ultimately the responsibility of the company’s top executive.
Hire a professional facilitator to guide the strategic planning process. This means more than just hiring someone to start a discussion at a resort one weekend. Bring in a consultant as a partner and “strategic conscience.” Since a facilitator does not carry day-to-day responsibilities, they are uniquely positioned to remind the organization of what matters most.
Set aside at least four review meetings a year, ranging from 1-3 days. Ideally, the meeting will review your strategic thinking during the first session, then work on long range planning, and finish with operational planning. It is critical to develop focus without squeezing strategic planning into a pre-determined time frame that exhausts everyone. Companies may also need monthly or bi-monthly meetings to keep the process moving.
In one way or another, engage everyone in the organization in creating and implementing the plan. Confidentiality is usually over-emphasized. While I don’t advocate distributing the strategic plan for the whole world to see, most organizations don’t use the plan to transform and direct an entire organization. The result is unrealized potential, limited commitment, and ineffective execution.
Keep improving the strategic planning process. Periodically, take a step back and review the purpose of strategic planning. Double-check that the plan is creating clarity about why the organization exists, what it stands for, how it brings unique value to the marketplace, its direction for upcoming years, competitors, and ideal customers.
Every organization has an almost infinite reservoir of possibilities in its people, markets, and infrastructure. Effective strategic planning defines this potential based on what makes the organization unique, in combination with the realities of the marketplace
A realistic, focused, well-executed strategic plan is still the most dynamic path to success. The chances are pretty good that your competitors still haven’t learned how to do it right! So, what are you waiting for?