Strategic planning is a crucial process, yet it often encounters hurdles that can derail its effectiveness. Let's delve into the three common stumbling blocks that can obstruct the path to successful strategic planning and how to navigate around them.
Summary
Strategic planning has been branded a “big lie.”
- What really unfolds for an organization is not the same as what was articulated in the strategic plan to begin with.
- Another criticism is that what takes place in “strategic” planning isn’t strategy at all – it’s business-as-usual.
Your Strategic Planning Future
Strategic planning is a way of shaping how to negotiate a changing future
- It’s not a set-and-execute document
- Developing it involves a responsive process of continual anticipation
- A strategic plan will be “wrong”
- Go ahead and make one anyway
Unrealistic expectations
Expecting a fixed plan, the perfect program that you follow step-by-step to achieve an outcome is unrealistic
- You should be looking for something that hits you in the face and says, ‘This is what you have to do to get to where you want to be.'”
Budget Override
The budget overrides what there is of strategic thinking and, in turn, limits strategic planning.
- Don’t let budget override your strategic thinking, it limits your ability to think outside the parameters of your business plan and gives you leeway to make strategic decisions.
How to fix it: Change your strategy mindset
You need to not only accept volatility but also recognize your inability to come up with the perfect plan
- Hannah is the CEO of a major egg producer in Australia
- Her expectations of strategic planning leaned towards it guaranteeing a clear and certain future
- A fixed mindset believes that some capabilities, such as talent or intelligence, are given and unchangeable. A growth mindset holds that individual abilities are elastic and can improve over time
How to fix it: Loosen the coupling between budget and plan
Budgeting takes place within the context set by the strategic plan.
- The point at which the budget is set is the same point of when executive and shareholder expectations are put in place
- In a flexible planning environment, so does strategic planning
- You can kill two birds with one stone: with a strategic plan, you can improve what the business is doing now to get those budgeted results
- Strategic planning process helps your business explore fresh opportunities outside the activity enshrined in the budget
Wrong model
Julie is a senior executive in an investment bank.
- She and her executive team would meet annually to undertake a strategic review and develop a strategic plan, but the results were usually disappointing
- The model she and her team had embedded subconsciously was of a different type of “plan”
- A building plan
How to fix it: Shift your planning model
Don’t get stymied by overemphasizing “planning” in your company’s strategy development
- Instead, view strategic planning as a series of rounds punctuated by numerous encounters
- Strategic planning is a way of making sense of an uncertain future
- While it does not mean no plan at all, an often-changing plan produces preparedness
