Strategic Planning and other Delusions


What Good General Managers Do series

Strategy vs. Numbers

Most strategic planning exercises are doomed from the start by being connected to the annual budget process.

The money always wins.

Strategy is creative. Financial Planning is operational. Strategic and financial planning require different skills, timelines, and different measures of success. You must separate the two streams of work if you want a real strategy.

But most organizations are not practiced at creative, strategic planning, and they are practiced at quarterly and annual financial planning.

So the money wins and the habits win. Strategic planning turns into numbers-driven operational planning.

Making your strategy more strategic

OK, so you have to deliver numbers to your executive committee. And you want to be credible and not look like you are changing your mind or getting surprised.

But just think about delivering your numbers on the planned schedule, and then run a strategic planning exercise completely separately, on a different calendar.

If you are saying, “But we can’t go back and surprise the board and ask for something different after we give them our operating plan”, think about it this way…

If you have a big customer bail on you, or a competitor makes a dramatic move (or the market crashes…) something that you need to react to, you are willing to go back to the board with reactive re-work.

So why not come up with a brilliant forward-looking strategy and associated investment plan? Then go back to the board and say, “We’d like to talk about a new investment”.

Or even better, when you go to get your financial plan approved, also discuss that you in the midst of a multi-year strategic planning process, and your goal is to uncover new growth opportunities outside the current operating plan, so stay tuned…That always worked for me.

What was that on page 132?

You should be able to be communicate your strategy  to your mom, without a powerpoint presentation.

If you can’t boil it down to a few key points, your team will never stand a chance of understanding it, internalizing it, and making the necessary changes in their day to day work to actually implement it.

  • Who are your customers? What do they value?
  • What is your advantage? How do you win?
  • What are your measurable objectives for success?

Who cares?

Another common sign of a strategy that isn’t going anywhere is when you have to call the business planning expert in to present the strategy.

Everyone in your organization should be able to communicate your business strategy to another person. And it should be the same story!

If that is not the case, you don’t have a strategy that will get executed.

Part of the problem is complexity, and part of the problem is taking the time to really include the whole organization.

Are you serious this time?

Most strategies fail not because they are not good, but because they don’t get executed.

Most strategies don’t get executed because the natural tendency for ANY organization when they hear about a new strategy is to think, “This is not serious, this will change again, the safest thing for me to do is to keep doing what I’m doing”.

You need to communicate the basic points of your strategy over and over (and over) again, if you want your team to act on it.
(More on how to communicate your strategy in a future post.)

Repetition is what makes people realize you are serious, every day, every week, every month, and every quarter until it’s done. Without this your strategy will stall.

What Good General Managers DO

This is fourth article in my series of
What Good General Managers DO.

Aritlces in the series so far:

People
Listen: Stay Connected to Reality

Process
The Gap Between Committed and Done
Failure & Motivation

Profit
Strategic Planning and Other Delusions (today)

Want more?

Awhile back I interviewed Bob Kaplan, former McKinsey Director on the topic of: Is Your Strategy Any Good? He talks about these, and more obstacles to a good strategy. It’s a great discussion.

You can get the interview here.

 

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You can find Patty at www.AzzarelloGroup.com, follow her on twitter or Facebook, or read her books RISE and MOVE.


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