Many of the strategic plans I see these days aren’t strategic at all — they don’t address business strategy. Instead, they focus almost exclusively on annual objectives, projects or tasks and call them ‘strategies.’
The downside is three-fold:
First, it creates a myopic view of the business, not a high-level, strategic view — it focuses on a multitude of tactics and misses the big picture and all its implications. With a business strategy you can look beyond immediate needs to prepare for growth in ways that aren’t readily apparent.
For example, on client of mine, a consumer goods manufacturer, realized from their strategic plan that more focus was needed on product development capabilities — truly the lifeblood of the company. Not just running harder, but getting stronger.
The second downside is that ignoring business strategy and concentrating on tactics invariably creates an obsession with fixing problems. But the real value of a business strategy is in raising the bar — focusing on strengths and opportunities.
Third, when there is no overall direction and no real strategic thinking, thre is no meaning, no excitement, no passion — nothing for employees to latch onto and believe in — just more of the same: put your head down and keep running.
Real strategic planning begins with a solid understanding of the company’s competitive market position. It highlights direction and capabilities — what the organization needs to do extremely well to be successful. It identifies important organizational capabilities, key processes, and critical positions. It helps identify the right organization structure, management style, people processes, and compensation plans that support the business strategy. And it provides the direction to allocate resources for profitable growth.
If your strategic planning process skips over or gives just cursory attention to real business strategy, you’re not dealing with strategy at all. Your strategic planning process needs to be redesigned. Now is the time to act on it.
Copyright Bob Legge 2010