If you think that strategic planning is tedious, uncertain, and difficult, you certainly aren't the first ones to tell us so. This white paper compiles a list of the 7 most common objections we hear to strategic planning, and uses research and facts to give an objective view on the modern movements and trends in strategy. The aim of this white paper is to show that strategy consultants understand the problems with traditional strategic planning, and that strategy is moving towards mitigating these key concerns.
1. “There is too much change happening, strategic plans are obsolete”
One of the criticisms to strategic planning today is that, due to the unpredictable nature of industries and the economy, especially with constant disruptions in technology and policies, managers don’t want to waste resources on planning a future that becomes obsolete once something fundamental changes.
People often confuse having a strategy document and actual strategic planning. An effective strategy would have the flexibility built in, done through contingency and scenario planning, and processes for decision-making when large obstacles appear. A plan for a single future, which is what may companies call their “strategic plan”, is going to end up being the obsolete document that no one wants to invest in.
A movement known as the agile movement is beginning to take root in both small and large companies around the world. The agile movement first came from developers, where constantly adapting to demands and the environment is absolutely necessary for survival. It counters a lot of the objections today about strategic planning being slow and limiting. In business management, agile planning is where the ultimate goal is broken down into bite-sized week-long or month-long “sprints”, after which management evaluates the progress of the “sprints” in reaching the set goal.
The agile process favours experimentation over elaborate planning, and makes businesses much more adaptable to the external changing environment. SME Strategy uses this principle by conducting 1-2 day facilitation sessions, where the structure is to develop a plan for action with quick decision points. In one day-long session, we help clients set an action plan that would otherwise take months to research and develop.
The mindset around strategic planning needs to be to plan for change, and not planning for one version of the future. Using agile principles and breaking down the pieces and problems, investing in strategic planning prepares companies for the future.
2. “There are too many strategic plans that are useless or not followed through”
The dreaded black hole of strategic planning is the dozen page document that sits on the CEO’s desk, written by an external party and never to be touched again. There is a clear distinction between a strategic plan and actual strategic planning, and it is most clearly differentiated based on alignment and buy-in of the organization.
A strategic plan that is filled with jargon words like “leverage” or “accelerate” does not give clear takeaways to employees about the direction of the organization. There almost never exists a need for a small to medium-size business to have a dozen-page strategic plan for internal management purposes.
Remember that when everyone in the organization is busy, there is no extra time for people to read and absorb a lengthy and complicated strategic plan. Instead, have a one-pager with simple words and concepts that can live in the organization and be easily remembered is the most powerful. With a clear vision, mission, and strategic goals, everyone will be more clearly aligned on where the company is going. Then, instead of spending precious resources on further planning, the leadership team should focus their efforts on setting processes to allocate responsibilities and meet strategic priorities.
3. “Strategy is difficult to measure, therefore, it’s easy to make the wrong decisions”
One thing that we always tell clients is that strategic planning will always seem daunting until you actually do it. A strategy meeting can be completely unproductive without clear direction and objectives, but we have also helped leadership teams gain clear strategic direction in a single day. The agreement of the entire team on strategic priorities is much more important than research and analysis in coming to a decision. With this in mind, strategic planning doesn’t necessarily have to be a complicated process.
It is understandable for any business to avoid confronting a future that they can only guess at, especially with the trend in business today to back up everything with numbers, from costs to conversions. Rather than thinking about a difficult future, managers are often too occupied with daily tasks. For example, everyone knows that there will be another market correction or recession in the next few years, but very few companies we work with have a contingency plan to get themselves through a financial crisis. It’s not poor planning, it’s just easier not to think about it. However, during a recession, being prepared gives you a tremendous opportunity to make strategic decisions while competitors are rushing to firefight their problems. During the 2008-2009 recession, Netflix was able to build up a greater user and profit base by investing more into their entertainment streaming services and marketing, helping them soar through the recession.
Many people think that good strategic planning is exclusive to giant companies like Google, who are better equipped to make data-backed strategy decisions. With the trend towards the agile movement mentioned earlier, testing on the market becomes even more important than research and data. Testing is especially accessible to SMEs because it can be conducted by any size company in any industry for any test size. Therefore, the trend for strategy is getting more accessible to companies of any size.
Instead of being reactionary, companies that plan contingencies ahead of time for disasters have an opportunity for them to push themselves further ahead. A problem is most easily solved if a business is able to recognize it, and a big part about what we do in strategy is to dig into a client’s root problems and motivations to leverage them for strategic planning.
4. “We don’t have time to be taking on even more – like strategy”
When companies tell us that they don’t have time, usually it indicates that they are trying to do a little bit of everything. Some task are more productive than others, but “shiny object syndrome” pushes businesses to think that if they aren’t jumping on the recent trends on the news, then they’re falling behind. Shiny object syndrome without a strategy backing it greatly slows down a company in moving towards its vision.
In our process, we help our clients find three key strategic priorities that will help them achieve their strategic plans, by focusing in on the key bottlenecks in their organization preventing them from getting where they want to go. Therefore, managers no longer feel like that they are spread out too thin and needed to do everything at once, and constrained resources like time, people and processes are allocated to the areas that are most productive to the organization.
5. “High cost – with unknown results, strategic planning is a risky investment”
Do to the uncertainty of the future, business owners are more preoccupied with the problems happening in the present. However, these same business owners and managers are confessing that they always feel like they are fighting fires in the present. Whether it is scaling too quickly, unhappy customers, supplier problems, or something else, these problems are less likely to impact your business if there is a plan in place. The costs of constantly being reactionary to your problems multiply overtime. In addition to solving the problem, you have to control for damage, incur legal fees, and manage stress and inefficiencies due to the uncertainty with your people.
There is not a time where the future will not be uncertain, therefore, with this logic, there will never be a time fit for strategic planning. You can’t be “sure” about your strategy, but a proper strategic plan will still give you more certainty than not having one.
6. “Not everyone will agree, trying to plan is a waste of time”
Getting alignment for a team can be an arduous and difficult process. Our clients often believe that any disagreements should be discussed in a meeting, and a clear conclusion will be made by the end. As you can image, things don’t usually happen that way. Listening to everyone’s reasoning, effectively directing the conversation and making compromises is a lengthy and difficult process. Therefore, if you’re going to lead your own strategic meeting, be prepared first. Talk with team members beforehand to learn what they want to get out of the strategic meeting, what their biggest pain points are, and what their ideas and opinions on the topics of discussion are. When strategy involves everyone in the organization, the process should be eased only people overtime by talking about it beforehand and afterwards.
If the plan is solely owned and implemented by the CEO, sometimes the goals are not conveyed well, and teams start to diverge based on their own interpretations on what they think needs to be done to reach the goals. The most successful strategies are those where there are clear lines of communication for decisions, and everyone clearly understands what the mission and vision of the company are, then have autonomy to act how they think is best in accordance with the vision and mission.
7. “I’ve never needed a strategy before, why do I need one now?”
It’s easy to fall into the lull of a false sense of security because things seem to be going well. However, market and environment trends are constantly changing, and the reality today might shift drastically tomorrow. Be on your toes, react to changes in environment immediately. Do your PESTLE and apply changes accordingly
There is a clear distinction between strategy and processes consulting. While processes helps companies make what they currently do more efficient, companies who don’t do strategic planning have a tendency to generate revenue from only what they do well. Intuitively, there is nothing wrong with this approach. However, in the sustainable long term, a company that isn’t forward-looking cannot innovate and adapt to new trends. Take Microsoft for example. In the 2000s they owned the operating systems in 95% of computers. However, now in the smartphone age, they hold less than 5% of all smartphones operating platforms. After Bill Gates retired, the new CEO of Microsoft focused on generating revenue from existing business lines and succeeded, but Microsoft has since fallen behind on innovation. Strategy is a key component to continuing to be relevant in our age.
We hear a lot of reasons from business owners about why strategic planning isn’t right for their business specifically, but the reason SME Strategy does what we do is because we think strategic planning can benefit every organization. Whether it is employing the advantages of agile decision making, saving money and resources by planning for the uncertain future, or getting alignment for businesses, strategic planning builds the foundation for companies to achieve their vision and mission. Remember that it is never too late to start strategic planning, except that it is better done sooner rather than later.
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