“Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different.” ~Michael Porter, Harvard Business School professor
Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, and strengthen operations. It ensures that employees and other stakeholders are working toward common goals and establishes agreement around intended outcomes by assessing and adjusting the organization’s direction in response to a changing environment.
Executed well, strategic planning is a disciplined effort that produces fundamental decisions and actions that shape and guide the organization’s purpose, who it serves, what it does, and why it does it – with a focus toward the future. Effective strategic planning articulates not only where an organization is going and the actions needed to make progress, it also defines the key outcomes that will determine success.
Developing a strategy is important, yet most leaders are uncomfortable with the process because they are forced to confront a future they cannot accurately predict.
Organizational strategy is developed and applied in a fluid and unpredictable environment. The world doesn’t stand still while we plan. Therefore, planning’s highest and best use is to prepare an organization for change and ultimately becomes a device for navigating disruptions and headwinds. Roger L. Martin wrote in The Big Lie of Strategic Planning, “good strategy is not the product of hours of careful research and modeling that lead to an inevitable and almost perfect conclusion. Instead, it’s the result of a simple and quite rough-and-ready process of thinking through what it would take to achieve what you want and then assessing whether it’s realistic to try.” True strategy is about making tough choices and placing bets. If leaders adopt this mindset about the strategic planning process, the actual plans become less important than the strategy.
Mistaking planning for strategy is easy to do. Strategic plans are usually pretty similar. They tend to have three major parts. The first is a vision or mission statement that sets out a lofty and ambitious goal. The second is a list of initiatives—such as product or service launches, geographic expansions, and construction projects—that the organization will carry out in pursuit of the goal. The third element is to identify the monetary cost of the initiatives. In this way, the plan dovetails nicely with the annual budget.
This exercise arguably makes for budgets that are more carefully considered and accurate. However, it must not be confused with strategy. Planning typically leaves out discussion of what the organization chooses not to do and why. More importantly, planning does not question the assumptions used to determine which initiatives deserve organizational focus. Quite simply, planning – as opposed to strategy – often fits the initiatives into the organization’s current resources rather than allocating resources to the initiatives most likely to differentiate the organization in the marketplace.
Leaders who view the plan as a guidance tool are less likely to fall into the trap of mistaking planning for strategy. The intended purpose of a strategic plan is not a set-and-forget instrument. A strategic plan is a living and breathing document that guides decision making and the deployment of resources. The fact that circumstances are changing rapidly is a very good reason to use the plan for guidance and to revisit and adjust the plan regularly. This allows leaders to not only update the plan due to changed conditions but to also go through the actions that were scheduled for completion as part of the execution process.
At its best, a strategic plan helps to establishes the direction in which an organization will travel and assists in establishing priorities that are aligned with the organization’s vision and mission. It provides a necessary foundation from which an organization can grow, effectively make decisions, navigate change, and evaluate its success.
Grow with purpose.
Emily Rogers is an executive coach, business consultant and retreat facilitator. She strategically advises and supports organizations and individuals in growing and realizing their full potential in purposeful and balanced ways. You can connect with her at www.emilyrogers.com