What Drives Your Strategic Plan?
Strategic Planning, or the Art of Knowing Where Now Is
For the last year or so, business conditions have been turbulent, to say the least. Quite difficult to plan your next step when you could be walking off a cliff or taking your first step upward to the promised land.
One of the biggest mental traps of strategic planning – or business planning of any kind – is believing that today’s conditions are permanent conditions.
Those of us who have been in business for any length of time know better. We have danced through booms and trudged through busts. We have gotten whiplash when the economy jerked in a wholly unexpected direction. And still we find it difficult to imagine a future that looks different from the present. Down cycles feel as if they must go to zero. Up cycles feel as if they must rise to infinity. Our brains tell us this is absurd, but our hearts tell us something else.
This is why investors sell at the bottom and buy at the top. This is why b2b firms slash marketing budgets in a recession and lose market share when the market advances. This is why b2c firms open 100 new locations when their stock price is soaring, only to shutter them when it hits the ground with a thud.
Inhabiting the corporate jungle are a few rare birds who see the future and fly to meet it well ahead of the pack. Every once in a while a Ray Kroc or a Steve Jobs comes along who not only sees the future, but makes it. Companies like McDonald’s and Apple don’t have strategic plans – they are strategic plans.
So where does that leave the rest of us, those for whom current conditions are as real as the earth between our fingers, and the future as misty as the clouds? How do we devise a strategic plan when everything beyond the clear and present is danger?
“Whenever people agree with me I always feel I must be wrong.” Oscar Wilde
- First, we must grab hold of the notion that whatever tomorrow ends up looking like, it will be different. Therefore, we need not one strategic plan, but several. The longer out we plan, the more detailed our contingency plans must be.
- Second, we should assume that if everyone sees business going in a particular direction, there’s a very good chance it will go in a different direction. Collective wisdom is a poor predictor. For more on this score, read Ken Fisher’s The Only Three Questions that Count. Even if you’re not an investor, you will benefit immensely from Fisher’s insights about human behavior and market dynamics.
- Third, we should focus more on being flexible and less on being right. Are you an agile climber who can conquer any mountain, or a dog that can bark up only one tree? Something I learned the hard way: just because you can win an argument doesn’t make you’re right; just because you can’t defend your position doesn’t make you wrong. We humans can talk ourselves into anything. Consider the political landscape. Twenty-odd years ago a tidal wave of free enterprise fervor swept the U.S. Now, the tide surges toward big government. Which is right? Which is wrong? A good business person would set aside those questions and build a company able to withstand either.
Over to You
How do you envision the future? What do you see for your business and the marketplace over the next five years?
This post was inspired by the Uncertainty Paradox discussions underway on these very fine blogs -
Bill Welter’s Adaptive Strategies Blog
Kay Plantes’ Business Model Innovation Blog
Fred Schlegel’s Frog Blog
Personally, I’m always optimistic about the future. Three things guide me and continue to push me: 1.) Set Clear Goals, 2.) Work Hard, 3.) Have An Unwavering Focus.
If I follow these three, I have a feeling everything will work out just fine…
Ricardo, I’ve always been a proponent of strong focus, but I’m curious – when conditions change, do you try to change your focus and adapt, or stick to your plan?
Thanks, Brad.
This is my first time to your site. I made the ‘jump’ from your “New Post” tweet and am glad I did.
Thanks for the Fisher reference, I’ll check it out.
I concur with your sentiment. As a person who very much operates in the present, I find Strat Planning (almost Scenario Planning) essential. I plan for all four corners of the room – worst, best, most likely and out-of-the-blue.
Having and working the plan is essential. I think of it like a sail on a yacht, a strong driver of forward momentum, but constantly repositioned to take advantage of the changing winds. The vision and core values/principles remain clear, but the priority of implementation may vary.
Best to you, Robin
PS: the future looks pretty bright to me.
Robin, Thanks for coming by and sharing your thoughts. Your sailing analogy is very appealing in that it suggests calm in the face of turbulence. That would be the perfect mindset for conducting business, especially in periods of upheaval.
Just checked out your blog as well – it’s marvelous, and I just subscribed!
“Down cycles feel as if they must go to zero. Up cycles feel as if they must rise to infinity. Our brains tell us this is absurd, but our hearts tell us something else.”
This observation reminded me of the statistical phenomenon of “regression to the mean”, which is a useful idea to remember in a wide range of circumstances, including investing. It basically means that when you’re in a down cycle it’s more rational (if more difficult) to believe that the more likely way things will move is actually up (and vice versa). It also explains what’s known as the “Sports Illustrated” jinx, in which an appearance on the cover of Sports Illustrated is said to lead to the sports star’s glory fading. In fact, to appear on the cover of Sports Illustrated you need to be at the very top of your game, which means that the only way is down.
I wish I’d reminded myself of all this during my summer work drought and just taken myself off to Positano for three weeks instead of worrying about how I’d pay my bills come the autumn. Now, I’m wondering how I’ll cope with all the work I’ve got coming in (which suggests I should actually be worrying about those bills!).
Longer term, I’m not sure I have a strategic plan beyond networking (on and offline), getting a name for myself through my blog, and focusing on the kind of work that I can learn from, that I enjoy and that offers opportunities for making new contacts.
On a more general note, I suspect that the global economy will get a lot, lot worse before it gets better and we’re in for a bumpy time this autumn. Ever notice dhow all those bank failures happen in September? It’s as if the bankers and regulators get back to their desks and say “Oh, I was hoping someone might have dealt with that little problem while I was away – better bite the bullet and own up to losing that thirty billion dollars.”
Thanks for a thoughtful post – enjoyed following links to older posts I hadn’t read before too!
Hi Clare, Regression to the mean and your experience this summer: a perfect example of how rational thought does not always dictate our actions. But I’m glad to hear your business is booming … which brings up a whole other set of planning issues I think I will write about in the near future. You and Robin seem to have differing views on the fate of the economy. Opinions do vary widely, which is where the “Uncertainty Principle” comes in. My own view is we are at a crossroads. Much depends on what sort of policies the U.S. government enacts and what happens to the Chinese economy. Big market movers, big unknowns.
Brad, you are right about planning for the longer term and having contingencies. Our current economy is not a result of the actions of our leaders within the past few years, but a ripple effect from decisions and actions from business, government and the people made many years ago. Today we are making decisions which may not impact us for several years. It is impossible to accurately predict what factors will converge to shape the future BUT we can plan for the what ifs. In many ways, smaller businesses have an advantage of agility not afforded to large firms, yet a strong economy needs a mix of large enterprise, and SMBs. What’s next? I wish I knew!
Karen, Small firms ought to be more agile, but there are very large organizations that adapt brilliantly. There probably isn’t any one secret. Every organization has to find its own formula for developing and executing plans.
Brad,
Good post and close to my heart.
First, to repeat you and others, there is no more normal.
Second, the laborious process of strategic planning has to be supplemented with the acceptance of the need for ongoing strategic thinking at all levels of management. This is especially true of the people on the front lines of business. Unfortunately, these people are often ignored while senior execs go off-site to create “the plan.”
Bill
Bill, Great point about the need for ongoing planning: strategy is a process, not a program, which is how I like to describe SEO as well.
Hi Fred, Yet another brilliant post! Your 3 P’s make perfect sense, and wouldn’t it be amazing if an organization could be a perfect “10″ in each one? Seems to me that perspective would be the most challenging discipline for a large organization, because so much goes on internally that requires continuous attention.
Brad Shorr´s last blog ..A Collection of Funny Word Sell Posts
This comment was originally posted on Frog Blog
Excellent post…I think so many times people use lists like these the wrong way — as ends instead of means. While the story may start with the 5 W’s (if I a remember my journalism classes correctly!) they certainly don’t end there. The 3P’s are excellent because they are a “thing” but a way of thinking and acting….they are the means by which one can innovate within any boundaries!
This comment was originally posted on Frog Blog
Hi Brad, So much of this ends up being personality based. When I first started out I could see all the pro’s and con’s of everybody’s opinion and ended up looking as focused as a wet noodle. Distinguishing between the different ‘right ways,’ picking one and moving forward trips up a lot of people and large corporate environments make it even worse. I’m not sure any company can be all 10’s all the time. More like the aligning of stars. You work to balance out the factors and hope to get them lined up at just the right time. Thank you for your kind words!
This comment was originally posted on Frog Blog
Thank you LaVonn. That’s also why I’ve gone back to look at the 3 v’s mentioned. They are interesting constructs that help you decide where you are in a process and what you should be looking out for, but not limiting your scope.
This comment was originally posted on Frog Blog
I’m a fan of frames and mental models, too and Perspiration, Perseverance and Perspective is perfect.
I actually keep a catalog of models from A-Z for various disciplines. It helps me quickly hone in on distinctions or strategies and get thinking in the right direction.
J.D. Meier´s last blog ..The Power of Patterns and Practices
This comment was originally posted on Frog Blog
Hi J.D., Your blog is a fascinating place to find those models. I’ve been wondering how you keep them straight as you have been developing your work. Glad this rings a bell.
This comment was originally posted on Frog Blog
H Fred. Perspiration, Perseverance and Perspective compared to the 4Ps is metaphorically like putting the driver and the human component in the driver’s seat. What’s neat about this too is that when a person is prepared to put forth the Perspiration, Perseverance and Perspective, things “happen” — it brings those “P” lists to life.
Davina´s last blog ..The Thyme of My Life
This comment was originally posted on Frog Blog
Hi Davina, ‘things happen.’ That’s really the long and the short of it isn’t it.
This comment was originally posted on Frog Blog
Hi Fred, Yet another brilliant post! Your 3 P’s make perfect sense, and wouldn’t it be amazing if an organization could be a perfect “10″ in each one? Seems to me that perspective would be the most challenging discipline for a large organization, because so much goes on internally that requires continuous attention.
Brad Shorr´s last blog ..A Collection of Funny Word Sell Posts
This comment was originally posted on Frog Blog
Excellent post…I think so many times people use lists like these the wrong way — as ends instead of means. While the story may start with the 5 W’s (if I a remember my journalism classes correctly!) they certainly don’t end there. The 3P’s are excellent because they are a “thing” but a way of thinking and acting….they are the means by which one can innovate within any boundaries!
This comment was originally posted on Frog Blog
Excellent post…I think so many times people use lists like these the wrong way — as ends instead of means. While the story my start with the 5 W’s (if I a remember by journalism classes correctly!) they certainly don’t end there. The 3P’s are excellent because they are a “thing” but a way of thinking and acting….they are the means by which one can innovate within any boundaries!
This comment was originally posted on Frog Blog
Hi Brad, So much of this ends up being personality based. When I first started out I could see all the pro’s and con’s of everybody’s opinion and ended up looking as focused as a wet noodle. Distinguishing between the different ‘right ways,’ picking one and moving forward trips up a lot of people and large corporate environments make it even worse. I’m not sure any company can be all 10’s all the time. More like the aligning of stars. You work to balance out the factors and hope to get them lined up at just the right time. Thank you for your kind words!
This comment was originally posted on Frog Blog
Thank you LaVonn. That’s also why I’ve gone back to look at the 3 v’s mentioned. They are interesting constructs that help you decide where you are in a process and what you should be looking out for, but not limiting your scope.
This comment was originally posted on Frog Blog
I’m a fan of frames and mental models, too and Perspiration, Perseverance and Perspective is perfect.
I actually keep a catalog of models from A-Z for various disciplines. It helps me quickly hone in on distinctions or strategies and get thinking in the right direction.
J.D. Meier´s last blog ..The Power of Patterns and Practices
This comment was originally posted on Frog Blog
Hi J.D., Your blog is a fascinating place to find those models. I’ve been wondering how you keep them straight as you have been developing your work. Glad this rings a bell.
This comment was originally posted on Frog Blog
H Fred. Perspiration, Perseverance and Perspective compared to the 4Ps is metaphorically like putting the driver and the human component in the driver’s seat. What’s neat about this too is that when a person is prepared to put forth the Perspiration, Perseverance and Perspective, things “happen” — it brings those “P” lists to life.
Davina´s last blog ..The Thyme of My Life
This comment was originally posted on Frog Blog
Hi Davina, ‘things happen.’ That’s really the long and the short of it isn’t it.
This comment was originally posted on Frog Blog