Create the route your organization needs to follow to reach your vision
In one word: Strategic planning is a methodical process for creating a map for the general path your company is to follow, with the intention to increase your organization’s potential.
To put the definition of strategic planning in even fewer words, Michael Porter in “On Competition” (Harvard Business School Publishing, Boston, MA: 2008) says that strategic planning is learning to be different.
Now, does every company needs strategic planning? Some people (successful CEO’s, consultants, authors, etc.) scream out loud a resounding “yes.” See for example Robert S. Kaplan and David P. Norton, “The Strategy-Focused Organization” (Harvard Business School Press, Boston, MA: 2000).
However, some other people (other successful CEO’s, consultants, authors, etc.) scream out loud a resounding “no.” See for example Henry Mintzberg, “The Rise and Fall of Strategic Planning” (Free Press, New York, NY: 1993).
Who are you going to believe?
It’s your call, which depends on several variables: Your own leadership style, the culture of your organization, the market conditions in which you operate, etc.
–––~~~••• O •••~~~–––
Five Characteristics of Winning Strategies
A definition of strategic planning is not enough by itself.
William Joyce, Nitin Nohria and Bruce Roberson in “What Really Works: The 4+2 Formula for Sustained Business Success” (Harper Business, New York, NY: 2003) published their discoveries about the keys to high performance.
Among many conclusions in several areas (execution, culture, organizational design, etc.), specifically about strategy, they found the following five mandates – which we reproduce here because they pinpoint exactly what it takes to build a strategic competitive advantage:
First: “Build a strategy around a clear value proposition for the customer.”
Your value proposition must be a statement of what you actually are – not just something you aspire to become. “Your value proposition must exist in the interface between a company’s ability to deliver a product or service and the perceived needs and desires of a targeted market segment.”
Your value proposition must be “rooted in a deep, certain knowledge of [your] targeted customers and a realistic appraisal of [your] own capabilities.”
Definition of strategic planning? Don’t ever plan, write, or promise anything you won’t be able to execute and deliver flawlessly.
Second: “Develop strategy from the outside in. Base it upon what your customers, partners, and investors have to say – and how they behave.”
The high performing organizations developed their strategies genuinely based on the words and actions of their customers, partners, and investors. “The strategies were, in fact, developed from the outside in.”
Definition of strategic planning? Don’t ever develop your strategy without authentically taking into consideration all your stakeholders’ interests – employees, customers, suppliers, stockholders, community, etc.
Photo courtesy of Jurvetson
Third: “Maintain antennae that allow you to fine-tune your strategy to changes in the marketplace”
“Winners typically monitored not just their immediate customers and competitors but customers and competitors in adjacent businesses.”
Definition of strategic planning? Don’t ever become inwardly focused – no matter how successful your organization turns out to be.
Fourth: “Clearly communicate your strategy within the organization and among customers and other external stakeholders”
Your strategy “must be presented and explained first and foremost to the people who will be bringing it to life – your managers and employees.”
But this is just the beginning of the high performers’ savvy, because also, “… the ability to share their strategies with customers was a hallmark of winning companies. [ … ] Winners are communicators.”
Definition of strategic planning? Don’t keep your strategy just for the elite of your organization: Top executives, directors, general managers, etc.
Fifth: “Keep growing your core business; beware the unfamiliar”
“Winners stay winners because they start building their next growth business before the growth potential of their core business shows signs of disappearing.
Definition of strategic planning? Never become complacent – ever.
–––~~~••• O •••~~~–––
There are literally hundreds of books about strategic planning. However, I particularly like these three books because of their simplicity, clarity, and thoroughness:
This book can be used practically in any organization – highly recommended: