Does your planning have any strategy?

This is the time of year when a lot of businesses will carve out some time and do some strategic planning. But unfortunately many of those businesses will leave out the strategic part.

When you think about strategy, you should be thinking about a cohesive response to an important challenge. Instead many businesses will throw out performance metrics or goals and call it strategic.

Stating that you’re going to grow the business by 10% is not strategic for several reasons:

1. Undefined challenge – for starters, 10% growth doesn’t address a specific problem, it’s simply a desire for more… and by sticking to a modest growth target the likely outcome is a push to simply work harder (which may or may not help).
2. Lack of Direction – simply setting a goal doesn’t tell the team how they should be thinking about things. There’s no clue in terms of what’s different from the past and if there’s an overriding ‘policy’ to focus on.
3. No ‘How’ – Similar to a lack of direction but even more important, a goal doesn’t lay out the actions that need to be taken in order to succeed.

Don’t get me wrong – having a goal to increase your revenue by 10% is a perfectly fine goal. It’s just not strategic in any way. Likewise, stating that you’re going to improve your marketing, implement a new payroll provider and develop a new product is not strategic. It’s simply a mishmash of activities – potentially all worthwhile, but not strategic.

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What is strategic?

A good strategy is a cohesive and comprehensive approach to solving a challenge. In the late ’90’s when Steve Jobs reinvigorated (reinvented?) Apple, the challenge was clear – they were failing and headed towards bankruptcy. His strategy was equally clear – Apple was going to cut back (simplify) to the core of the business and build from there.

To make that happen, he used a cohesive design that cut out all of the extra noise that Apple had accumulated over the years. He cut them back to manufacturing just one desktop and one laptop, got rid of all the printers and peripheral devices, he cut distributors and all but one retailer and opened a new web store for a direct sales model. And he clearly told everyone exactly what he was doing and what the overall intent was behind the process – which made sure everyone was on the same page.

Apple is obviously a historic success story – but you don’t need a dramatic turn-around or huge sweeping change to enable a good strategy. Instead you need to focus on 3 things: Figuring out the challenge you want to solve, identifying the strength or advantage you want to leverage and coming up with an overall direction and actions for the entire team to take.

Figuring out the challenge

Although it sounds simple enough to figure out what challenge you’re trying to solve, the reality you often need to dig to get to the real challenge. Saying that you need more profits isn’t helpful, but understanding why and where your profits are low (relative to your competitors) will help you identify where you should focus your efforts.

Identifying your strength or advantage

The essence of strategy is finding a way to leverage a strength in such a way that it gives you a meaningful edge that you can exploit. If your basketball team is playing against a team that’s substantially shorter than you are, then your advantage is your height and you need to find a way to exploit that relative strength.

Creating overall direction and specific actions

The last step in creating an effective strategy is make it real. That starts with being clear on the overall intent, but you also need to develop the specific tactics and actions that need to be taken (and be clear on who will take them) if you are going to have any success.

Back to our basketball example – you know you’ve got a height advantage but unless you clearly tell the team that you want to deploy a zone defense and only run offensive plays that highlight post shots, they won’t necessarily know what to do.

With all of that in mind, here are some questions you can ask yourself (or your team) during your next planning session.

What do you think? Have you been strategic with your planning? We’d love to hear your thoughts – leave us a comment or reach out to us.

Shawn Kinkade Kansas City Business Coach