Strategic planning must change with the times

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2016

If you’re frustrated by your organization’s current strategic planning and execution processes or the outcomes from that work, you’re not alone. Whether they’re developed in-house or brought in by outside strategy firms, many strategy methodologies are of little value if they don’t keep up with the times. So if you always do what you have always done, you will always get what you have always got. Clearly, it’s time to reconsider how your organization goes about developing and executing strategy at all levels.

Here are 10 changes needed to enable a wholesale paradigm shift in strategic planning and execution methods that will significantly improve your results:

1. Ownership: At whatever level strategy is applied, it typically has been owned by the most senior leaders in the organization. Strategy is perceived as belonging to the corner office and those that sit on the executive floor. While setting direction is the responsibility of good leaders, that direction is meaningless unless it is shared and understood by leaders at every level.

Limiting strategy development to a handful of senior leaders is insufficient to create the broad ownership necessary to execute successfully with speed. The shift required for success is to have leaders at every level and unit take ownership in the development and execution of strategy. By creating broad ownership for and understanding of the organizations strategy, execution becomes a certainty.

2. Strategy Focus: Read any strategy document developed in the old paradigm and you will likely see a predominant focus on the financial outcomes that the strategy is designed to deliver. Focusing on financial outcomes is important but the details on how those outcomes can be achieved and sustained are usually missing or to high level to be actionable.

In the new strategy paradigm, the focus of strategy is on how to create competitive advantage. The strategy should be focused on actions the organization can quickly take to create uniqueness and differentiation in the products, services and culture that competitors cannot match or duplicate. Engineering and creating sustainable advantage is the focus of the new paradigm for strategy management, detailing how the intersection of intelligence and innovation come together to deliver and sustain superior financial performance and value creation.

3. Priority on Drivers, not Outcomes: Typically there are too many initiatives identified as necessary to realize an organizations strategy, and more than can be done within time and financial constraints. Trade-offs and decisions on priority initiatives must be made to ensure focus and the best allocation of limited human and financial resources.

In the new paradigm of strategy management priorities also must be decided but those priorities are on immediate actions that move the performance needle on the drivers of change not on huge multi-year, expensive initiatives. The priorities are on people and capabilities not things. Putting the right leadership, talent, organization, and culture capabilities in place to drive change and execute strategy is the priority. Ensuring that an organization does not fall into the trap of prioritizing outcomes from change ahead of the capabilities to drive and execute them is the shift that will result in faster realization of results.

4. Engagement: In the old strategy paradigm participation is limited to the involvement of the senior team, a few staff functions and an external consultant that facilitate the process. In the new paradigm, developing, planning, and executing strategy is more inclusive so that strategy becomes the job of every employee not just a handful of senior executives.

Relying more on the expertise of your people at all levels and less on outside experts will enroll your people in the strategy. Designing broad involvement into the strategy development and execution process will rapidly increase the quality of your strategy, build broad ownership and commitment, reduce resistance, mitigate execution risks and accelerate results.

5. Planning Horizon: Old paradigm strategic planning has been historically focused on a long term horizon, usually between 3-5 years. This made sense 50 years ago when the environment was less dynamic and long term line of sight was more likely. Given today’s turbulent and rapidly changing environment, line of sight beyond 90 days is not plausible in most industries.

While establishing a long term vision for all employees to understand is still very important, the strategic planning horizon in the new paradigm needs to be shorter term, agile and rapidly adaptive. The new paradigm for strategy focuses on advancing the organization towards its vision in an iterative planning and delivery cycle every 90 days not once a year.

6. Time to Results: As the saying goes, speed kills. But in the realm of strategy just the opposite is true. Mechanical, step by step linear process for developing and executing strategy from the old paradigm is too slow and is not designed to deliver results rapidly. In the old school many strategists, consultants and senior executives have been so caught up in their methodology, process, best practices, and politics that they can’t see the forest for the trees.

Key to the new paradigm is to immediately direct attention and energy on the identification of strategic performance drivers and competitive advantages that can be delivered in days, weeks or months not years. Your strategy process must deliver fast! Simply put, the current strategy paradigm is just too slow, inflexible and complex to achieve rapid breakthrough performance. Adopting the new strategy paradigm will help to make your organization approach to strategy fast, adaptable, action oriented and results driven.

7. Change Philosophy: In the old paradigm strategy development and execution rested on a compliance philosophy about change. The assumption is that once the strategy established direction, all employees would follow or face the consequences. Any resistance to change would simply be overcome with rules, policies and managers to force compliance. In the new paradigm, there is recognition that people are experiencing very high demand for change. To get their attention a more effective philosophy of building critical mass commitment is necessary.

In the new paradigm, strategic planning includes processes and techniques that build commitment to the changes required by the strategy amongst a targeted group of employees that represent critical mass and the tipping point from which the organization will rapidly advance. Energy is put into a process of enrolling and engaging employee groups to build strong understanding and commitment to execute change quickly and deliver results rapidly.

8. Alignment: When it comes to strategy, alignment is a critical success factor. That has been recognized in the old paradigm of strategy management and is typically addressed by engaging the different business units and functional areas in planning exercises that ensure their objectives and budgets are aligned and supportive of the overall strategy. While necessary, it is insufficient to ensure the degree of alignment necessary for successful and sustainable strategy execution.

In the new paradigm, a proactive and architected approach for cascading alignment down and across the chain of command to ensure that leaders and their teams at every level have personal performance objectives and incentives that tie to the accomplishment of strategic goals.

9. Oversight and Risk Management: Executing Strategy is a team sport that requires horizontal and vertical teamwork across all areas of an organization. For most organizations, cross silo cooperation is an unnatural act. In the new paradigm it is a core capability. To create competitive advantage and the value that it creates, an agile but powerful cross-functional governance process is required.

Traditional oversight that is ad-hoc and lacks the involvement from the right leaders is not effective at managing execution risks and driving change. In the new paradigm, a powerful cross-functional team is formed by design with the right leaders who are accountable to provide governance, remove roadblocks and to get rapid results.

10. Culture Integration: Culture either evolves or is architected. The old paradigm of strategy assumes the existing culture is sufficient to accommodate and support strategy goals. The new paradigm requires a proactive approach to assess and manage the culture. Culture is designed to support the accomplishment of strategic goals and to sustain break-through performance long term. We counsel our clients to consider company culture as a strategic element that must be included and cultivated by design in the strategy planning and execution process.

These 10 shifts can help any organization at any level get better results. An honest assessment of your organizations current approach to strategy against these will reveal where you have opportunity to increase your success and drive superior results.

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About The Author

Mark Heffner
Mark Heffner

Mark Hefner is the President and Chief Executive Officer at N2Growth. He has worked with Boards, CEOs and their Management teams for over 30 years to find and develop leaders, build talent, execute strategy, transform businesses.