Successful Strategic Planning

In my last blog post, I wrote about how to improve your strategic thinking skills. While this is a necessary leadership capability, as a leader you are also likely going to engage others to determine the future direction of your department or organization, because:

• Giving others a voice in the process helps get buy-in and engagement with the final strategic plan
• To assess the strengths and weaknesses of your department or organization, you must get the perspectives others, of different functions and at different organizational levels
• Other viewpoints can help you determine the highest priorities of your department or organization

One of the biggest responsibilities you will have is to ensure that your group is actually engaging in strategic planning and not other sorts of planning. The difference is that the end result of strategic planning is setting a new direction. Strategic planning is proactive not reactive. It involves inductive thinking – extrapolating beyond the facts in front of you – not deductive thinking, or responding with step-by-step reasoning to the facts given to you.

To better illustrate this, two activities frequently confused with strategic planning are contingency planning and budgeting. Both activities start with a known entity – for example, half our department will be retiring in two years, or we have $50M for our operations in 2016. Planning then involves responding to the known entity – how to fill the empty positions, or how to allocate the annual budget within the department. While this planning ends up defining new activities to respond to the known entity, the planning has not taken the department in a new direction, beyond what was already known. Therefore, it is not strategic planning. When planning is complex or looks ahead several years, it is even more likely to be confused for strategic planning.

So if that’s what strategic planning isn’t, here is a process to follow that does support strategic planning:

• Conduct an internal evaluation of your department or organization, both what is working well and what can be improved. Sometimes the bounds of “internal” are fuzzy, especially if you are only doing strategic planning for your department – so consider “internal” to be anything that is within your control, that you can influence. Think broadly to include things like resources (both human and other), processes, and capabilities.
• Identify and evaluate the impact of external patterns, trends, and developments, today and in the future. Consider not just your immediate industry and competitors but also legal, economic, technology, and cultural changes, for example, fluctuating oil prices, an increasing Latino population in the United States, and transactions of all types that are conducted more and more via mobile devices and the internet.
• Look for themes and issues from your analysis and distill them down into a SWOT analysis – Strengths, Weaknesses, Opportunities, and Threats. Strengths and Weakness are internal, Opportunities and Threats are external. Discussion within your team can help determine which are the most important points to include in these categories. Some good examples of these for major companies can be found here.
• Leverage your SWOT analysis to come up with key priorities for your department or organization – Key Issues and Critical Success Factors that must be addressed to ensure success.

KIs & CSFs should:

• Be consistent with your organizational mission and values. If your organization does not have a mission statement and values, then developing these should be the first step in the strategic planning process.
• Leverage Strengths and Opportunities and minimize Weaknesses and Threats.
• State “what” as well as “how.” For example, a major soft drinks company might “Diversify product portfolio (what) by developing a bottled water line (how).” (Assume that this reflects the company SWOT analysis).
• Not be so generic that anyone in any industry could say it, e.g., “Increase profits within three years.”
• Be no more than five items. If your list is longer than this, your group did not focus enough on identifying bigger themes or priorities.

Give your organization the best chance of success in a dynamic environment by anticipating change, not just reacting to it. Many leaders misunderstand or misapply strategic planning; make sure you are not one of them.

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