What Is Strategic Planning

What Is Strategic Planning?

Well … for one thing, it’s perhaps the most misused phrase in business!

Let’s start with what strategy is.

On second thought, let’s start with what strategy is NOT!

  • It’s not a budget.
  • It’s not a fat document.
  • It’s not problem-solving.
  • It’s not intuition.
  • It’s not that thing you do every November.
  • It’s not a mystical chant.

And, my favorite, it’s not “executing well!” Executing what?!

Strategy identifies why people will buy from you versus your competition. Where will you compete, and how will you win?

Strategic planning involves thinking about the future and identifying how you’ll prosper. It differs from planning because you look at the future and then work backward to identify the actions that will get you to that future state. Planning works from the present to the future.

Most “strategic planning” meetings have little to do with strategy. They’re about budgets and action plans, and they’re terribly important! But they don’t answer or reconsider what a company’s strategy is. Participants assume they already have one, though they often can’t succinctly relay it. Quick … in two or three sentences: What’s yours?

Can’t I just do what I’ve always done?

Inertia can play a significant role in business. If you’re just doing what you’ve always done, or what the previous guy did, and it’s working, you’re lucky. It might get you through your career if the future doesn’t look different than it does today. That’s not effective leadership, however —it’s just presiding.

Isn’t it mostly about luck?

If your strategy doesn’t identify the specific markets you compete in and why people will buy from you versus your competition, then it’s bad. You’ll need to rely on luck. In fact, if you’re in a high-margin business, you may not know it, but you’re being hunted.

Few would argue the notion that successful business requires good fortune, and many would argue that it benefits from divine intervention. I wouldn’t quarrel with either concept. One thing I know, however, is that unless you have the luck of the Irish or a lock on divine intervention, effective leadership requires you to think strategically and plan.

We already plan!

Planning is tactical. Hopefully, the plans support the strategy, but a bunch of tactical plans (once again, VERY important!) bundled into a document don’t add up to a strategy any more than a pile of lumber is a house.

Mike Tyson, great strategic thinker that he is, said, “Everyone has a plan until they get punched in the mouth.” He’s wrong; not everyone has a plan. The part about getting punched in the mouth changing your perspective is spot on, however annual planning sessions are necessary, as are budgets. But don’t confuse them with strategy.

How do you craft a strategy?

There are three requirements:

  • You must have a process. Smart people in a room with a flipchart is not enough.
  • Involve the right people. Whoever owns the results must craft it (usually facilitated but with the CEO and senior team).
  • Commit to do the hard work.

There are many processes for strategic planning; I use several. (If you’ll allow it, let’s call it “crafting strategy” — it’s part science and part art.) You’re really facilitating a conversation with your team to think about the future (using as much logic and evidence as you can) and to identify how you’ll prosper in that environment. It’s about making decisions, not theory.

Leadership comes with obligations!

If you’re the CEO, you can’t merely preside — you must lead. And one critical question you must answer is, “What’s our strategy?” Effective leadership requires you to think about the future and plan how to succeed in that environment. Your stakeholders need you to do it. It’s not just about you.

Why are you here?

If you searched for the term “strategic planning” on the web and ended up reading this post, I suspect you need one of three things:

  1. You cannot clearly articulate your strategy and need help crafting one,
  2. you’re holding your annual “strategic planning meeting” (it’s probably not!) and don’t know what to do during those three days, or
  3. you’re a CEO and believe that you alone are supposed to divine a strategy for your company and are mystified about how to do so.