Tuesday, May 20, 2014

BALANCE as the Key in Strategic Planning

It would be great if so-called strategic plans actually had a STRATEGY in it.

Crafting a good strategy is indeed challenging, as a strategy needs to have the “vision thing” to inspire the team; but also, be detailed enough for execution. To put simply, you must have balance - and this is often where businesses fall down. 

The vision thing: Organizations should not spend more time on strategizing than on taking care of today's business, but certainly they need to spend enough time. The hard part is the "dreaming" or the vision thing. A good strategy shall be foreseeable enough to zoom into the future, bring the excitement to inspire the team, aggressive enough to stretch out the goals and agile enough to adjust to the changes. However, some hold an idea that strategic planning is only about dreams and aspirations. It is not that dreams and aspirations are bad; it's just that they aren't powerful enough to overcome the inertia of the status quo without logic to support or roadmap to reach it. 

 Decision Intelligence: Decision modeling has a profound impact on strategic planning. Focus on the outcomes that the organization wishes to achieve, determine the decisions that can impact the outcomes. Incorporate external factors and wire everything together so that the impact of decisions made in the strategic plan on the future outcomes is clearly understood. Periodically, you should start with a blank sheet to do strategic analysis such as SWOT: What are your current strengths, how is the market developing, what are your weaknesses etc. If you don't, it might be that you are very good at something for which the market has no demand anymore. Even if you're not really into "the vision thing", you can get a fairly good strategic plan with a well-informed assessment of how your environment is likely to change and what capabilities you will need to succeed in the face of that change.

The better approach to strategic planning is to actually do strategic planning - far too many businesses are really focused on the tactical approach about fixing issues. At present many businesses are strongly in the 'cost cutting' mode - which will damage them in ways unforeseen, as that perhaps includes a reduction in the ability to chase opportunities - you have cut costs, therefore, you have cut resources, therefore, you have fewer people to chase opportunities. The blocking factors to a good strategy include: 
1) It is easy to look like you are making progress by focusing on the tactical issues.

2) It is very much harder, and requires a degree of bravery, to really tackle what is wrong at the strategic level. Because to really achieve this requires the massive transformation in most cases, and a great many unpopular decisions!                                                                                        

3) With regard to strategic thinking, most executives are open to doing a better job of it. However, they are a little reluctant to have process and methodology in supporting it, often, their aspirations are disconnected with the competitive challenges of the business.

It would be great if so-called strategic plans actually had a STRATEGY in them. It is about the vision thing, and it is also about business discipline to diagnose the business issues, the processes in setting a series of choices and the scenario to taking action effectively. By striking the right balance, the strategic planning is gaining ground.



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