Lots of executives, small business owners, and managers talk about the importance of strategic planning. But usually, that’s a terrible, terrible idea.
Let’s get really clear, really quickly:
- Yes, you should definitely plan ahead.
- Yes, you should think strategically.
- But, you’re probably so bad at day-to-day operations that strategic planning is a bad idea.
- And even if you’ve done “strategic planning” in the past, it likely had no effect.
Yeah, brutal stuff. So what gives?
A piece from the SmartDraw Blog includes two choice quotes:
Most businesses don’t do any strategic planning. And, of the ones who do, most treat it as nothing more than an academic exercise.
If you’ve got a document on a shelf somewhere that was written after an enormous number of meetings but never cracked again, this is all too familiar.
The post also notes:
Strategy requires much more than extrapolating a budget. It requires an open, honest examination of the toughest issues the organization faces. Tough questions have to be asked. Warts may need to be exposed. This can be difficult. It can be uncomfortable. It requires leadership and decision-making. It may require risk. That takes guts.
This is also antithetical to many organizations. Being open and honest is only possible if people are more committed to the truth and their ethics than they are to their jobs. Finding problems means admitting weakness. And lastly, it’s not like being decisive is all that common.
Time for some more attacks on strategic planning. Bain Capital explains that 97% of strategic planning is a waste for eight reasons. Here are three especially good ones:
1. They don’t really focus on strategy. Most of these processes have become conversations about budgets and resource allocation, not strategy
4. They don’t connect strategy to frontline routines or behaviors. The planning process is typically a long, drawn-out conversation among staff members.
7. They end up becoming numbers-driven abstractions. To be very clear, there is nothing wrong with numbers; good strategies must be tied directly to financial outcomes. But if strategic planning doesn’t talk about strategy, if it doesn’t allocate resources effectively, if it doesn’t connect to the front line or integrate decisions on talent, then what is it?
I’m not even going to quote from the Harvard Business Review piece The Big Lie of Strategic Planning. Because really, you should click on that link and just read the whole thing.
Unless Your Tactics Are Amazing, You’re Not Ready for Strategy
We’ll get to definitions in a minute. Strategy is large-scale, tactics are small-scale. Is your company absolutely killing it with everyday tasks? Do you deliver consistent, high-quality goods and services every time? Are you measuring your activity and making constant adjustments? Are routine tasks well-defined and sufficiently documented? Does every team member know what they are supposed to be doing at all times?
Probably not. And if not, that’s where you should focus first.
Being Good at Operations Doesn’t Mean You’re Good at Planning
Doing something you’ve done before a dozen or a hundred times is expertise. Preparing to do something which is likely going to have new or unexpected elements is planning. It’s difficult to plan well. Your predictions are likely to be wrong; sometimes wildly so. By definition, you won’t have accounted for possibilities that you failed to anticipate.
And if you’re actually pretty good at planning?
You Probably Don’t Know What “Strategy” Is Anyway
Here’s a great definition from Harvard professor Michael D. Watkins with some emphasis added:
A business strategy is a set of guiding principles that, when communicated and adopted in the organization, generates a desired pattern of decision making
In short: strategy is not “what we’re going to do” but “how we intend to think.” That means a strategic plan is really more about finding a way to get everyone to make the same kinds of decisions given a particular set of circumstances.
Which isn’t what you were thinking, right? And that’s why you probably shouldn’t be doing any strategic planning. Instead, you likely need to figure out why there are four emails and two phone calls for absolutely typical customer requests.
Yes, Tactics Are Hard
If you’ve ever struggled to keep a house clean, you know that normal, everyday stuff can be extremely challenging. A business is supposed to deliver to customers over and over again, virtually without fail. Until you’re able to do the fundamentals exceptional well, there’s no need to discuss strategic planning.
So…I guess it’s back to work now, right?