Wednesday, May 30, 2007

Can I Fix My Strategic Plan?

Occasionally, I'll get a call from a team which has been doing strategic planning for a while on their own and are disappointed with the results. In most cases, they are just not getting value out of the time spent on the process. This is a shame, because good strategic planning usually yields excellent results for companies that approach the process with discipline.

There are a few questions I always ask, because they lead to some of the most common reasons why people have trouble with planning.

1. What strategic planning process did you use?
2. How many objectives did you set?
3. How are you tracking implementation?
4. Who did the planning?
5. Did you use an outside strategic planning facilitator?
6. How much time did you spend on the process?
7. How many market segments are you using?
8. Are you segregating your assumptions from facts?
9. How are you measuring the success of your plan?

In my next few posts, I'll discuss each of these questions, and the answers that are often warning signs that the planning process needs a major fix.

Tuesday, May 29, 2007

When should I do my strategic planning?

I get asked this question a lot in my seminars. There are three basic ways to time your strategic planning around your annual cycles. First, you can schedule your planning process so that it precedes the budget cycle. This is useful if you feel it's important to get the money for strategic projects into your budget. This means you will have to complete and review your action plans before starting your budgeting, but it has the advantage of giving you some pretty detailed information about the expected cost of new strategic projects.

The second way to schedule your strategic planning process is to do it just after your year end. The main advantage of this is to give you the most complete, accurate and up-to-date data on your company's strategic performance. If your financial data gives you key insights about what strategies are working well for you (and it should), this approach might give you the best information for your strategic planning. One possible disadvantage is that it might not allow for inclusion of the action plan expenditures into your budgets, requiring a second look at your budget at the end of the strategic planning process.

The third scheduling approach is to time your strategic planning for a low point in management activity for the year. The main advantage of this is that you won't overload your executive team with the additional burden of planning meetings and homework. For construction, this might be the Fall or Winter, while for schools this is most likely the summer.

All of these approaches have pros and cons, and - of course - there are hybrid approaches that combine these approaches to scheduling strategic planning. I'd suggest you try one and see how it works for your team, understanding that it's always possible to change the timing of your strategic planning in the future. And, of course, a short discussion with an experienced, qualified strategic planning consultant can really help you find the timing that is right for your organization.

Thursday, May 24, 2007

Strategic Planning - Should you go for the home run?

Every once in a while, when I'm doing strategic planning with a client, we hit a home run. It doesn't happen with every client, and it doesn't happen every year, but it does happen. A frequently asked question is "Should we try to get a home run?"

I have two very opposing views on this. The first is that swinging at home runs can be very distracting and, when you actually get a hit - it can be downright disastrous. One of my earliest home run stories tripled the size of the company in less than a year and brought their strategic planning to a halt. Within three years, the company - partly because they had stopped planning - had serious growing pains, including cash flow issues. The great "opportunity" they had found nearly killed the company! This is not as uncommon as you would think - there is a very real danger of growing your company to death. Also, let's not ignore the fact that, as in baseball, you are likely to have a lower batting average if you are always hitting for the fences.

On the other hand, while most of my success stories are about dependable, steady growth, there are quite a few that were explosive...and that can be the just thing to get a company out of a rut. Certainly, I'm proud of the home runs that worked out well, because they were built on sound strategic thinking and created sustainable competitive advantages.

So my basic answer is this: put most of your effort into your strategic competency, and the strong, steady growth that comes from that. Consider having a project with home run potential on a side burner, especially if it relates to your competency, but don't bet the farm on it. And...if it starts to take off, be very careful of how it will affect the viability of your company in the long term. Strategic planning is an excellent tool for assessing these kinds of situations, and if you are looking for explosive growth - or in the middle of it - you will be well rewarded if you take the time to do a good job of strategic planning.

Friday, May 18, 2007

If you are looking at consultants...

Remember, one of the most important concepts in strategy is focus.
Any strategic planning consultant who says "I do strategic planning and..." is not focused. They are just fooling around when it comes to strategic planning.
You wouldn't go to a brain surgeon who says "I do brain surgery and plastic surgery." So why work with someone who does something else, like marketing, operations or teambuilding consulting? Your company deserves the best, not an amateur.
Here are some useful questions for when you are choosing a consultant:

1. How many strategic plans did you work on last year? In the past 10 years?
2. What results do your clients get? Can I talk to them?
3. What else do you do besides strategic planning? Will you try to sell that to me?
4. How are you different from other people who do strategic planning?
5. Why do you think there is a fit between you and my company?
6. Do you work with my competitors? How do I know you won't share my data with them?

On that last question - you want to avoid consultants who work with your competitors. The worst strategy is the one that looks just like your competitors - and using the same consultant is a sure-fire way to get that.

Thursday, May 17, 2007

Strategic Planning - better implementation

I'm thinking of doing one of my future Hot Seat programs on the Four Pillars of Strategy Implementation. I think it would be an awesome program.

People who use any strategic planning model tell me that implementation is really the hard part for them. Yes, I make my living helping people come up with great strategies, but I recognize that I get to go home at the end of the meeting and the managers I work with have to actually put a lot of attention and time into turning those strategies into reality. I suspect that the time I spend on implementation - about 20-30% of the whole process - is one of the reasons my clients get such great results. Some clients tell me it feels a little weird the first time through, but after the first year, almost all of them are completely sold on my unusual approach.

One of the keys - and this is a valuable point for anyone concerned with strategy implementation - is that we pay a LOT of attention to the money involved in most of our projects, and very little attention is devoted to the time involved. This has always seemed backwards to me, because (in the hundreds of projects I've worked on) 95% of the projects that fail in execution do so because people at the top of the organization didn't spend enough time on the project.

So my idea for the Implementation Program is to lay out each company's objectives, action plans, and resource issues, and discuss those in depth, probing for areas where little changes can yield big results in effectiveness. I'm guessing there will be some really great stuff we can do in a program like that on three areas: (1) writing better objectives, (2) writing better action plans and (3) structuring the resource allocation process to yield more realistic commitments. This is just an idea, so I'd love to hear what you think about this!

I think any company who is doing strategic planning could leave the room with a much better implementation plan - maybe even people who are already working with me! If you are interested in this program, drop me a line. I haven't decided where to hold it yet - it might be anywhere in the world.

On that note, I still have a couple of days available when I'm in Europe in late June- early August - my plan is to spend most of that time in Switzerland, but I'd love a chance to do a Simplified Strategic Planning workshop for anyone who hasn't had a chance to see me for a while. Since my only European gig was in Norway last year, that's probably most of my readers in Europe. Drop me a line if you think some great strategic stimulus would be valuable to your company.

Sunday, May 13, 2007

Strategic Planning - the four pillars of implementation

At last week's Michigan State University Simplified Strategic Planning seminar, we had a great discussion about the four pillars of strategy implementation. These four things are the best practices held in common by all of the companies I've worked with who achieved 100% of their strategic objectives. They are:

1. Good objective setting
2. Well-written action plans
3. Good allocation of both time and financial resources
4. Routine monthly monitoring of action plan progress

Are you doing all of these things well? If implementation is an issue for you - as it is for most companies - you might want to think about how you can improve your effectiveness in these four areas.

Friday, May 04, 2007

Strategic Planning Implementation - The Dangers of Planning to Plan

One of the things I worry about in strategic planning is the tendency some people have to want to write action plans that result in plans. If something is big and complicated enough, it might require a plan to plan, but sometimes this is just a smokescreen for a bigger issue. Is the team avoiding making a decision for some reason? Is planning to plan a way to avoid conflict? Or is planning easier than the actual work involved in reaching the real objective? Make sure you address these questions squarely whenever you are confronted with an action plan step that starts with "Plan...".

Wednesday, May 02, 2007

Cash Flow - Is it Strategic?

Cash flow is both very strategic and very un-strategic. What I mean by this is, cash flow is the thing that kills most companies that go out of business. I've seen otherwise profitable companies driven to insolvency by poor cash flow management. So staying on top of your cash flow is definitely a strategic priority. But cash flow is also very, very tactical. It has very little to do with the reasons why most companies succeed, and often, cash flow goes down when a company makes good strategic moves. Watching cash flow has rarely led to good strategy - and in fact, companies that are too obsessed with cash flow may be driving away otherwise very profitable customers. So, watch your cash flow, yes - because it affects your survivability. But if the ship isn't sinking, remember to stay focused on moving forward.