Strategic Planning Fix #6 - How much time did you spend on the process?

It's possible to spend either too little or too much time on strategic planning. Strategy is what you use to steer your company, so it's worth spending the right amount of time on. Strategic Planning is not, however, a substitute for the things that actually make your company go.

Far too many companies do strategic planning as a 2-day retreat. I imagine this has been driven by well-meaning, but amateur, "facilitators" who see strategic planning as an easy way to sell a weekend gig in between their "more important" work. In my experience - which is considerable - you need three meetings for a good strategic planning process. Each of the meetings asks a different question:

1. Where are we?
2. Where do we want to go?
3. How will we get there?

Most people pretend you can just ask the middle question. Sadly, as in any navigation, if you don't know where you are, you can't really figure out the proper direction you should be going. Worse yet, in strategic planning, if your management team doesn't AGREE on where you are, they won't agree on your course. You'll save yourself a lot of headaches by having a meeting before you strategize, to figure out what you need to know and how to structure that information. If you skip that meeting, you will likely end up with poor strategy - or, at best, a poor discussion of your strategy.

The third meeting is just as important, because it's not enough just to have a strategic plan. You have to implement the plan, and the hundreds of plans we have completed have shown conclusively that an implementation framework (and a few other tricks we use) greatly increases the number of strategic objectives achieved. In other words, with an implementation plan, you will actually end up doing most of what's in your strategic plan. Without it, you are likely to achieve only 30% of your objectives.

The last comment I'll make on spending time on strategic planning is about spending too much time on planning. Your team has work to do, and planning is only a part of that work. Four or five meetings are not better than three, and if you try to do your planning in, say, an hour a week, you will never, ever get through the process. Almost everyone should allocate between four to seven days (that's 8 hour days) for their strategic planning process every cycle - and maybe another 10-20 hours for homework. That's it. If you need more time, you are probably attempting to implement your objectives inside your strategic planning meetings. While this is admirable, in some respects, it will ultimately sink your strategic planning. So make sure you set a practical, realistic schedule for strategic planning - and stick with it. Otherwise, it can eat you alive.

Naturally, a good, experienced strategic planning professional will tell you these things, and help you navigate all of the questions that come up about the strategic planning schedule.

Strategic Planning Fix #5 - Did you use an outside planning facilitator?

This is a question that I, of course, have some self-interest in, since I am an outside planning facilitator.

There are two important parts to this question, and they both lead to insights about how to improve your strategic planning.

First, should you use an outside strategic planning professional? Of course, I think the answer is yes, but not always. A professional planner (and by this, I mean someone who does NOT consult on other topics, such as marketing, team-building or manufacturing) can add a lot to your process by stimulating good strategic thinking and giving lots of examples of strategies that have worked at other companies. A planning professional can also take a lot of burden off of your team - by knowing what to do, when to do it, and how much time to spend on it. A highly experienced strategic planning professional will know exactly when to let a conversation run on and when to cut it short, in order to create a strong strategic plan with great support from your strategic planning team. When companies try to do this on their own, they inevitably have difficulties with discipline and buy-in, and worse, the person doing the planning has to divide his or her attention between the planning activity and the strategic content of the plan.

Here are the most common mistakes around the question of whether to use an outside strategic planning facilitator:

1. Not using a strategic planning professional when you need one
2. Using one when you don't need one
3. Using the wrong person

Most poorly written strategic plans that I've been asked to fix over the past twenty years have been the result of either #1 or #3.

Second, who should you use as a strategic planning facilitator? Obviously, an experienced professional who does nothing but strategic planning. Why? Because strategic planning is like surgery - yes, a doctor can do it, but if you need it, you probably want someone who does it over and over again. The difference between getting your strategy right and "pretty close" may only be one or two percent - but that can amount to millions of dollars over time for even a small company.

So what skills should you look for? Here is a list that I have found useful when hiring strategic planning professionals for my firm:

1. Strategic thinking skills
2. Team facilitation skills
3. Solid business understanding
4. The ability to absorb a large amount of information quickly
5. Strong personal integrity
6. Familiarity with a large number of different business models
7. Familiarity with the strategic planning process

Here are some skills which do NOT affect the quality of your plan (although I sometimes look for them when hiring):

1. Experience in your industry
2. Familiarity with the latest buzzwords
3. Sales ability
4. Certifications of any sort
5. Public speaking ability

Hopefully, these comments will help you understand the need for a strategic planning professional, and how to pick a good one.

Strategic Planning Fix #4 - Who Did Your Strategic Planning?

The problems that come from having the wrong people do your strategic planning are sometimes harder to spot. A plan that has glaring omissions of data or perspective, a plan with poor management team support, and a plan that looks like the CEO wrote it by himself (or herself) are all examples of a plan that may have been created by the wrong people.

So - who should do your strategic planning? Ideally, the strategic planning process should be undertaken by a strategic planning team made up of the CEO and his or her direct reports. In a perfect world, this would be a team of 6-8 people who have intimate knowledge of all the different facets of your business - markets, operations, and financial issues. This group must also have the ability to implement the plan through their day-to-day involvement with the operation of your business. This means that the primary strategic decision making role should go to the people with the primary strategy implementation responsibilities. NOT the board of directors, NOT outside suppliers or union representatives, NOT customer representatives, and NOT a consultant. There are roles for all of these people in your planning process, but the decisions need to be made by the people who will actually have to carry them out. A really good strategic planning consultant, for example, will coach your team through the process in a way that saves them time and stimulates them to better strategic thinking. But by no means should such an outside actually set your strategic for you!

The key idea here is that there are two critical things required for a good plan to work: one is input from the right people, and the other is commitment from the right people. Involving the right people in your strategic planning process will get you both.

Strategic Planning Fix #3 - How Do You Track Your Implementation?

Most people who claim to do strategic planning really fall down on this one. If you are ever in a position to interview someone who claims to be a strategist, make sure you ask them what percent of strategic objectives are met by their average client. Half will choke on this question, because they don't track it (and how can you optimize something you don't track?).

The cold, hard fact about strategic planning is that it isn't over when the strategic planning meeting is over (and the consultant goes home). Strategic planning is NEVER done - it is part of a cycle of activity that should be changing your company in significant, noticeable ways over time. If you are doing strategic planning and you are not seeing noticeable change, it's probably because you have no mechanism for tracking.

In Simplified Strategic Planning, we tell people to review progress on strategic objectives by writing action plans for them with monthly milestones - and then track progress on those milestones with a mandatory monthly review meeting. This meeting takes a couple of hours most months, and is well worth the time. There are two key benefits you get from this: (1) It puts accountability into the implementation plan and (2) It gives you the ability to correct your course in mid-year when reality doesn't match your plans.

In my experience, of the hundreds of companies I've done strategic planning with over the years, the top 10% ALL do a monthly monitoring meeting and the NONE of the bottom 10% do a monthly monitoring meeting. When you consider that the top 10% in my database averaged 40% per year profit improvements over 5 years, you can see why I strongly recommend this approach!

Strategic Planning Fix #2 - Set the Right Number of Objectives

I've given this advice so many times since I started coaching strategic planning teams in 1981. Let's say your team can achieve 10 good-sized strategic objectives in the next 12 months. What will happen if you give yourselves a "stretch goal" and try to do 20? In my experience - almost nothing will happen. Your team, which would find 10 good objectives challenging and productive, will be lucky to get halfway done with each of the 20. At the end of the year, you will have a typically poor showing in the execution department and your team will have just a little less faith in the strategic planning process as a whole.

A good rule of thumb for objective setting is to have no more objectives than you have effective team members. For many companies, this puts the limit somewhere in the 5-10 range. Most companies I've worked with in the past five years have done very well with six objectives.

Strategic Planning Fix #1 - What Process Did You Use?

This is the first question I ask anyone who asks me if I can help fix their strategic planning. The reason is simple - every process has strengths and weaknesses, and the issues you are having with your strategic planning may well be the direct result of the process you chose to use.

Surprisingly, a common answer to this question is "We didn't really use a process" or "We read a couple of books and came up with our own process". Obviously, both of these can lead to problems. There are inevitable pitfalls in process design in strategic planning, and no process, or a mishmash of elements from several processes, can get you into those pitfalls quickly. So my first point is use a strategic planning process! Ideally, you want to use a process that's been tested and refined through use in thousands of companies in many different industries over the past 25 years, with a proven track record. Anything else is probably a mishmash of other processes put together by an inexpert strategist who wants to get into the business, and just as likely to lead to problems. Your best bet, of course, is a program like Simplified Strategic Planning, which is the most popular strategic planning model in use today.

The second point I want to make is that many processes that people use for strategic planning leave huge gaps where there should be data, analysis and documentation. My favorite example is Balanced Scorecard, which is an blown-up version of the Measures of Performance we started using in 1981. It's not a complete planning process - it's just a part of the process - and yet many companies treat Balanced Scorecard as their main strategy effort. That's like trying to drive from New York to LA by watching the speedometer and gas gauge - but not a map. Sure, you'll make good time...but where the heck will you be going?

The most common gap I find in other people's planning processes is implementation. Be sure to ask about how a process handles this, because implementation is the most common issue with strategic planning among attendees at our Simplified Strategic Planning seminar.