Strategy

The simple truth about strategic planning

Most so-called strategic plans are little more than three-or five-year budgets but the core of any good strategy is the creation of a distinctive, compelling offer. At a recent meeting with the head of a large public company, I was shown a few of the templates needed to complete the annual strategic planning process. They covered planned sales and operational improvements, market share projections and financial data.

And this is the reality of most strategic plans ­– they have little to do with strategy. It would be more accurate to call them three or five-year budgets. The inclusion of a few initiatives to drive sales and improve operational efficiency doesn’t turn them into coherent strategies.

It’s no wonder that a survey conducted by McKinsey & Co. found an enormous amount of dissatisfaction among executives about their strategic planning process – they feel they’re wasting a lot of time and effort for little reward. And ultimately the process doesn’t deliver what they want: a clear roadmap for building a thriving business.

Why do so many companies fall short on this critical issue?

I think the reasons are twofold: the complexity involved in developing a good strategy, and failing to engage people in what should be a creative process.

It shouldn’t be this way.

Yes, some time does need to be spent on the dry, sometimes difficult, analysis of the industry, competitors and suppliers, but the core of any good strategy is the creation of a distinctive and compelling offer for the customers you’re trying to serve.

What’s not creative about finding a way to consistently and profitably deliver a distinctive and compelling combination of outcomes and experiences to a target group of customers in a way that’s not easy for your competitors to copy?

Coming up with a winning strategy that you can execute effectively is hard. That’s where the creativity comes in. Without it, you’re more than likely to fall into the same trap as most businesses – trying to be everything to everyone, and offering nothing different.

 


 

By Rory Deavin