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Jensen Consulting Blog

May 2012

May 24, 2012
Written By: Pete Petersen

Strategic planning seems to get a bad rap from many business leaders, often being perceived by them as having low value even though they feel it is important. Just ask a few leaders about their thoughts on strategic planning and here is what you may hear:

  • We do a plan and end up with a to do list, but the plan ends up on the shelf collecting dust. Nobody does anything with it.
  • We did one five years ago; it’s probably time to do it again but I just can’t get people to talk about strategy.
  • Our planning process is boring and time consuming. We spend countless hours talking about vision and mission; and then discuss the same problems over and over again.

Strategic planning doesn’t need to be like this. We work with an ever increasing number of leaders that view the planning process as critical to their businesses performance, growth and financial success. And the businesses that do it well have strong competitive advantages in the market. Based on our 25+ years of developing and implementing business strategies we have determined that:

  1. Strategic planning creates high value for businesses if done right.
  2. Most companies don’t do it right.

Let’s take a look at the value that strategic planning brings to a business. The core reason for strategic planning is simply to improve the business’s ability to compete, which translates into improved growth, profitability and longevity.  Certainly there are other benefits to the process including aligning the leadership team’s thinking, getting employee buy in and just taking the time to work on the business versus working in the business. But being able to effectively compete in the future is what it’s all about.

Unfortunately without a regular disciplined process these important discussions frequently don’t happen. So instead of leadership actively planning for the future they simply react to competitive changes, try lots of different things, watch their competitive advantages erode, see growth come to a halt and lose key people who become frustrated with an uncertain future.

We know that effective strategic planning doesn’t happen in two eight hour days with fifteen people at the local hotel each giving a presentation. And it doesn’t work by filling in the blanks of a plan in a box format or by developing long winded vision and mission statements.

Our experience tells us that high value strategic planning includes:

The right people participating including key decision makers, those leaders who are going to drive the company’s future success and perhaps a company outsider who can ask hard questions and help the group maintain perspective. We know that having the wrong people or too many people in the room make productive discussions difficult.

The right discussion topics which include competitive changes, customer demand, core business strengths to build on, competitive advantages, difficult issues facing the business and obstacles getting in the way, assumptions the company is building on, growth opportunities and risks. Of these topics clearly defining the real challenges facing the business and ensuing obstacles is often the most difficult discussion.

Challenging discussions involving everyone at the table that candidly take on the difficult issues without fear of reprisal. Without a doubt this is often the toughest part of the process and frequently won’t happen without an outside facilitator.

Focused direction which includes a few important crystal clear plans and objectives that if accomplished through a few equally clear measurable actions will address the difficult issues and obstacles facing the business, and lead to a number of favorable outcomes. It means saying no to a wide range of possible directions and yes to a few. This is not the place for generalities, minutia or fluffy language.

Execution and disciplined follow up must be an inherent part of the entire process. If these are not built into the plan there essentially is no plan. We have found that regular gap analysis discussions led by those who are responsible for execution work very effectively for following up, but it takes a demanding and disciplined leader to make this happen.

The strategic planning process does not have to be an exercise in futility. Getting the right people at the table, having challenging discussions on the right topics, maintaining focus and executing rigorously will dramatically improve the process and improve the odds that a company can win in an increasing competitive marketplace.

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