Most organizations should stop strategic planning.
Why? Because the time most organizations spend on creating strategic plans ends up as wasted. It is a lot of time and emotional investment that results in very little new value.
Understanding your organizational priorities, and a strategic relationship with the world around you, is good management. But I’ve rarely seen a strategic plan that can create that understanding.
For most organizations, strategic planning consists of locking your decision-makers in a room for one or two days, with bad coffee, rationalizing why most of last year’s targets weren’t hit, and writing a new plan not much different from the last one. Why does this go so wrong? What happened? Why does so much “strategic” planning create so little value?
Why It Doesn’t Work
It isn’t strategy
If you aren’t talking about transformations to the way you are approaching your market, your engines of growth, or your business model itself, it isn’t strategy. Selling more of something, for example, by lowering its price or increasing distribution (both changes in scale) isn’t strategy. It’s tactics. If what we are doing is planning for strategic change, it’s going to take more than a weekend. It takes months. Organizations that do this right are often in a prepare-plan-execute-monitor cycle that lasts the whole year.
We don’t “connect blue sky to pavement”
Real strategic change usually requires a complete rethink of the operational framework of the organization. Roles, resources, priorities, processes … But we rarely get deeper than assigning arbitrary roles and timelines.
We don’t build learning loops
To paraphrase the brilliant Prussian general Helmuth von Moltke: All plans fail at the first moment of contact with the enemy. The plan matters, but it is the learn-and-adapt loops supporting that plan that ensure its success.
How quickly did we realize we were no longer on track? How reliably can we identify why we are off track? When we get a countermeasure into place, how quickly and reliably can we know it is working? The answer, for most organizations is: Too late, too inaccurately, and too slowly.
How do we get ourselves past the terminally disappointing strategic plan? Strategic management. We have to change our relationship to planning. We have to realize that most of our planning isn’t strategic. It’s tactical, and it isn’t the end or the beginning of anything. It is just one point in the discipline of strategic management.
Here’s the (Real) Plan
First, decide if we are talking strategy or tactics. Are we planning for linear growth or transformation? If the latter, plan for the two- to five-year journey that real transformation requires. Work with your team to research how the market, human, financial, systems, and process pieces will all fit together. This requires a strategic plan to capture it all and drive an execution road map. And it will take you up to a year.
If you are not planning on a disruptive transformation, forget the strategic plan.
Instead, do this: implement strategic management that supports effective tactical and operational planning. If you are going to grow or scale what you already have, and who you already are, this is the route to take.
Does all of this mean we shouldn’t plan? Absolutely not. Strategic management uses a plan to confirm direction, alignment and accountability. But the focus is on execution, traction, and progress through learning loops.
In this framework, the plan has results and key objectives (RKOs if you like acronyms) that create the guiding star for our efforts. As long as these RKOs meet old-school SMART (specific, measurable, assignable, realistic and time-bound) conditions, no need to overthink it; you are off to the operational races.
That’s when strategic management kicks in: at the races. Strategic management has three hallmarks:
It uses a plan as its North Star.
It focuses on disciplined, consistent execution.
It requires feedback (data) and learning as its primary tools.
The Execution Part
Strategic management exhibits three qualities as it executes a plan:
1 – It values the plan
Not slavishly, but as a source of direction and accountability. No matter what we do at any point in the organization, we should be able to trace the bread crumb trail of those activities back to the plan. Why are we doing it this way? Why are we spending this money? Why are we turning down that opportunity? Because it doesn’t align with the plan. No matter how distractingly attractive it might be, we give it the side-eye.
2 – It values culture
“Culture eats strategy for breakfast,” writes Peter Drucker. Why do most plans, including strategic plans, stumble? Because the culture isn’t up to supporting them. Every single point of a plan, down to the periods in the sentences, is the product and responsibility of an organizational culture and the humans that are in it. Strategic management focuses on this connection.
3 – It values feedback and learning
The strategic or tactical plan sets out the compass heading. As we move forward, unforeseen obstacles, setbacks and changes arise. Effective strategic management asks us to do two things in these moments.
The first is to establish a continuous stream of feedback. The more current, comprehensive and accurate the information we have about what is “really going on,” the greater the likelihood of reducing the cost of setbacks, if not eliminating them outright.
The second is to value learning. We need the humility and the systems to live within this aspiration. And failure must be an option. We must have processes in place to learn from setbacks. In strategic management, the observe-analyze-act loop transforms failure into learning. We use data to identify departure from the plan, seek to understand the root cause, correct and monitor the results.
Strategic management is management in which the purpose and direction set out in a plan is fused with an approach that integrates that purpose with our culture, through feedback-driven execution.
Strategic management creates results because it is a continual engagement with reality; continually aligning and realigning its powerful internal compass (the plan) with reality through the power of integrating culture, data, and learning.
The outcome is that instead of a document we make excuses for at the end of the year, we celebrate progress, learning, and success at the end of every day.
Clemens Rettich is an organizational consultant. He supports organizations and leaders in growth, change, and transition. Clemens has spent 25 years practising the art of management.