5 Reasons Strategic Planning Matters
Abraham Lincoln said, “”Give me 6 hours to chop down a tree and I’ll spend the first 4 hours sharpening the axe.”
When Lincoln is quoted, we listen.
Obviously our 16th President was a planner and you should be too. Strategic planning is one of the most important capabilities there is and yet many organizations struggle with just how to do it. Worse yet, a few executives view it as an annual activity that doesn’t really matter. They put their best and brightest leaders in a room, review their Mission, Vision and Values, do a quick SWOT analysis say a few words and call it a day.
Here are 5 reasons why strategic planning matters if done properly:
- It forces you to stay in tune with your industry.
- It allows you to review progress towards your goals.
- It keeps the most important activity front and center.
- It keeps you objective.
- It creates a healthy dialogue for change.
Let’s take a look at each of these in a little more detail.
Forces you to stay in tune with your industry
In this digital age, all industries are being transformed. Examples abound from Amazon.com (remember Borders?) to Uber to Netflix to Airbnb.com. Those industries were all pretty mature and were completely upset by brand new business models that were originally dismissed but eventually become THE new way to do business.
One step in proper strategic planning is looking outside your walls at what’s happening within your industry. By doing this you gain extremely valuable insight into what’s changing, and thus, what you need to change.
“If you don’t know where you’re going, any road will get you there.” – Lewis Carol, author of Alice in Wonderland
Review progress towards your goals
Some of you might say “what goals?” If this is the case, you need to stop reading and call me right now! My number is 608-335-0920. Lewis Carol, famed author of Alice in Wonderland said, “If you don’t know where you’re going, any road will get you there.” Goal setting has been suggested to be the single most important activity a business does.
Once you have your goals, strategic planning forces you to review your progress towards them. Are you on track? Do the goals need to change as business conditions have changed? What actions do you need to take to adapt to those changes? These are all important questions that reviewing progress towards goals will prompt.
Keeps the most important activity front and center
All businesses have lots and lots of activities that are important, sometimes too many. When everything becomes important then nothing is important. Strategic planning filters out all the activities and distills them down to the “critical few”. You might have just 1 or you might have a few more but you should be very, very focused to make sure you have no more than 7. Two or three is even better!
Imagine you work in a business that literally has written down 46 goals that are important for you to accomplish. Now imagine a business that has written but a SINGLE goal for you to accomplish. Which one do you believe you can be successful in? Obviously the later and through good strategic planning you’ll determine which goal(s) is the single most important one.
Keeps you objective
We’re all biased. We have our pet projects and stuff we’d like to see get done for a variety of reasons. Sometimes it’s because you have variable pay attached to accomplishments, sometimes it’s because you just like doing one thing over another. Whatever the case it’s hard to be objective in the day-to-day grind that can be work.
When performed well, strategic planning is performed with key players (i.e. executives and business unit leaders for example), includes open and honest dialogue and invites healthy debate. This is a recipe for objectivity and objectivity is what you need to defeat bias and develop truly meaningful goals.
Healthy dialogue for change
Dialogue is the foundation for successful strategic planning. Strategic plans from 1 year to another almost always change in some way and the best avenue for the right changes is through conversation and pushback. I’ve found sometimes groups aren’t comfortable pushing back on an idea. In one group I worked with, the CEO would say “pushback now if you disagree…” and then make a statement. This was a group of about 10-12 VP-level leaders or higher and yet very few times would anyone ever push back. As I’d look around the room I could tell some leaders didn’t agree and yet they never said anything at all.
There were probably many reasons for this, but in any case this is not a healthy dialogue and won’t create meaningful change! You get much better results when pushback is invited and received. One tip: debate about the issues, not with the people. Sometimes debate can be taken personally but if you remember to stay focused on the issues and not the individuals you can avoid the taking it personal trap.
Many people think when engaging a strategic planning consultant that you share with them your goals and the consultant gives you the answers. Not true! In fact a good strategic planning consultant leads you through a process where you discover your own answers, pushing you to expand your view of your world, narrow your focus, and stay objective along the way.