If you've ever enjoyed a good bowl of chili, or suffered through a bad one, you know that there are countless ways to make it. The one constant is a good recipe. The recipe provides direction on the ingredients and the instructions. In a similar way, the strategic planning process provides a good recipe for our business. It combines the ingredients (people, data and research) and the instructions (process, models and frameworks) to cook up a winning strategy.
Unfortunately, when it comes to strategic planning, the numbers can give us indigestion. Research out of Harvard Business School has shown that 85% of executive leadership teams spend less than one hour a month discussing strategy with 50% spending no time at all. In addition, a study by the Economist Intelligence Unit showed that only 11% of executives are highly satisfied with their organization's strategy development process.
The strategic planning process combines these benefits into the three focal points that feed success:
- Greater effectiveness-doing the right things.
- Greater efficiency-doing things right.
- Greater innovation-doing new things.
The importance of these benefits to an organization is enough to whet any good leader's appetite. In order to realize these benefits, there are four steps to running a successful strategic planning process:
- Identify the participants. Do you have representation from all of the key functional areas? Are you limiting the meeting to only senior executives or are you including some highly strategic middle managers as well? Research has shown that more than half (56%) of strategy workshops don't include any middle managers, potentially excluding the views of those closer to customers. Middle managers can hold the strategic keys to your future because they often act as the filter for which initiatives are brought to senior management and which never see the light of day. The strategy process is a dynamic forum for building the strategic thinking skills of these future senior leaders of the organization.
- Provide a Strategy Survey. In order to maximize time during the workshop, it's critical to have participants think through and capture relevant business intelligence beforehand. A tool such as the Strategy Survey provides a brief but comprehensive guide for managers to consider the most important pieces of the business. Research has shown that 45% of workshop participants spend less than half of a day preparing before the session. This lack of preparation prior to the workshop drains valuable face-to-face meeting time and is a result of poor planning. The Strategy Survey should surface information in five key areas: market, customers, competitors, company and the strategy itself.
- Prepare and focus the group with reading. Providing the group with one or two reasonable reading assignments (articles, book chapters, etc.) before the workshop educates the team on important concepts, tools and frameworks. Reading also focuses the team on the strategic perspective necessary for the workshop, helping them to elevate their thinking out of the day-to-day tactical operations that can choke off big-picture insights.
- Design the meeting framework. As a senior leader, your reputation is on the line when you put together a strategy process. Nothing can destroy the confidence a team has in their leader faster then a meeting with a vague agenda, rambling off-point discussions and a weak facilitator. A good facilitator has expertise in the strategy process, can identify the handful of models (out of the potential 40 or so) that are right for the business and can skillfully lead the group through the complex and non-linear path of strategic thinking. Many organizations use an external facilitator to neutralize political pressures, potential conflicts and competing priorities. An external facilitator can also challenge the group's homogenous thinking and fill the devil's advocate role necessary for change.
The most common reason for organizations turning out strategic plans that don't move the needle is the belief that strategic thinking and planning are the same thing. Strategic thinking is the generation of insights about a business while strategic planning then takes those insights and transforms them into an action plan to achieve goals and objectives.
Strategic thinking provides revelations in such areas as resource allocation, customer value drivers, market dynamics and activity systems. By continually working through models and enhancing skill sets like decision-making and problem solving, an organization's associates can transform an annual strategic planning process into thinking strategically on a daily basis.
The resulting strategic plan should include the key insights generated in the strategic thinking session and the goals, objectives, strategies, tactics and metrics that will drive daily activity. Creating a thick, three-ring binder plan that can also serve as a doorstop is not of value to anyone. Make sure that your strategic plan is concise enough to be used and updated on a daily-not annual-basis.
Brilliant strategy means nothing unless everyone in the organization understands it and it influences their daily activities. The following steps can be used to support the strategy rollout:
1. Development of strategy communication vehicles (presentations, maps, etc.)
2. Dissemination of the strategy through the chosen communication vehicles to all associates.
3. Collection and review of feedback regarding the strategy and its communication to the organization.
Properly done, the strategic planning process provides an effective and efficient means for educating, inspiring and preparing your management team to excel in their construction business. Improperly done, the strategy workshop wastes time, eats away at morale and creates doubt in a team's mind about the competency of their leader. Bon appétit!
Rich Horwath is an author, strategist and speaker who helps companies create competitive advantage through strategic thinking. He is the president of the Strategic Thinking Institute, a former Chief Strategy Officer and author of the book Deep Dive: The Proven Method for Building Strategy. Visit www.strategyskills.com to sign-up to receive your free copy of Strategic Thinker.