Right in the middle of the current economic downturn, The Wall Street Journal ran a story that said the recession wasn’t just hurting businesses, it was killing strategic plans. The Journal reported that executives were increasingly finding that, in these turbulent times, the forecasts that underpinned their long-term plans were faulty, thus turning their plans into useless pieces of paper. A consultant from another firm even told the Journal, “Strategy, as we knew it, is dead.”
Two years have passed since then, but the way we see it, strategy is not dead — but it is different. That’s because predicting the future, as traditional strategic planning has required, is a pipe dream.
Indeed, the ultimate failure of traditional planning — one that charts a course from Point A to a Point B many years in the future — is that it doesn’t account for how individuals, firms, governments, and institutions interact, react, and adapt to each other and to the changing environment.
Our advice: Don’t create a strategic plan. Rather, build a strategic frame; a ship of business, if you will. A frame that can adapt to constantly shifting seas, can overcome threats, and chart a quicker, more innovative course whenever possible. This ship’s frame will be aligned around your company’s purpose and ambition, its stakeholder commitments, strategic assets, and guiding beliefs.
Within that flexible frame, you can set out on long journeys from Point A to Point B, but you can make course corrections when needed without having to abandon ship and start all over with a new, rigid strategic plan.
To build that ship, your business should be able to answer the following questions:
- Corporate Direction - What is our collective ambition? What are our objectives over the next year, five years, ten years, or beyond?
- Definition of Success - How will we measure the achievement of our ambition? By sales growth? By brand reputation? By global reach? By improving our infrastructure? By all that and more?
- Enterprise Stakeholders - Besides our customers, who are our stakeholders, and what does our strategic plan promise them? What promises are so core to our enterprise that we would be willing retreat from our ambitions in order to keep the promise?
- Corporate Values - What promises to our stakeholders are we unwilling to compromise?
- The Competitive Environment - Who do we compete with? What do we assume it will take to get ahead of the competition? What’s the mainsail of our ship of business — the primary competitive advantage we will leverage to achieve long-term advantage in the marketplace?
- Our Guiding Beliefs - Which beliefs that we hold about our market conditions are the most crucial to our enterprise purpose and ambition? And, how much risk and opportunity is associated with betting our future on any of our beliefs? Which beliefs are we placing our bets on?
- Strategic Assets - What are our assets from intellectual property, capital to the “secret sauce?" Which one of these assets is unique to us and has high value to the customer and therefore forms our competitive weapons?
To read other blogs by Insigniam consultants see Enterprise Transformation Results and Insigniam Innovation.