Nine Steps to a More Effective Process

Posted March 6, 2013

A good strategic planning process must resolve the biggest strategic issues that will affect future business performance. It’s one of the most important things top executives do, yet it’s often ineffective. Follow these steps to ensure an efficient and effective process for charting your company’s path forward.

Structure the project

1. Establish Goals

At the very beginning of the planning process it is critical to agree on and clearly state the strategic goals. While there is often initial agreement on what the measures are (such as revenue growth, profits and share price), tension between these goals may erupt when trade-offs are required. For example, is it acceptable to reduce net margins now to invest in revenue growth two to three years out? Do employees have to enthusiastically support the plan? Is it acceptable to stop serving certain customers?

2. Determine Key Questions

Narrowing the focus early to just a few top-priority questions keeps the team from wasting time and energy on lower-impact areas. Survey top executives to identify the biggest threats and opportunities, then prioritize. Questions might range from whether (or how) to enter a new market, whether to divest a division, how much to invest in a new technology, or whether to restructure the organization. Agree to focus the top three or four questions, and defer or delegate the other issues.

3. Choose Team Members

The secret here is to keep the team small, no more than 10 or 15 people. Small teams allow for more candid and effective discussion, keeping everyone on their toes and engaged. Typically the top “line” executives form the core of the team, but consider adding a few others. Who will be implementing the plan? Who knows “the customer” best? Who might be affected when resources are shifted from activities that were historically important toward a new priority for the future? Who has the best insights on competition? Who is most creative and most able to imagine a new future? Who knows the nuts and bolts of how things really get done? A small, high-level team that spans these unique knowledge domains will be most effective in creating a successful strategy.

4. Set Deadlines

Strategy focuses on the long-term; what you want to achieve, and how are you going to achieve it. As such, it often fails to generate a sense of urgency. Day-to-day emergencies and demands usually take precedence, and somehow, strategic planning gets put on the back burner. Consequently, effective strategic planning requires deadlines. Establish a series of meeting agendas and clear the dates on key players’ calendars. Once the deadlines are set, the adrenaline starts to flow and the team pulls together to set aside short-term demands and focus on the future.

Make strategic choices

5. Identify Options

Too often strategic thinking boils down to merely validating the current path, or making a go/no-go decision on a single course of action. A much better approach is to spend creative time up front to identify several alternatives. What is a totally different way of reaching our goals? What can we stop doing altogether? What can be increased, decreased, reversed, separated or bundled? What would we do if we had to reach the “finish line” in half the time? What totally new value can we offer the customer? Crafting two or three creative but realistic alternatives and evaluating them using clear criteria will yield a true strategic plan that creates a vision for the future, rather than a reflection of the past.

6. Gather Critical Facts

One thing every organization has is plenty of data. Mountains and mountains of data. Problem is, most of it just tends to muck up the works. Too often strategic planning starts off with a mad flurry to “gather facts” without any clear direction on how these facts will make a difference to the key decisions that must be made. This is not only inefficient, but disheartening, generating “all heat and no light.” It’s not enlightening, it’s not fun, and the impact is low. Things like customer and competitive analysis are clearly valuable, but they are much more valuable when clearly linked to evaluating options against defined criteria. Ruthlessly eliminate any data, analysis and fact-gathering that is not directly needed to make the key strategic questions you have chosen to focus on.

7. Decide, but Stay Flexible

Gain agreement on an answer to each strategic question. Decide on key action steps, accountability and timing, but also agree on how to monitor the environment for changes that might warrant modifications to the plan. Being prepared to exploit the unexpected is key to success, and that means agreeing explicitly on what constitutes preparedness, and how to recognize a new opportunity.

Implement

8. Take Immediate Action

How many times has a strategic planning process been wrapped up and conclusions drawn, but six months later, other priorities have taken precedence and the plan now sits on the shelf gathering dust? Put the decisions in writing and distribute to all relevant parties. Make a list of actions that can be taken right away, and charge the appropriate people to get started. Consider taking action that signals “No going back!” Sell a facility, acquire new capability, change the organizational structure, or make a bold public announcement. This bold break with the past can assure that the organization begins to move toward a new future.

9. Establish Measures of Success

Plans are useless without clearly understood, quantifiable measures of success. Lay out an implementation calendar, with specific milestones for each step. For example: “By June 1, 70% of sales reps will be trained on new product,” or “By March 15, achieve $1 million in revenues from new customers.” Assign clear accountability for each action, while making sure the needed resources are in place. Ensure that each employee knows their role in making the plan happen. Measure assiduously, communicate regularly (whether on target or not), and take action quickly if milestones are not met. And remember to celebrate wins along the way, whether big or small, in organization-wide and small team settings, recognizing both team and individual heroes.

Following these steps will make your strategic planning process more effective and rewarding, with better long-term results.

Amanda Setili is founder and managing partner of Setili & Associates, a firm that works with Fortune 500 companies to improve business performance. Her clients include The Home Depot, Delta Air Lines, Wachovia and The Coca-Cola Company, as well as growth companies. As an experienced thought partner, Setili & Associates helps clients leverage their distinct assets and capabilities to produce lasting competitive advantage, zeroing in on key actions that will improve profit, performance and growth.