Why engage in strategic planning? Many successful companies have achieved their success without a strategic plan. Others have engaged in strategic planning only to have the resulting plan encased in a binder and placed on a shelf to gather dust. (We call these plans vinyl trophies or strategic bookends.) So why bother?
I posed this question to Dr. Steve Barone, president and founder of Transformation Systems Ltd., a firm specializing in strategic planning for national and international organizations. His answer was simple: “The principal reason to do strategic planning is because you believe your company will be in business in the future.”
Barone believes planning is simply preparing for the future. “You really only have three options. You can wait to see what the future will bring and try to respond to it. You can guess what the future will hold and prepare for that. Or, you can create your own future by imagining what you want the future to be and plan for it.”
Most companies opt for the wait-and-see approach. They do so either because they are unable to imagine the future or because they believe their organization will react sufficiently when it comes. Unfortunately, organizations that wait are forever on the opposite side of the leading edge—they exist on the “bleeding edge” and typically fail to position themselves to take advantage of new or evolving opportunities. Companies that find themselves unable or slow to respond risk losing loyal customers to industry competitors.
Those that guess are not much better off. “It’s like playing a game of craps,” says Barone. “The house always wins. The odds are never really 50-50. You may win a few. But if all you have is a guess, in the end the house will win and you will lose.” As for those who rely on their “gut,” intuition is really just an informed guess and shares the same poor odds. Sure, guesses may have worked in the past and could work in the future—they are just less likely to do so.
Those companies that choose the path of planning have a fundamental belief that the future is coming and there is something they can do to influence the outcome. A comprehensive 10-year study of successful companies titled “What Really Works” and published in the Harvard Business Review revealed the factors that differentiate successful companies from their peers are leadership and strategic planning. Without exception, companies that outperformed their industry peers excelled at what the authors call the four primary management practices—strategy, execution, culture and structure, according to the study.
In its truest form, planning is simply a process of envisioning the future and declaring what you want to be. It doesn’t require an MBA; it requires imagination. It is an acknowledgment that what got you to where you are today may not be what will get you where you need to be in the future. It’s a lesson that many promotional products companies grapple with today.
In working with one PPAI member company, we asked a simple question, “What do you imagine you will be doing five years from now?” It was a tough question. This 20-year old distributorship had evolved from the print forms and labels industry and was now heavily into promotional products. Their answer was honest: “We don’t know. We couldn’t have imagined that we would be in promotional products five years ago, and yet here we are. How do we know what we will be doing in five years?”
This is where the strategic thinking comes in—maybe you don’t know what technology you will be using or what actual products you will be selling, but do you know what your clients will be saying about you? When faced with this question, the PPAI member said, “Well, whatever we’re into, I imagine we will be helping our clients promote their image, reputation and services.” From this came the vision that they would be solutions providers to help clients promote themselves in any avenue and way they require.
This vision is miles away from printing forms or providing promotional apparel—it requires the company to remain abreast of new technology, multi-channel advertising and promotional avenues to enable them to present themselves as true solutions partners. They would not have reached this point had they not gone through the strategic planning exercise.
To those companies who think they are too small to do strategic planning, I would only point to the fact that most career coaching is, in its truest form, strategic planning on an individual level. Even a sole proprietor can strategically plan what industry she will be in, what revenues she would like, what niche she would like to occupy and how she might get there. What it requires is imagination, a dedication of time and space, and possibly a little facilitation.
And what about all those vinyl trophies gathering dust on corporate bookshelves across the country? Planning failures tend not to be the result of poor planning. Instead they are usually the result of poor implementation. Barone says planning is not for the faint of heart—it requires bold, brave leadership. “To implement something new requires doing something new. Unfortunately, old habits and pre-existing behaviors usually trump new ones.”
Leaders at all levels of the organization (formal and informal) need to be dedicated to executing and sticking to the plan. Small steps are fine. But retreating to old habits will ensure a planning failure.
So, are there any guarantees that planning will bring success? Unfortunately, no. But armed with a plan, a dose of courage and a dedication to implementation, the odds favor planning over guessing or waiting by a large margin.
Claudia St. John is president of Affinity HR Group, LLC, a full-service consulting team specializing in all facets of human resources, management and strategic workforce planning. Learn more about this PPAI Business Partner at www.ppai.org/members/business-partners.