Simplifying Strategic Planning With The Right Questions, Outlook

Developing strategy and strategic plans, for a business or an organization, can be intimidating with their connotations of big ideas, perfect foresight and complete understanding of the complexities underlying an operation. A column from Roger L. Martin at the University of Toronto’s Rotman School of Management simplifies the process, breaking it down into five specific choices.

Strategy is a set of five choices that must be made—What is our winning aspiration? Where will we play? How will we win? What capabilities must be in place? What management systems are required?

Martin says, “You don’t need a 100-page strategic plan. In fact, there is no good reason why your strategy can’t be written on one page. No amount of number crunching and forecasting will help if you don’t make these five choices. Only by making them will customers find themselves compelled to give you their money; and if they don’t do that, you’ve got nothing.”

While the process is straightforward, Martin does caution that in answering the five points, if the opposite of that answer is fundamentally stupid, you haven’t actually made a choice. He says, “For instance, if your choice is to be customer-centric, the opposite of that would be to ignore customers entirely—which is unquestionably stupid. All you’ve really done is made a choice to be non-stupid, and that is never a useful strategy choice. However, if you say, ‘We are going to define customer service in a new way that is entirely different from our competitors, because we believe that an important segment of customers cares very much about that’—that is a real choice.”

The strategy in Martin’s outlook is not about being perfect: it’s about being better in the future, which will never be the same as in the past. “You’ve got to combine analytical rigor with creativity to get to the best possible answer.”

Speaking of analysis, Martin says that strategic logic must be explicit. Rather than asking, “What is most true?” ask “What would have to be true about the world in order for this to be a great idea?” While analysis is the application of facts and data, and it is part of strategy, strategy is also about testing the underlying logic.

Martin’s full column, “The Big Lies of Strategy,” can be read here.

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