Strategic planning is hard, but everyone thinks they can do it themselves.
STRATEGY SHOULD BE EASY...
On the surface, developing a strategy is simple. Here is a 5-step recipe from Peep Laja:
IMPORTANT: Don't confuse obstacles with symptoms . Examples of symptoms are "our customer turnover is high" or "we have a slow rate of growth". A leadership team's job is to figure out the obstacle that is resulting in these symptoms. What's really blocking your growth?
...BUT CHOOSING THE RIGHT STRATEGY IS HARD
The reality is that each step is so hard to get right in practice. How do you pick from an infinite number of possible future states? On what time horizon? Are you being honest about the gaps and obstacles you face? Do you have the right market data to make informed decisions? And even if you pick the right future state, will you be able to attain it in time?
Add to this: the bigger the company, the more people are involved in shaping the strategy. People with very diverse and conflicting points of view. Of course, the more diverse input you get, the more chances that somewhere in all those opinions lies a winning strategy. But cutting through the noise is key.
THE 4 MOST COMMON STRATEGIES THAT ACTUALLY AREN'T STRATEGIES
From Many Strategies Fail Because They're Actually Not Strategies:
1. Many so-called strategies are in fact just goals. For example:
“We want to be #1 in all the markets in which we operate."
This doesn't tell you what you are going to do. All it does is tell you what you hope the outcome will be. But you’ll still need a strategy to achieve it.
2. Lack of Coherence
Other so-called strategies are just a smattering of priorities and choices, but together they do not form a COHERENT strategy.
We want to increase operational efficiency; we will target Europe, the Middle East, and Africa; and we will divest our legacy business."
Taken individually, these may be excellent decisions and priorities. But there is no link between them. Together, they do not form a strategy. Lack of coherence is really common and the most frustrating for staff.
3. Nothing was de-prioritized. The strategy is just "do more" of everything.
But the authority on MBA-level strategy Michael Porter says "The essence of strategy is choosing what NOT to do."
4. Nothing controversial. It's too vanilla.
Either you haven't been ambitious enough, or you haven't really gotten to the heart of making hard choices to go all-in.
More often than not, you find all of these problems at once!
Now as the Single-Threaded Leader, you are tasked with delivering the strategy. No matter how much focus and dedication, you won't be able to produce the results unless it's sound. If you're the one tasked with delivering, then you should have a hand in shaping the strategy. Here is the value you can bring.
ILLUSTRATE THE FUTURE STATE
While traditional strategy is full of corporate vision and mission statements that are groan-inducing in today's day-and-age, Amazon advocates making the future state come to life by literally illustrating what it will look like when you have succeeded.
Document a press release.
Write a FAQ.
Write a customer testimonial imagining what the customer would say about the success they've had with your company and why.
This gives the team, stakeholders and the market a common, detailed and exciting vision of where we're heading. It also is a credibility test: does this actually sound like the customer's words? Does it sound achievable? If so, start to work backwards on how to make the future state a reality.
IN THE FUTURE STATE, WHY ARE CUSTOMERS SO HAPPY?
It's common to start with a future state expressed in terms of revenue, profit, or the release of a key product. But none of that would be possible without customers.
Instead, start from the future state of your customers. In the words of Y-Combinator founder Paul Graham, what would deliver an "insanely great experience?" Why is the customer more successful than they were before? Develop a list of Customer Experience possibilities, then look at how your current SWOT plays into them.
INSTEAD OF YOUR OPINION, BRING DATA
Pragmatic Marketing's slogan for many years was "Your opinion, while interesting, is irrelevant." I have one of their mugs with this emblazoned slogan that I still drink from today. When shaping strategy, everyone has an opinion, but what does the data say?
As the person that will deliver some key initiative, be several steps ahead by understanding the business landscape and bringing that perspective to leadership. What are the market trends, what do customers say, what are competitors doing?
CREATE A DETAILED PLAN THAT CAN DELIVER THE FUTURE STATE
This is often the greatest value the single-threaded owner can bring to the strategic table. For political reasons you may never get more than a goal assigned to you by senior management and then be told to "get it done", however you must develop "how" with their team, engaging senior management along the way.
If the plan is well-founded, it will often challenge and refine the strategy to make it more targeted and real. It will highlight what a realistic, refined future state might be. It will surface that the real obstacles are. Instead of "#1 in a new market", the goal might become "Capture 50% share in market segment X and Y within 1 year, and here's how..."
Your plan should also surface any lack of coherence between the initiative, the plan, and the rest of the company, and keep pushing to resolve these with leadership. This is vital both for communicating and engaging the organization, and making sure there ae no conflicts between competing priorities on the list.
PRIORITIZE (AND DE-PRIORITIZE)
Michael Porter famously says "The essence of strategy is choosing what NOT to do."
I worked for a VP who loved music. He had a great analogy for what Porter is saying. Think of all the possible things you could do within your strategy. New customers, new markets, new technologies, new features, new geographies, new services, etc. You can't do it all, of course. Now visualize each one like knobs on a massive equalizer on your sound system. Which knobs are you dialing way up and which knobs are you dialing down? Note that music does not sound very good when all your equalizer levels are mid-range!
Often strategies are just a wish list of things the company wants to do more of, but at least in the plan you will be forced to prioritize and de-prioritize:
AN AMBITIOUS PLAN THAT MAY SPARK CONTROVERSY
Prioritizing doesn't mean a lack of ambition however. In strategy there is a certain amount of boldness that you need to motivate stakeholders, team members and the market. Prioritizing means targeting. Show the boldness of the plan supported by numbers like total addressable market (quantitative) and stories that show how real world end-users value what you are doing (qualitative).
In Controversy: The Essence of Strategy, "Often the controversy in strategy resides not in a general statement of the firm’s direction, but rather in its deliberate application: it is a matter of degree. Choosing between black and white is not controversial, but choosing among the various shades of gray is – strategy lies in choosing the right shade. The exhortation that a company should be customer-oriented and listen to its customers is not controversial – of course, it should. The strategic choice is to what extent it should listen to customers. How much money should be spent on marketing research? How much of the CEO’s time should be committed to customer contact? Allocating scarce firm resources, both money and time, undeniably involves a choice and a trade-off."
Two-way doors are decisions you can experiment with, fail, and go back. One-way doors are decisions you commit to and are then stuck with. Beware of plans that are tentative - they may have too many two-way doors. There should be some commitment, even if it comes with risk.