The 3 Real Reasons for Strategic Planning
“Strategic plans are obsolete. The market is changing so fast, no one has a clue what it will look like in five years.”
Do you agree or disagree with this pronouncement?
If the primary goal of strategic planning is to predict the future, then we should give up right now. (Not to mention the fact that planning is hard, expensive, and time-consuming.)
But a focus on prediction misses the point of planning. When I work with top leadership teams, we are not trying to predict the future at all. Instead, we are pursuing three more important goals—the real reasons for strategic planning.
Here they are in plain English:
Reason #1: Think critically about the business
The first real reason to work on a strategic plan is to make yourself stop working and take the time to think critically about the business. If you never stop and think, you will lose. It’s just a matter of time.
Ironically, I learned this lesson from playing a board game.
Years ago, a good friend invited me to play Axis and Allies, a complex WWII game with little plastic army men, tanks, planes, and ships. I saw myself as a pretty smart guy, so my initial strategy was to look over the board for weak spots to invade and take over.
I got demolished in game after game. And then I got mad.
Things didn’t change until I took the time and mental energy to think about how to win and to play out unfavorable scenarios several moves ahead before I committed my resources.
You may be a smart business leader. You may be the smartest person in the room. But you still have to take time out to gather more data, consult with your team, consider what might go wrong, and agree on how you will move forward.
Reason #2: Get people to see the same things
The second real reason to invest in a strategic planning effort is to get people to see the same things.
This is harder than it seems. Everyone brings their own unique perspectives to work. And even if you manage to create a shared vision, the picture of your business future tends to shift or drift in people’s minds over time.
When we decided to build a new university in Africa, we invited dozens of top minds to a summit and invested hundreds of man-hours to create a strategic plan that everyone agreed on. It catalyzed the efforts of diverse people on multiple continents to achieve the impossible.
But after the original 5-year-plan was realized and the university was open, I felt far too busy to invest the time for another major planning effort. It wasn’t long until confusion crept in and divergent visions created fractures that could have ended the dream. What was clear in my own mind was not always clear for others—and consensus suffered.
Unity of vision doesn’t happen by itself: it has to be forged. Reality is the anvil. Well-aimed questions are the hammer. And the time away for intense focus is the furnace.
Reason #3: Making hard choices
The third real reason to get away and plan together is to face and make hard choices.
When facilitating strategic planning sessions, I often tell leaders that their plan is more about what they say “no” to than what they say “yes” to. I don’t have to remind you that your business has finite resources. Your budget, people, and time all have limits.
How are you going to use what you have to achieve meaningful success?
Leaders make dozens (or hundreds) of decisions every day. This constant mental work creates decision-fatigue, and we begin to resent having to make more decisions. In this state, hard choices are the first things we put off. But the hard choices are often the ones that matter most.
- What projects or initiatives need to be postponed (or abandoned) so that your company can focus on the right things?
- What methods and time-honored processes need to change so you can start growing again?
- What people do you need to confront or reassign or release because they have become non-contributors (or obstacles) and are pulling others down?
In the middle of a demanding work week, leaders tend to procrastinate on making these hard choices. Investing the time and effort to get away with your team to plan creates the space to consider what’s best and make the hard calls — together.
No, your strategic plan will not enable you to predict the next market disruption. But it will help you to do three vital things that probably won’t happen any other way:
- Think critically about the business
- Get people to see the same things
- Make hard choices
Leaders and businesses who do these three things have a huge competitive advantage over other companies, no matter what the market does tomorrow.
Have questions? Reach out and talk to us about how you can plan and lead a successful strategic planning retreat for your team.