Yes that’s what I said, strategic planning has become obsolete. Are you surprised that someone who has spent the last 35 years working with executives and Boards of Directors developing and implementing plans to achieve corporate goals and strategies, would now declare strategic planning a waste of time?
What is not a waste of time is executing strategy and that is why the mission of our company – in fact, our very tagline – is all about “Executing Strategy”.
But don’t you need a strategy to execute on it? Of course you do. But do you need to do strategic planning to have a strategy? Not necessarily.
In fact all organizations have a strategy already. How do I know? Organizations make decisions everyday. They must have a context, a framework for making those decisions. That context is their strategy. It may not be well articulated, it may not take into account all possible scenarios, but a strategy exists.
Strategic planning, in the traditional sense, is an Activity field process that involves a lot of analysis and establishment of goals and objectives (Learn more about the Activity field of energy in The Living Organization model here). It includes the company’s Strengths and Weaknesses and considers the external Opportunities and Threats.
Integrating this information with market forces and trends the company determines its competitive position; a position that will hopefully place it in a blue ocean of success rather than the red ocean of bloody competition.
All of this is wrapped into a document that maps out a 3-5 year execution plan. Success is now assured. Or is it?
The problem I have with traditional strategic planning is that it ignores a critical factor of today’s reality. The rate of change and degree of complexity has increased significantly!
I think you will all agree that to effectively plan one must know the key variables that define success. But how can you plan when the actions that will create the desired results today will not create the same results in the future.
If we look at the frequency of change back in the early 1900, a person might experience 2 – 3 significant changes within one’s lifetime. Mostly the rules of how life worked were the same over any given 10 – 20 year time span. During the middle of the 20th century, the change frequency may have increased from 3 to maybe 5 or six, but the environmental factors that determined success still had at least a 5 to 10 year life span.
As we look back to the first decade of the 21st century, we find a significantly different story. We find an environment that is constantly changing at ever increasing rates. The needs of the marketplace and our customers are changing with it. The complexity of the challenges we face is rising along with this increased rate of change. Predicting future environments is close to impossible.
Ten years ago we did not have such things as Google, Facebook or Twitter. Today they are defining how we live, how we interact (both socially and professionally) and what our customers expect from us. It is unlikely that any strategic plan took these changes into account for how their organization would communicate with their customers, test out new products, and expand their markets.
So what’s the solution? Stop planning and just react to whatever happens? Accept that everything is out of our control and we should just run as fast as we can to keep up? NO!
The challenge of executing strategy requires a different lens for how we view the role of strategy and a different framework for how we prepare our organization to execute.
The old model puts the emphasis on the planning. With a well thought out plan, execution follows. And if you didn’t get the desired results, you must have created a poorly developed plan. The solution, hold another management offsite and do a better plan. This is what you would expect from a dominantly Activity field orientation. This is now obsolete.
The new model, which we call The Living Organization®, puts the emphasis on execution over planning and takes into account the Relationship field and the Context field. The Living Organization® provides a means to monitor the execution progress and be flexible to change as it occurs. Download a free white paper on the The Living Organization® to learn more.
I think a really good metaphor for what life is like today is to take a look at how some video games work (interestingly they call this segment of video games strategy gaming). Games like Zork, Myst and the ever-popular World of Warcraft are perfect examples.
You understand in a broad sense what you must do to win the game, and have access to key tools, such as a treasure map or a compass. These tools guide you along the way, even though you may not yet understand how to interpret or use everything in your arsenal.
The video screen provides a limited set of information about your surroundings. You can only take action on what is in the foreground, the field of play. You may have some visibility to what lies ahead; but the further down the path you look, the less information you have.
You must make all your decisions and take quick, decisive actions with only the immediate information available in the field of play in order to progress. Then more information is revealed. Each small action unveils a new, altered playing field with more of the background, the future, moving into the field of play. If you stay true to the game’s rules, use the guiding maps and compass, and follow your deeper guiding principles to make quick decisive decisions, you will invariably succeed in your quest.
This is how one of our clients is successfully navigating a major strategic transition to take the company in a whole new direction. They set the direction to offer a new set of services that is an expansion into new markets and even new relationships with existing clients. There are many elements to the execution of this strategic direction but to go through them all would take to long to enumerate here.
One specific example that highlights this approach is how they defined their new offerings. In the traditional approach, they would have collected data from their customer base (market research) and then defined a set of offerings with a plan to bring them to market. When I spoke with the CEO about why he wasn’t doing this, his comment was “we aren’t that smart”.
What did he mean by this? Simply, the marketplace dynamics fluctuate too much to follow this traditional approach. Instead, they went to their customers and said this is our new direction, how do you feel the company might best serve your needs? In essence, they are working with their customers in real time to define and configure the offerings.
The CEO, and his team, with a clear compass of where they want to go, is using that compass to make critical decisions in real time, in the active field of play, which provides the only the information available. And with every decision the field of play unfolds revealing new information and the process repeats.
At Quantum Leaders, we call this approach to strategy execution Real-Time Execution™.
Strategic planning as a process has become less and less relevant and reliable. Such plans run the risk of instant obsolescence before they can even begin to be executed.
By establishing a clear sense of “who” your organization is (its Soulful Purpose), where it wants to go (its Vision), and what it stands for (its Core Principles), a company develops a strong moral compass that guides strategic decision-making and responsible action at every level of the organization. Using the Compass to guide its decisions in real time allows the company to remain flexible, adaptive and responsive to their changing environment and market needs. These companies will ultimately have the most success in today’s business world.
And with new models of the 21st century business, like The Living Organization® they have access to a more robust set of information about the field of play, increasing their ability to execute effectively.