If you have aspirations for your business to be something greater than it is — larger, more profitable, higher market share, more impactful, of greater service to the world, etc. — then strategic planning should be one of your most important management tools. Because strategic planning is the process by which you put in motion projects and initiatives that will move your business from where you are today to where you want to be. It’s important — very important.
It’s ironic, then, that the criticality of strategic planning as a process often contributes to the failure of that process. Say what?
Those business owners and CEOs who recognize the potential for game-changing results from a successful strategic planning effort also recognize the importance of the information and data upon which planning assumptions are based. They are tempted to devote considerable time and expense to gathering, analyzing, and interpreting all sorts of economic, financial, consumer, and market data as a prelude to the strategic planning process. That’s a worthy instinct, but unfortunately, it is often counterproductive (i.e., a mistake).
Perfect is the Enemy of Good Enough
Good strategic planning efforts frequently begin with a launch event, a multi-day workshop-style meeting attended by senior members of your team. This group must quickly process information that ranges from the “we know” (e.g. most recent financial results, current customer rankings, current staffing levels, etc.) to the “we think” (e.g. our current market share, customer value propositions, anticipated market growth rates, etc.) to the “we guess” (future economic conditions, competitor responses, regulatory climate, etc.).
The group should be able to quickly coalesce around “we know” facts but is at risk of falling into the paralysis by analysis trap with the other two categories. Such paralysis can derail, disrupt, or delay an otherwise productive strategic planning effort.
To support the point, take a step back and think about the big picture nature of strategic planning. You envision a desired future state — your aspiration for the business in, say, 3 to 5 years. You contrast that desired future state with where you are now and articulate the gaps between the two points in time. Then you explore and prioritize strategic initiatives and projects to bridge that gap. This whole process is an exercise in strategic thinking more than it is an analytical process. And these are very different types of thinking.
By definition, everything about the future is unknowable. Although some things about the future may have very high probabilities, there is some risk associated with every aspect of tomorrow. So in the context of your strategic planning effort, how valuable is it, really, to debate whether your current market share is 10% or 12%? Or to have your team argue about the precise response you can expect from competitors to a particular activity you plan to undertake? Or to fret about a high level of precision when forecasting long-term industry growth rates?
The point is to use sound judgment regarding the level of accuracy required for the many inputs to your strategic conversations. And to always keep the end in mind, which is strategic and long-term in nature.
Food for Thought
Before launching a strategic planning effort, it is wise to gather as much insight about your business, your markets, your customers, your competitors, and your environment as is both practical and economical. This information should be available to everyone who participates in your launch event. But once your strategic planning session is underway, guard against unproductive and potentially disruptive debates about “the numbers.” Keep everyone focused on “good enough.”