My Company just completed our Annual Planning. While we have a solid plan for the year, we didnít seem to spend much time strategizing. Is strategy and planning two different activities?
Planning and strategy are two different cycles. Most companies are fair to excellent on planning, few are competent at strategy and only the best recognize the difference between the two and actually accomplish both.
Most companies have what you might call a military command and control approach to planning and management. They see management’s role as forecasting and planning, organizing, command, coordinate and control. The objective is to create order, cohesion, harmony and predictability.
Their strategic planning is anchored in this thinking.
Willie Pietersen’s book Strategic Learning points out that this would be great if the environment our businesses live in were stable. His description of today’s environment is described as VUCA: volatile, uncertain, complex, and ambiguous. Does that aptly describe today’s competitive environment to you?
Planning in this environment is strictly a numbers game. In reality strategy is discovery. The planning approach to strategy makes no provisions for generating ongoing adaption. Pietersen points out this practice can be fatal in today’s dynamic conditions.
As I noted in my November newsletter Without A Plan: Expect 40% Less my client who recently sold his business completely readjusted his strategy and plans for 2010 as the first quarter ended due to one of his competitors merging with another competitive company. It resulted in improved focus, actually increased their momentum resulting in 35% sales increase and a 500% increase in profits.
As this example proves, strategy is about competitive rivalry.
Your planning process needs to have a strategic approach to allow you to make necessary adjustments at least every quarter. In today’s VUCA environment, without the ability to change you may discover you are too far behind to impact what the economy or competitors are affecting on your business.
Throughout my blogs and newsletters I’ve emphasized the importance of Strategic Discipline. Pietersen warns you must have a systematic method for strategic thinking. Collective excellence is achieved through repetition, deliberate practice, and effective learning to continuously improve the desired outputs of this process.
Nature he points out is our best teacher. 99% of all the species that ever existed are now extinct. As Charles Darwin noted, “It is not the strongest of the species that survive, or the most intelligent, but the one that proves itself most responsive to change.”
We have an advantage over other organisms - the power to think and learn. Harvard Business School Press author, Arie de Geus observes, “In the future, an organizations ability to learn faster than its competitors may be its only sustainable competitive advantage.”
The best companies recognize the importance of continuous learning. Companies like GE, Dell, Microsoft, Intel and many others require their leadership and management teams to deliberately and consistently improve their knowledge base. It’s why one reason why Gazelle’s offers two Growth Summits annually to provide our clients with the top thought leaders and best practices to learn and improve their businesses.
Pietersen asks managers to analyze the strength of their organizations method of strategy creation with a quick exercise on Strategy and Planning. I’ve included it as a takeaway for this newsletter if you’d like to get a copy of it. Simply request it below.
Strategic Learning is about becoming smarter than your competition and being able to turn key insights into competitive advantage. In today’s over communicated society, knowledge is no longer key; being able to interpret the vast amount of data that’s available and turn this into insights provides the competitive advantage. If you and your people do not have a systematic method for strategic thinking, how will you achieve insights that will allow you to gain a competitive edge?
Your business today must be an adaptive enterprise. Pietersen offers Five Killer Competencies to move your business into this stage. Positioning Systems coaching/consulting practice is uniquely positioned to provide a systematic Strategic Discipline to help your business achieve strategic thinking and the capacity to achieve insights into the trends in your industry and the economy.
If you’ve completed your planning for 2011, consider whether or not you’ve achieved strategic discipline, and if you can change your plans in time to respond to changing economic terms or a competitive attack.
As a basis for strategy if you’ve not read Verne Harnish’s recent article, Seven Strata of Strategy, we’ll include it with your request to analyze your organization’s Strategy Creation efforts.
Recognize the importance of strategy and planning as two separate disciplines for your business success. Realize that insight and learning are two of the greatest competitive advantages your business can have and absolutely requires in today’s changing environment.