My answer borrows from Hemingway. “Change, like bankruptcy, occurs in 2 speeds. It happens slowly and then all at once. The purpose of a strategic plan is to plan for change.”
The myth of disruption as something new
We are told we live in times of enormous disruption, as if change is something unique to the 21st century.
Clearly, someone hasn’t been following Downton Abbey.
For five seasons, the highly popular television series has been chronicling the impact of change on the lives of the landed gentry in Britain in the early decades of the 1900’s. The seeds of change were planted with the beginnings of the Industrial Revolution in the 1700’s. They took almost 200 years to bear fruit and create the full blown changes causing heartburn for Lord Grantham.
The reality is that change takes time to take hold and actually become a force to be reckoned with. What is commonly referred to as disruption is when change actually arrives.
Let's look at some examples. We were told that the advent of wireless in the 1990’s spelled the end of long lines and traditional telephone companies. It will happen. But it hasn’t happened yet.
The Wright brothers were the first to prove airplane flight was possible. But it took another 25 years for the airline industry to become a reality. It took the airline industry another 30 years to dispatch ocean liners as the popular means of trans-oceanic travel.
Cheap manufacturing processes were supposed to destroy the craft industry. They haven't. In fact, the craft industry has gone through a tremendous revival.
Change is not only driven by technology
We are lead to believe technology is the source of all disruptive change. That view is very narrow and ignores other sources of disruptive change that can impact every aspect of the way organizations go about their business. Thinking technology is the only source of disruption will leave your business vulnerable to being blind-sided.
Consider the changes in manufacturing practices since The Love Canal environmental disaster in the 1970’s. This event marks the beginning of the end for unacceptable manufacturing processes in North America. But it has taken decades to result in better practices. The changes put a lot of folks out of business and a lot more into whole new businesses.
Change is fast transforming the workplace because of a changing and more diverse workforce.
The entry or exit by governments into markets, whether through a change in the laws or regulations or through a government agency, can be disruptive. Consider the impact Fannie Mae and Freddie Mac has had on the US housing market over the last many decades.
But, again, change doesn’t happen quickly and it isn't always about technology. Consider how many U.S. companies are now lined up to enter Cuba.
The key to managing change is to be ahead of it
The key to managing change is to be ahead of it by identifying and monitoring it.
This is the rationale for a strategic plan.
Setting goals and targets is the stuff of business plans - not the strategic plan. We see folks getting too busy setting goals for the coming years to have done the study necessary to understand that their goals are set on uninformed assumptions about emerging change and its impact on their strategy.
To separate the strategic plan from business planning, we define a strategic plan as being a review of the 8 strategies common to every for-profit and nonprofit organization. This leaves business planning as being something concerned with the implementation of the expectations of the strategic plan strategies.
Strategic planning must start with a deep understanding of how each of those strategies is currently being implemented.
This understanding enables the identification of external factors, either present or emerging, that might impact, for better or worse, the implementation of the individual strategy.
In other words, boards and executive management need to invest in understanding and monitoring what might impact their business definition strategy, known as mandate in nonprofits, their growth strategy, their risk strategy, their financial management strategy, their organization management strategy, R&D/technology strategy, manufacturing strategy, also known as service delivery or production depending on what the organization does, and, finally, their marketing / sales strategy, also known as the communications strategy for many nonprofits.
These eight strategies are the basis of the strategic plan and of all organization design.
Take-Aways for strategic planning
The take-aways for you to think about are “Is this how we look at strategy in our organization; namely, as a system of activities and choices of action that are inter-connected?”
If you did, you would be able to structure a monitoring system centered on each of the strategies. You would be able to see change more clearly as it emerges. This puts you in a much better position to know when to change current strategy, given that emerging change.
The second take-away is that you will no longer think of change as immediate or disruptive. Instead, you will be wondering whether your organization needs to invest more in trying to identify and understand emerging change. And whether to invest more in the training, development, process improvements, and product/services development requirements required to be ready for that change.
That's what a strategic plan is supposed to address.
For more on strategy, see The Alpha Strategies, Understanding Strategy, Risk, and Values in Any Organization.