Reading the literature on the subject, one could be forgiven for thinking that strategic planning is only concerned with strategy development. This is because there is a general belief that unless there is a strategic plan in place, there is no strategy to review. Yet we can name lots of organizations that have prospered for decades without a written strategic plan.
Every organization has a dynamic strategy system
Every organization has a dynamic strategy system in place whether or not the organization has a written strategic plan.
In fact, in our experience, many organizations have written strategic plans that are not consistent with the strategies actually being implemented throughout the organization. No wonder those plans never go anywhere.
Let’s first define some terms. We define strategy as being a choice of action.
Our research tells us there are eight choices of action / strategies common to all organizations from for-profits to nonprofits to public sector ones.
For more on this, see our book: The Alpha Strategies: Understanding Strategy, Risk, and Values in Any Organization (available at online retailers everywhere).
Current popular wisdom has it that strategy has something to do with creating value or competitive advantage.
In our opinion, this definition is far too narrow and makes it impossible to see the eight-strategy system in place in all organizations. For us, this typical definition of strategy is simply a description of the marketing/sales strategy, one of the eight strategies in any organization.
Our definition of strategic planning is that it is a review of current strategy against changing relevant major stakeholder expectations and factors in the external environment to determine if change to strategy is warranted.
Start strategic planning with consensus on current strategy
Armed with our definition of strategic planning, the appropriate starting place for it is to reach consensus on what is currently being implemented within each of the eight strategies. You'll be surprised, if not shocked, at how little common understanding there is.
The most common cause for failure of a strategic planning process is the lack of a common understanding by the board or management team or both of current strategy. This, in turn, drives multiple personal change agendas. Individuals push their perceptions of the appropriate priorities to pursue based on a flawed understanding of current strategy.
Without a common understanding, it becomes impossible to identify the relevant external factors impacting strategy performance that the strategic plan should address. It is the correct identification and understanding of external factors that should drive any strategy change decisions.
Start thinking differently about strategic planning
- Start thinking of strategy as something much more than about creating value or competitive advantage. This definition is far too vague. It makes me think of a first year MBA's answer to the question: "What do you want to do after you graduate?" Invariably, it will be "I want to make a lot of money". Think about it. If your organization is seeing as doing a great job, folks will flock to it. How can the organization do a great job? It starts with seeing the bigger strategy system in your organization.
- Start thinking that strategy is present even without a written strategic plan. Strategy is a choice of action. All organizations that are up and running having already made eight basic choices whether or not those choices were ever written down in a plan. Those choices are now being implemented. The question becomes "Do you understand what is being implemented?"
- Start thinking that strategic planning is much more than strategy development. It's about understanding whether the strategies of the current strategy system are appropriate given a changing external environment and changing major stakeholder expectations. A strong understanding of those relevant external factors will point to whether current strategy needs to be changed or improved.