The new buzzword in business is “pivot” – a key talent for future success, requiring an organization to not only be market-aware, customer-focused, and employee-driven but to deliberately develop the speed, agility, and flexibility to thrive despite the increasing rate of change.
This is one article in a 3-part series that will help you jumpstart your ability to respond quickly by up-ending one of the greatest barriers in the way of speed, agility, and flexibility – the standard strategic planning approach used by most companies.
We’ve all engaged in strategic planning Retreats in the past… but what about pivoting to a strategic thinking Advance? You should always advance instead of retreat!
CASE STUDY #1
I was privileged to see a $50M Manufacturing company pivot on a dime and become a $100M company as a result of the strategic thinking Advances I conducted with their team. Their previous strategic planning efforts had focused on becoming “BIG” – their Big, Hairy, Audacious Goal (BHAG) was to become a ½ billion dollar company. Unfortunately, that really didn’t inspire their employees, who were rural craftsman who saw nothing in that for them. And, a BHAG that’s 20 years in the future no longer resonates with your “near retirement” employees nor your “millennial” workforce who have no intentions of retiring with a gold watch.
Instead, they developed what I call a LEgendary Outcome or LEO – a 3-5 year Outcome everyone can recognize, experience, and celebrate. In this case, it was all about tapping into the pride of craftsmanship by visibly claiming their leadership role in the entire industry, which many of these craftsmen (and women) felt in their heart they deserved but had never achieved. Talk about spurring an organization to greatness!
Almost overnight they pivoted. They still had a growth goal… but it was one that everyone saw as important and achievable within the next 5 years. Next, behaviours shifted to focus on the Outcome – starting with replacing the typical massive strategic ‘To-Do’ list with just 5 Strategic Themes: 1 for each of the 5 years that clearly and consistently evolved towards the 5-year LEO. With just one annual Theme that empowered employees related to, every employee was able to create the kind of “wows in the moment” during interactions with customers, in every area of the business every day, that would lead them to their Legendary Outcome.
Are you stuck in a rut?
Ask yourself what stage in the history of strategic planning is your organization at today. In the early 1920s, Harvard Business School developed the Harvard Policy Model, one of the first strategic planning methodologies for private businesses. This model defined “strategy” as a pattern of purposes and policies defining the company and its business. Are you stuck with rigid policies in a fast-changing world?
Through the late 1950s, strategic planning’s focus shifted away from organizational policy and structure toward the management of risk, industry growth, and market share giving rise to such tools as the SWOT analysis model and a portfolio approach. Really? When was the last time your conventional SWOT actually made a difference in your business when every rise or fall in the dollar, every election, every change in the price of oil presents a new set of threats and opportunities?
The 1960s brought the industrial economics model and highlighted the relative power of customers and suppliers, and a focus on threats posed by substitute products and services, new industry entrants, and market rivals dictating competitive strategies. Are you more concerned about what your competitors are up to than you are with innovations that would simply make them irrelevant?
During the early 1980s when computers were in their infancy and nobody had ever heard of the internet, the shareholder value model and Michael Porter’s ‘Five Forces’ model became the standard. More than 30 years later, it is still a de facto standard, taught in every MBA program, although the world has gone through multiple iterations since then. Could anyone in your organization competently describe the forces acting on your business?
The rest of the 1980s and beyond was being dictated by strategic intent, core competencies, and market-focused organizations. Tom Peters’ In Search of Excellence championed this… although most of the businesses profiled in that book are no longer in business.
In the 1990s and beyond, strategic planning focused on stakeholder value, including adaptability to change, flexibility and learning organizations. Built to Last and Good to Great created the BHAG concept and became overnight sensations… although many of those companies followed the same fate as Tom Peters’ and Collins more recent book was aptly titled How the Mighty Fall.
Do any of these feel like the right approach in a world of globalization and economic turmoil?
Many of us were taught these approaches to strategic planning, and have dutifully attended the strategic planning retreats, worked through the various models, produced the massive binder full of detailed plans… and then put it on the shelf with good intentions to execute. Then, business as usual resumes. Sound familiar?
At the end of the year, that planning process typically results in a lot of missed goals and expectations. Only in rare cases are the support structures in place to flow the plan throughout the organization and engage everyone in an ongoing process to make it happen. Only rarely does the plan become a living, breathing force for the organization. Only rarely is it flexible enough to offer the right blend of being grounded yet agile.
Key #1 of 3 Play Your Business Like a Chess Game:
Conventional strategic planning is often akin to trying to tell someone how to win a chess game by outlining every move for them. Unfortunately, as soon as the opponent does something unexpected, the master plan goes up in smoke. Continuing to play the game the way you told them to will simply result in a loss. Instead… understand the game, which gives you the skill to pivot in the case of an unexpected move by your opponent.
CASE STUDY #2
I loved attending Warren Buffet’s Berkshire Hathaway AGM a few years ago. Two-time U.S. chess Champion Patrick Wolff playing against 6 opponents at once… blindfolded. He had enough “strategic plans” in his head based on experience that he could pivot on a dime. As each of his opponents made their moves, he could “see” the game unfolding, and knew what counter moves would lead to checkmate. He beat every single opponent (many of them respected chess experts) in a remarkably short period of time. Unless you have a photographic memory of every detail of your plan, such deep knowledge of the great game of business, that you can offset moves by the economy, your competitors, and your employees while blindfolded, the “every move in advance” approach is doomed.
Strategic thinking is what separates great chess players like Wolff from the rest, as they identify many potential upcoming moves and select the most advantageous as circumstances evolve. Strategic thinking takes the time to ask the right questions to identify what winning looks like. It engages everyone in challenging “business as usual” thinking. And strategic thinking provides the mechanism for a living, evolving plan of action that delivers results. Here’s how:
- Ditch the Binder: When I facilitate strategic thinking advances, organizations develop a simple 1-page plan that creates alignment from their organizational goal to a series of theme statements for each of the upcoming years that help them move confidently in the right direction. By their very nature Theme Statements build speed, agility, and flexibility into the organization, because they’re “Take that Hill” outcomes that serve direction markers, rather than detailed plans on how to take the hill.
- Empower Ingenuity: One layer down, we identify no more than 2-3 core outcomes that have to happen during the year, but they are kept at the level of the “what” not the “how” – and ensure that every employee is crystal-clear on the desired outcome so that they can apply their ingenuity to determining the best way to reach it. Did you know that the research done in this area illustrates that if you have more than 3 objectives, you’ll likely achieve none of them? Ask me for the evidence if you’d like to learn more! With 2 objectives, your chances of achieving both are even higher. With just one – you’re almost certain to reach your goal.
- Accountability: With great freedom comes great accountability. Every employee needs to know where they fit, why they matter, how they make a difference, and to be held accountable for delivering as promised. With a simple one-page visual, it’s clear who is performing and who’s not, the peer factor kicks in to deal with missed goals and deadlines, and the rate of achievement skyrockets across the organization.
Rethink whether you want to do a conventional strategic planning Retreat this year, or make the leap to a strategic thinking advance. Here are the other two articles in this series. Tiana, can you insert the links to part II and III?.
Most firms do their strategic planning in the summer or fall. What will YOU do differently this year to transform your Retreat into a Strategic Thinking Advance?