It is the heart of strategic planning season for many companies. The current year is fading into the rearview mirror and teams are looking ahead to making next year a better one…hopefully.
Strategic planning may be the most dreaded part of the yearly cycle. It’s lots of work away from daily tasks that seems to be filled with circular discussions that rehash the same topics again and again. But having a strategic plan is critical. If you don’t know where you’re going, any path will get you there.
Keep these four things in mind to make next year’s plan a better one:
- Be different. When a business’ offerings are not differentiated from competing alternatives, the only deciding variable is price. This leads to discounting, margin erosion, and feeling like an also-ran. But remember: it’s not enough to say you’re different. There needs to be compelling evidence that you are different.
- Make choices. The famous Harvard Business School strategy guru Michael Porter points out “the essence of strategy is choosing.” If you’re not making tradeoffs and choices, you’re only optimizing. Optimization is great, but it’s not a strategy.
- Focus on changes. Assuming last year’s plan was reasonable and the business is not in dire straits, consider only significant external market shifts and competitor moves that will have implications for your market position. Starting over with a blank slate only takes time away from discussing, debating, and pressure testing the things that really matter – what is different from the last plan.
- Share it. Employees will execute the business plan only if they know what it is. If the plan is kept in the board room, the team will execute something else and take the company astray. So what if the plan is public? Companies like Southwest Airlines, Apple, and Ikea have very public strategies that competitors still try to match. These companies own their spaces in part because everyone in the company knows what the company is trying to achieve.
SMP Alignment offers counsel in strategic planning, but only if you…