Most Companies Don’t See Strategic Threats Coming Until It Is Too Late – Part 1 of 3
Organizations are gradually adapting to increasingly effective strategic planning and strategy execution methods that allow them flexibility to quickly adjust tactics in today’s more challenging and fast-changing business environment. Gone are the days when strategic plans where meant to be static guides for a 3-5 year period. Simply put, strategic planning is about maximizing our opportunities to be successful, and that changes some of the requirements for strategy implementation in our current business climate. One factor is that strategic threats are emerging more quickly and in increased numbers. Now, more than any time in history, there is a need for more frequent “attention” to be paid to both strategy and execution. This three-part article series provides some valuable guidance to business leaders for more agilely managing strategy and execution in a business climate filled with hidden strategic threats.
The True Purpose of Strategic Planning Hasn’t Changed
As the vestiges of the Great Recession continue to dissipate, corporate strategy has been affected. Having passed through the worst economic conditions since the Great Depression, businesses across the board have adapted their behaviors and strategies. Today’s strategic planning has transitioned from a process of trying to predict the future to one of looking backward at what we “know” as well as examining the current-state realities of our business and markets. These combined actions help build far more effective transformation strategies for the future by leveraging lessons learned from the past with a “stepped-up” enterprise threat surveillance element of strategic planning.
What Has Remained The Same
The underlying purpose of strategic planning, all the way back to its beginnings, has not dramatically changed (See A Lesson in the History of Strategic Planning). As always, strategic goals setup guidance for organizational activity. Goals still serve as the rocket thrusters that propel motion and guide direction. The strategy, as in the past, applies to all areas of the organization and the strategic goals define the major thrusts the business will pursue to achieve the vision of the strategy.
What Has Changed
What has changed is the approach taken to effective strategic planning. Corporate strategy management is now a day-to-day and week-by-week activity. The long-held belief that strategic plans are to be addressed once a year serves to obfuscate the ever-green nature of what plans really represent. Such perspectives are outdated now and executives are switching their mindset away from treating strategic planning as if it were a project. Instead, strategy and execution is gaining respect as an ongoing journey that requires us to recheck our position against the map frequently to avoid getting lost.
Additionally, today’s strategic planning is more balanced between two major factors:
– 1) the current-day business needs and issues facing the business
– 2) the the long-range future vision of the organization and how to get there
A strategic plan that seeks to impose strategy and execution tactics for a period of three to five years into the future without adjustments along the way is not realistic any longer. Guessing on what the future holds in store a year in advance is much harder to predict than it was even a decade ago. Forget about predicting five years out with any accuracy or security.
As a result, strategic planning timeframes are adjusting to shorter horizons, with the most ambitious organizations adopting a system of rolling 12-month adjustments to attenuate operational dimensions of the plan to the overall business strategy.
Trouble Comes In All Shapes and Sizes
The point of having a strategy and a plan to enact it is based on wanting success and trying to avoid trouble. The problem is, the traditional approaches to strategic planning did not always produce those outcomes. A more modern approach was needed. Organizations need all the help they can muster to maintain a slim second and a half lead over the competition and navigate around or through the unprecedented number of environmental threats that loom in the business world. We’re not talking about environmental threats such as natural disasters. Instead, threats as devastating to a business’s bottom line can be more subtle than an earthquake and still shake a business to its core.
Staying a second and a half ahead of trouble requires businesses to continuously survey the landscape – both inside the organization and out. Businesses must be thoroughly familiar with their market’s terrain in order to detect changing consumer behaviors, regulatory threats or the actions of competitors. Each can quickly reverse a business’s fortunes. That burden falls squarely on the shoulders of today’s CEOs. Leadership is ultimately accountable for instilling the processes and rigor needed to maintain a system of environmental surveillance and a method of devising strategies and tactics to leverage the information it yields.
The trends this surveillance detects, when juxtaposed against the business’s bedrock desired key outcomes (as defined in the strategic plan), serves to correctly guide decision making and promote the right strategic initiatives needed to protect the business’s interest. Done well, the very process of strategic planning helps identify many threats, while operational measures serve as additional protection to the organization – via governance that tracks and monitors the key metrics of the business that signal trouble as it approaches.
The Next Segments
The next articles of this series will delve into specific types of threats that organizations need to be able to detect and account for in their strategies. Tactics for detecting and surviving threats will be shared, as will the best methods to incorporate threat surveillance into a modernized strategic planning process.
Resources for Taking Action
Free Strategic Planning Article Compilations and PDFs:
1 Free access to the Strategic Planning Monthly: Archive
2 Free Online Strategic Planning Articles Library
4 Information about Strategic Planning Learning and Development Programs