What strikes fear into the hearts of even the most hardened businessmen?
How about strategic planning. And the strategy plan that emerges from it? All two hundred pages of it. And that’s just the Executive Summary.
Does your heart sink when you hear “strategy” or “strategic plan”?
Have you ever heard someone say, “I’m stuck in a strategic planning meeting for the next three days?” No doubt there’s a distinct tone of despair in their voices. And a pleading look in their eyes.
Strategy is so important for any business large or small. So why do so many people dread strategy planning?
Is it because many companies make it complex. They let the strategic planning process become all-consuming and forget about the “actual strategy”.
Perhaps it’s because strategy is often inextricably woven into the annual planning cycle. Inevitably we divert conversations about the strategic intent of the business to talk about budgets, cost cutting, staff numbers and pouring over the financials of the previous and the coming years.
As the plan grows in size, the accountants will want constant readjustments to the business projections and revisions of the costs. Planners want to draft and rewrite project plans try to save a week here and a day there. They stick millions of post it notes on walls and then spend days re-arranging them.
And everyone wants absolute certainty over the amount of future revenue that the plan will deliver. The problem is that costs, people and premises are totally under the businesses control, where as future revenue depends mainly on the will of the customer. How can there be absolute certainly over future revenues? There can’t.
The resultant strategic plan is often hundreds of pages long and extremely detailed and yet during this process the “actual strategy” of the business is often glossed over because planning and budgetary cycle complexity swamps this most important part.
It’s the “actual strategy” that makes the customer want to spend their money with you that creates the revenue.
Of course budget planning is important.
Of course detailed product launches and systems development plans are crucial.
Of course cost control is required.
Of course controlling staff numbers is necessary.
But these need to come once you’ve developed and agreed the strategy. Because the strategy is the most important thing that will drive revenue in the future. Get the strategy nailed first and then commit to the detailed plans.
Yes a company strategy needs a mission statement, a vision and a goal (often a revenue amount for the equivalent expressed as market share), but strategy needs to drive these.
And the best thing to do is to keep it simple.
Customers will spend their money with you if your value proposition is superior to your competitors. You only need to do two things:
- Decide which specific customers to target – who are they and what are their key characteristics?
- Create a compelling value proposition for those customers – what will you offer them and what won’t you offer them and what sets you apart from your competitors? How will you price it? Where you will sell it? And how will you promote it.
Don’t get bogged down with planning, cost control and many iterations of strategic plans to guarantee success. Don’t overwhelm simply finding the core strategic intent. Deal with all that once you know where you are going.
Now it’s your turn: I’m sure as many people will disagree with my opinion as will agree with it. What is your experience of creating strategy within a business? Please share your thoughts by leaving a comment below or, even better, share a link to your own articles or blogs.
Are you going through a strategic review or do you know anyone who is? Why not share this post with them.