DRAWN FROM THE 2020 LINDSAY FORESIGHT & STRATAGEM STUDY:
THE NEW STRAT PLANNING PLAYBOOK OF BEST PRACTICES FOR A FUTURE WITHOUT PRECEDENT.
It’s almost guaranteed there are blindspots in your strategic plans of the past, and the one you’re undertaking next.
I should know. For decades I’ve participated in countless strat planning sessions; facilitating many of them. I’ve suffered process frustrations and disappointing outcomes firsthand – probably even caused some. I don’t know whether it was a subconscious attempt at penance, or intuition on the need to rethink the strat planning process overall, but recently I undertook an analysis of traditional planning best practices. Then I reanalyzed them through two lenses: Marketplace dynamics of the future (things any strat plan should account for) and my expertise in behavioral science. The latter spans universal tenets that drive human decision-making, including governance and organizational change management.
From this deep dive it was easy to draw conclusions on process improvements that would lead to more effective strat plans; a more rewarding experience for participants, too. I uncovered eight troubling and all-too-common blindspots. Every strat planning process suffers from some if not all eight. That’s unfortunate, because strategic planning is supposed to anticipate the future so no one is blindsided by what’s around the corner or just over the horizon.
#1: GOING UP A BLIND ALLEY. The first stage of planning is the journey to discover the essential business challenge or opportunity facing the organization. Blind alleys are the result of the planning team being deluged with background, data, spreadsheets and several hours-long PowerPoint presentations filled with chart after chart. This mental overload defies any person’s ability to parse, analyze, reflect or responsibly debate what the info might reveal. When this happens, team members are especially vulnerable to confirmation bias. They see in material what they want to see. Few if any “aha’s” arise. The team has no clue on the core problem that should really be addressed to advance the company’s future sustainability and growth.
The treatment? It needs to start before the planning journey begins, with thoughtful preparation and curation of info provided the team. That way, the team is not overwhelmed with irrelevant or tangential info (which leads to blind alleys). Rather, they can devote their talent – and sufficient time – to assessing and framing the essential challenge or opportunity the plan is to tackle. As Einstein famously said, “If I had an hour to solve a problem and my life depended on the solution, I would spend the first 55 minutes defining the problem.”
The problem/opportunity, once defined and stated as a question, becomes the mystery the planning team is to solve. Einstein bragged, “Once I know the problem, I can solve it in less than five minutes.” Experienced strategists agree that once things are properly framed, good ideas for solutions come rather quickly. However, in the set of new best practices for strat planning that arise from my study, the solutioning of the strat plan team should also be informed by a set of thoughtfully prepared and curated info. Like the first wave of “food for thought,” this second wave may require primary research and methods competitors don’t use, in order to have insights they don’t have. The best kind of insight not only serves to inspire the strategy that solves the problem, but also enriches the problem statement.
Without first acing the problem/opportunity statement the strat plan is to address, there can be no real vision for an organization’s future. That’s because when a statement is too broad, too narrow, not clear or not based on very good information, planners are unable to come up with a winning strategy to address it. The tragedy is not just that when the problem is off the strategy is off, it’s that when the strategy is off, everything that flows from it in hopes of solving the problem will also be off: the targets, innovations, capabilities, technology, partnerships, milestones and measurements. The entire strat planning effort will have been a waste of time.
To avoid plans that never get you where you need to go, center the team’s journey of discovery on the customer. To state the obvious but often overlooked: Customers are where sales, share, margin and profit originate. They’re where problems and opportunities originate, too. Who is your core and most profitable customer today? What’s driving their purchase decisions? What competitors do you lose them to, and why? That’s “why” besides price. Price is just a rational excuse people give for a deeper reason they don’t want to admit or may not even realize. (More on the best questions for planning can be found in the book Drinking From The Firehose: Making Smart Decisions Without Drowning in Information. The authors provide a summary here.)
Customer-centric problem/opportunity definition and customer-centric solutioning result in strategies that boost future viability, what is needed to scale and accelerate the revenue and margin to survive and thrive. That said, you still have to watch out for blurry vision, also known as –
#2: NEARSIGHTEDNESS. If severe enough, an inability to focus far ahead is tantamount to blindness. And “far ahead” is what’s critical for a strat plan team to see, because, let’s be honest, any plan that focuses close in – like the next 6-12months – is not a strat plan. It’s an operational plan with short-term tactics. In contrast, a true strategic plan is meant to transform an organization for systemic advantage, detailing the tactics to make progress in the short term (the next year), and the mid-term (the second year).
Some people say that, given the exponential pace of change today, one can’t plan more than six months ahead. That’s true if one’s employee situation, product quality, cash position or balance sheet are already so endangered you’re on the brink of not being able to survive. But if that’s an organization or brand’s situation, I’d posit that it’s precisely because its leaders were nearsighted, and didn’t plan more than a few months ahead! If they don’t strategize 18-36 months out now, chances are they will never have the opportunity, because in a few months they’ll be out of business.
The net result of nearsightedness in a time of exponential change is the death of an organization (it comes from Covid-19 as well as the accelerated disruption and innovation of our times). It’s what Peter Hinssen warned about when speaking at the London Business School: Most organizations allocate 90% of their efforts to “today,” with the rest going to tomorrow. This means the day after tomorrow gets nothing. Of course, today generates your current value. But when plans for your future value don’t extend beyond tomorrow, you won’t make it there. It’s that simple. What distinguishes category kings and paradigm shifters from others is they focus – devote lots of time – to day after tomorrow thinking.
The treatment for nearsightedness? It’s focusing on the day after tomorrow. Who will be or could be your core customer then? What do you know that others don’t about their needs, motivation, behaviors and influencers then? What’s so surprising about this future projection that it challenges expectations? What about it might require new products, a new operational or revenue model, and a new strategy for accelerating value creation in the eyes of the customer of 18-36 months from now? To win in this marketplace the day after tomorrow, what new capabilities should be invested in now? What new software or technology would be wise to develop now? Who could you acquire or partner with now to accelerate preparedness and preemptive advantage?
Ahhhh: Imagination! Intellectual insight! Foresight! As the dictionary of the Oxford University Press says, a lack of these three is the very definition of myopia. Yet, even when planning teams are exposed to what the future holds, sometimes they don’t want to see it.
#3: BLINDNESS TO THE FUTURE: We humans all have an innate blindness to the future. Behavioral economics reveals we irrationally discount and ignore the long term in favor of what we can see or feel in the present. And if some prediction of the future – were it to come true – means we ourselves would have to change, we’re likely to discount the prediction, or its source. Yet the truth is no one can change the fate of their company, brand or career without having great future sight. As Mark Twain said, “It’s important to plan for the future because that’s where you’re going to spend the rest of your life.” It’s where your company and employees will too, but only if you have an effective strategic plan to get there.
With the pace of change now exponential, threats and opportunities long assumed to be years away are now arriving daily, yet the kind of transformation needed to deal with these threats and opportunities requires leaders to start years in advance. It takes time to enlighten colleagues on what’s changing and get them to accept the implications. It takes time to align them on how to tackle the implications. It takes time to pull off the plan.
There’s no shortage of conjecture on the future, courtesy of pundits and prognosticators competing for attention and revenue. But there’s a respectable science of prediction-making, with standards of good data and vetted protocols. Called forecasting, it’s widely acknowledged never to be 100% accurate. (As Yogi Berra famously noted, “It’s tough to make predictions, especially about the future.”) But done responsibly – and not too far out (say, only three to five years in the distance) – forecasting is proven to be quite helpful by raising highly probable issues and opportunities and strategic playbooks to prepare for them.
Research, foresight and playbooks on the day after tomorrow are actually my métier, devoted to helping C-Suites, Boards and marketers prepare now for what’s next and strategically best for advantage and accelerated growth. In the course of teaching and consulting around the globe, I find most executives account in their future plans for the implications of climate change, water shortages, cyber threats and major demographic shifts. I’ve found few accounting for other challenges and opportunities which are 3-5 years out, such as these I’ve identified:
- Commerce, culture and consumption are converging. Among the implications are major shifts in what people are moved to consume, how and when; a 180-degree flip in how products and brands are successfully launched and scaled.
- Categories are fusing, getting confusing and evolving into something much broader. This means organizations need to anticipate now the new and broader competitive sets (McKinsey calls them ecosystems) in which they’ll soon be competing.
- Organizations are no longer dealing with people but rather, with gods. People today have technology and networks that give them power to bless or damn – overnight – a product, brand, cause, executive or marketing initiative. Given this, the future belongs to companies where, across the entire enterprise, people are equipped to learn more, faster, about what delights customers of today and tomorrow. This means organizations must reenvision themselves as an ecosystem connecting everyone, and connecting all the data, in order to have more, better and faster foresight, value creation and customer delight. This requires companies to rearchitect operational and revenue models for extreme agility and total customer centricity. Think of the model as an atom, with customers at the center, and all operations spinning around them at ever higher speeds to the point of predicting customer needs and wants. This means –
- Business strategy must merge with marketing strategy. Already, and increasingly in the future, all business operations are marketing operations. And this key conclusion –
- The rapidity and degree to which an organization converges its business and marketing strategy in ways that account for the above dynamics predicts its survival.
The treatment for blindness to this future? It’s making sure the planning teams experience a workshop where everyone learns and applies the same view of the day after tomorrow such as that of the futurecast above. Workshop exercises include:
- Considering the fusion and evolution of categories – imagining who competitors might be in 2-3 years.
- Roughing out a sample S.W.O.T. analysis, not based on the present (one’s current category or capabilities) but rather in light of what it takes to deal with the futurecast above.
Experiencing a robust and credible futurecast and spending time on its implications are critical steps in future-proofing one’s organization, brand and employees.
#4: BLINDNESS TO STRAT PLANNING’S REAL PURPOSE. Most people presume a strat plan’s purpose is to achieve a particular milestone of sales, share, profitability or market cap. There’s no denying these are important, but they’re not the goal, just measures of the success in achieving it. The real goal is future-proofing: Anticipating the future and developing strategies that minimize its possible negatives while at the same time enabling one’s organization to create the future as you’d like it to be, crafting strategies that increase your odds.
The treatment? Early in the strat planning effort, discuss as a team what a future-proofed organization would look like. Distinguish its operation from metrics that measure success. Ideally this imagining takes place in the aforementioned workshop before actual planning begins. That’s because understanding one’s real purpose better prepares a group for the actual work of future-proofing: embracing and aligning behind a futurecast (#3 above); avoiding blind alleys (#1 above); and looking in a mirror.
#5: BLINDNESS TO ONE’S OWN OUT-OF-DATE THINKING: Consider for a moment that, “It ain’t what you don’t know that gets you in trouble. It’s what you know for sure that just ain’t so.” That’s the wisdom of Mark Twain. It’s particularly true when planning and strategizing for the future.
The kind of future we face is without precedent. The pace of scientific discovery, innovation, disruption and disintermediation are mind-boggling. With “the internet of things,” anything that can be connected is being connected. Increasingly, sensors don’t just read data, they act on it. Borderless commerce is the norm. Barriers to entry for businesses are disintegrating, in part because supply chains are now fungible.
A few years ago, the World Economic Forum described what’s taking place as “a revolution that will fundamentally alter the way we live, work and relate to one another. In its scale, scope and complexity, the transformation will be unlike anything humankind has experienced before…” And now, COVID-19 is accelerating change and, of course, volatility. From mask-wearing to distancing to cash-reserving, it’s creating new best practices.
So much is riding on the work of those involved in strat planning that it’s nigh on a sacred trust to be on top of what’s likely to work in the future to make their organization viable, sustainable, profitable. This begins with a look in the mirror to consider the degree to what you know for sure just ain’t so. What the best and the brightest will recognize is that their long-used rules of thumb and favored go-to strategies of the past are no match for the future they hope to create. Many of these were practices best a time when life was simpler, change was slower and the world smaller; when it was almost guaranteed that if you did A, then B would result.
What’s more, years of data now reveal that many favored rules of thumb are no longer true, or were never true to begin with. For example, extensive longitudinal studies conducted by the Ehrenberg Bass Institute of Marketing Science prove that customer retention is NOT cheaper than acquisition. Price promotions do NOT boost market penetration. The 80/20 rule is nowhere near a rule to be counted on.
Authors of the book Detonate: Why-and how-Corporations Must Blow Up Best Practices to Survive explain the danger of not actively assessing and addressing out of date rules of thumb: Because they’re presumed to be “conventional wisdom,” they get applied at a moment’s notice, often without realizing it. But as they’ve aged they’ve gotten more and more impotent. People have gotten away with using them because – up until recently – the pace of the marketplace was slow, allowing even bad practices to continue without the rapid consequences of today. But today, using them is an existential threat almost as great as the other threats organizations face. That’s because using them can make people hopeful, when they only make matters worse.
This brings us back to the preplanning workshop mentioned earlier; my study’s prime recommendation for strat planning in a world without precedent. Part of the workshop’s “curriculum” should be a session where people share their favorite go-to strategies and rules of thumb, debating their validity. It should be followed by a lesson on several common rules of thumb which evidence reveals are no longer true or never were to begin with. This portion of in the workshop is required because those responsible for transforming organizations can’t really do it until they first transform themselves for the future, too.
The treatment? It’s called unlearning: “For adults, one of the most important lessons to learn in life is the necessity of unlearning. We all think we know certain things to be true beyond doubt, but these things often turn out to be false and – until we unlearn them – they get in the way of new understanding.” Even those who graduated from college five to ten years ago have much to unlearn. Those of us who’ve been in business for ten years or more have a great deal to unlearn in order to be the best possible planners and strategists for the day after tomorrow. That’s why a session on “unlearning” is part of the workshop recommended to prepare teams for strat planning. Among the things to unlearn is the typical outline used to write up and communicate the plan.
#6: BLINDNESS TO THE FACT THAT THE BEST PLAN IS NOT A PLAN PER SE BUT A COMPELLING AND PERSUASIVE CASE. The longer and more detailed a plan document, the harder it is to digest, the less it’s read, the more impossible it is to remember and apply daily, the more skeptical people will be of it, the less they’ll embrace it, the more the entire strat planning effort will have been a waste of time.
Yet most strat plans tend to follow a traditionally long format. It’s outline is one more thing to be unlearned because it’s from a different time. The plan itself also needs a new outline, because plans today are increasing in size and obfuscation, the result of earnest efforts to be thorough and inclusive. Diverse constituencies want to see reflected in the report their department, their input, their concerns, complaints, wants and the future as their personal interest would like it to be. The result is a report that’s hard to organize, hard to write, harder to read and impossible to be moved by.
The treatment?Because the effectiveness and transformational power of a strat plan is only as good as it’s brevity, clarity, understandability, persuasivness and ability of key points to be recalled, the new best practice is to craft it with this outline:
- Define (at the highest level) the essential problem or opportunity the strat plan must address to increase the odds of the organization being sustainable, competitive and profitable the day after tomorrow.
- This is borne from a situation analysis that appears before the definition, and which clearly leads one to conclude the problem or opportunity as defined.
- The essential problem or opportunity should be framed as a question. As Einstein says, “What is the mystery you’re trying to solve?” This sets up all else in the document.
- What is the singular solution (strategy) that is so ingenious “in one fell swoop” it overcomes major hurdles in addressing the issue or opportunity above.
- How said solution (strategy) can be pulled off, as answered by these five questions:
- Where can we play to achieve this strategy?
- How can we win in that space?
- What capabilities/technology/partnerships must be in place to win?
- What management and measurement systems must be in place?
- How can we inspire and align people to deliver the above?
Done well, this outline results in an easy-to-read plan where each section sets up the one that follows and one comes away understanding and buying-in to the whole thing. Done well, the essence of the entire plan can be conveyed in two minutes through 10 sentences, one for each of the bullet points above. Voila! You’ve a plan so clear makes sense to most anyone. And it can be easily retold with accuracy.
This is critical to be able to deliver the ideal outcome of any plan. An enterprise where everyone so “gets” the problem and its solution that they are inspired and aligned to support it even if it means they have to change personally.
#7: BLINDNESS ON THE TRUE DELIVERABLE. The last question of the above outline asks, “How can we inspire and align people to deliver?” Often it never gets asked. At best it’s an afterthought even though it’s arguably the most important thing the plan needs to deliver: A strategy to pull it off. Its an abomination to have a team of valuable execs spend days and days researching, debating and crafting a plan if in the end it is poorly executed.
Execution typically starts with an executive’s speech or a one-time rally; a PowerPoint on the why and wherefore. Reporting the plan’s direction and rationale is more the intent than inspiration, persuasion and behavioral change. Such oversight reflects blindness to the need to future-proof the planning process itself. That requires tackling not just one problem/opportunity, but two:
- The first is the essential problem/opportunity that needs to be addressed to increase the odds of the organization being sustainable, competitive and profitable the day after tomorrow.
- The second is the essential problem/opportunity that needs to be addressed to increase the odds that everyone who is tasked with carrying out the plan understands it, buys into it, and is inspired to work hard enough to bring it to fruition.
The treatment? It’s for the planning team to have both the above in mind from the beginning. It’s having them realize that to pull off the second takes a lot of strategizing and planning, just like the first. The second is helped tremendously when the strat plan itself is a persuasive, logical case that can be summarized in 10 sentences; really easy to understand and “repeat.” That’s because the key to everyone being inspired and aligned to do all it takes to “win” the day after tomorrow is the ability to move their emotions.
Engaging people emotionally so as to impact their behaviors is why some refer to this subsection of the strat plan as a marketing plan. Better than that framing is seeing it as a training plan. The critical components are familiar to anyone who coaches athletes to give up old habits and replace them with new techniques. Sharing a compelling case for what has to change and why. Conditioning to enable the change. Repetition to the point of doing the right things autonomically. Frequent reinforcement and reward. This works, but it means that, like coaching to win, training needed to “win” doesn’t end once the conditioning plan is written. To create the highest possible performers, training never ends.
For a strat planning team to not have an effective training plan accounted for is to leave leaders of an organization blind to what’s needed to fully prepare for the day after tomorrow. It renders blind those they supervise as well. The result?
#8: THE BLIND LEADING THE BLIND. This is when a team goes up blind alleys. Nearsighted team members foil meaningful problem definition. Plans never become strategic because the future never comes into play. (People end up optimizing Blockbuster when they could have been the ones to envision Netflix.) Future-proofing never happens. A plan’s foundation wobbles, based on rules of thumb no longer true. Once written, the plan sits buried on desktops or files. The CEO mentions it’s been completed. It’s checked off of people’s to do lists. Little changes, including the company’s fortunes.
Sooner or later, panic ensues when things predicted to be in the future arrive in the form of major disruptions, competitors, a loss of share, margin, profit, momentum, cash.These things happen when well-intentioned people gather for a strat planning effort based on how it’s always been done; when the strat planning process itself is not very strategic and not designed for a world where problems and opportunities predicted to be years away now arrive daily.
The treatment? If you’ve read this far it’s self-evident. It’s future-proofing your planning process. It’s enlightening a strat planning team on how best to plan by teaching them the best planning practices for these extraordinary times. A great plan for the future is entirely dependent on planning a great planning process – before starting to plan.
The type of preplanning workshop recommended here is essentially designed to prevent each of the blindspots noted in this article. Because once an out-of-date planning process begins, it’s hard to reverse its trajectory. (“Let’s see a show of hands from the strat planning team. We’ve been at this now for two months but who wants to start over?”)
With a good preplanning workshop, the right things are unlearned. People’s minds are stretched so they never return to their prior, smaller dimensions. They will view with new eyes the future issues and competitive possibilities of their category, customer, business and operational model, value proposition, innovation platform, margin-makers and enterprise-wide training plan.You’ll end up with a better plan, better buy-in. You’ll also end up making better use of everyone’s time.
Best of all, you’ll end up with a better day after tomorrow. In these challenging economic times, that’s what we’re all really called to do, isn’t it? So let’s use the best possible best practices in crafting plans to make it happen.
Marsha Lindsay researches, analyzes and forecasts future marketplace dynamics to help C-Suites, Boards and marketers prepare now for what’s next and strategically best for advantage and accelerated growth. She’s widely published. Founder and CEO of Lindsay Foresight & Stratagem, her speaking engagements and consulting clients span the Fortune 100, multinationals, VC-infused startups, conferences and universities around the globe. All her work is grounded on decades of scholarship in the behavioral sciences – the universal and timeless tenets that drive human motivation, decision-making and business transactions, as well as employee and corporate dynamics and change management.
This article copyright May 4, 2020. Lindsay Foresight & Stratagem.
5-5-20 Not to be reproduced or transmitted without the express permission of the author.