June 21, 2011
I recently received an email from a client in regard to how we might refresh their strategic plan in the fall. A recent hire with a background in strategic planning had reviewed the organization’s existing strategic plan and provided perspective on how it could be improved. I reviewed the ideas – agreed with some, disagreed with others.
Essentially, it came down to two concepts – we needed to improve the clarity on terminology used within the plan and find better means to execute it.
In this post I am primarily going to focus on terminology and in subsequent posts will focus on the challenges of strategic execution (also known as “operationalizing” the strategic plan).
The challenge with strategic planning lingo is that everyone has a different definition and/or opinion for the same terms.
Try Googling ‘strategy’ or any common strategic planning terms (strategic, objective, mission, vision, strategies, tactics……). You’ll get a myriad of results that when investigated further, are typically not aligned. From the military origins of the word, to the PhD’s analysis, to the new-world redefinition, to the expert in the discussion forum – all this effort really results in is mass confusion to the business owner that was simply searching for a bit of clarity.
I felt, however, that I needed to provide my client with some guidance on what terms we should adopt for our planning efforts in the fall. So I dove further into my collection of MBA strategy
textbooks and literature, our firm’s strategic planning methodology and even braved more Google searches.
It was fruitless. I concluded that the terminology is subjective but the concepts remain the same:
- Why do you exist?;
- What are you going to do?; and,
- How are you going to do it?
Therefore, does the language matter if you can clearly communicate within your strategic plan the answers to the latter three questions?
I would suggest that it doesn’t make a difference. Strategy is about making a set of choices amongst alternatives that if successfully executed, will result in a desired outcome (and, from a
corporate perspective – a competitive advantage). If you can clearly communicate the choices that have been made and what the organization is going to focus on (Question #2) amongst competing alternatives you are forming the basis of a good strategic plan.
In Richard Rumelt’s upcoming book “Good Strategy/Bad Strategy: The Difference and Why it Matters” (http://goodbadstrategy.com) he provides examples of why organizations mistake goals for strategy and develop fuzzy strategic objectives and hence have difficulty in defining and subsequently executing the “how you are going to do it” portion.
Is the strategic objective / goal “we will double our business in five years” a good strategy? Rumelt’s position would be that this is a stretch goal and doesn’t really provide direction on the choices
the organization has made or where the focus will be on a few important items. Good strategy as defined by Rumelt “works by focusing energy and resources on one, or a very few, pivotal objectives whose accomplishment will lead to a cascade of favorable outcomes”.
So, the important part of strategic planning isn’t the terminology that has been used in its development; it’s the decisions (or “choices”) that have been made and the clear articulation of them. “What you are going to do” and “How you are going to do it” is more important.
So why do we all have an opinion on it, if it is so simple – it’s because setting good strategy is difficult. Even more difficult, is executing the strategy that has been set. Therefore, many organizations exude too much time and effort on “strategy” and the results don’t achieve the desired outcomes as described in the plan – we all develop our own perspective on what is good strategy because few get it right.
And, that is my opinion….
— Dustin Anderson
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