Your Choice: Front Windshield or Rear-View Mirror?
Peter Drucker said it best, “Plans are nothing until they degenerate into work.” Stated differently, plan the work and work the plan. Dwight Eisenhower asserted “Plans are nothing; planning is everything.” Pursuant to these core principles, Strategic Futures performs strategic planning assignments to further creative collaboration among participants who will be active and accountable in actually implementing the plan. As consultants, we probe, provoke and challenge to see new possibilities using opportunity-centered visioning and strategic thinking. Our approach to strategic planning is compatible with Enterprise Risk Management but there are several key distinctions.
Enterprise Risk Management (ERM) is a risk-based approach to managing an enterprise, whose ancestry reaches back several decades to include Statistical Process Control (SPC), quality circles, Total Quality Management (TQM), and ISO standards. ERM adherents, like their TQM brethren before them, often make sweeping, potentially dangerous claims that ERM is your “silver bullet” – it’s all you need to manage successfully. (Manage, perhaps although not necessarily lead). A few decades ago, this school of thought preached similarly that “TQM is all you need.” During the TQM heyday, Motorola was contemplating deeply its TQM navel; Motorola was educating other companies as to its TQM theology, when the digital revolution passed it by like a speeding train. Whoops! Drinking the kool-aid rather than thinking ahead, Motorola had some serious catching up to do.
Successful organizations align and balance strategy, systems and structure around their mission and customers. ERM is an excellent tool and an essential “system” in the triad of strategy, systems and structure. However, systems alone do not a thriving organization make. Systems are not strategy although they may masquerade as such.
It’s no surprise that incessant focus on risk cultivates a deeply risk-averse culture and puts it on steroids, painting creativity and change into a narrow corner. Why is that? A risk-averse culture requires complete certainty in all things, much the way government bureaucracies operate — slowly and uncompetitively. Staff get the message that rewards and recognition are based solely on the degree to which risks were mitigated. They behave accordingly. Creative visioning and bold strategic thinking become heretical in extreme cases. Ask yourself: How would Steve Jobs fare in a zealous ERM culture?
Don’t get me wrong: ERM and related approaches are valuable tools when used as part of a balanced portfolio rather than as a silver bullet. Risk-based and risk-averse thinking has its place and time, used best when balanced with a creative, opportunity-driven strategic thinking process. Unleash the strategic thinking process first and don’t hobble it unduly. Thereafter, develop and apply your ERM templates interactively to make strategic choices and establish accountable dashboards.
Strategic planning and ERM are not mutually exclusive; they should complement one another. You wouldn’t drive without a front windshield, nor without your rear-view mirror. You need both to navigate successfully particularly when traffic is thick, fast, and erratic, as it is in these turbulent times.
Transcultural Strategic Planning
I just returned from a gratifying strategic planning assignment overseas engaging participants drawn from three continents. I have some reflections that I hope will be useful to those who are involved with global strategic planning which draws input from participants from around the world. Many have said it and it will come as no surprise to most, but those of us who view the world through the lens of the urban U.S. and Western Europe often make cavalier, yet implicit assumptions about the thinking patterns of folks from places like Africa, Asia or elsewhere. I believe that the tacit, root-cause assumption is this: Everyone is speaking English and they are speaking it so well, and therefore it follows that they pretty much use the same thinking patterns that I do! Indeed, having facilitated strategic planning for Native Americans in the American Southwest, I can attest to significant cultural differences on the North American continent itself. Many of us proceed apace as if all people see things through the same lens as we do. Slow down. Curves ahead.
A key skill needed by participants in a strategic planning process is the ability to visualize and then verbalize an outcome end-state as a goal. Such a goal statement answers a question such as, “how will things be different three years from now?” What we seek in strategic planning is a freeze-frame still photo of an outcome from which we can do reverse engineering to identify the objectives and strategies that will be needed to take us from where we are now to where we want to be. Sounds straightforward enough, doesn’t it? I thought so too until one of my African participants, an extremely capable young executive who is fluent in several languages said, “Spelling out goals this way is one of the hardest things that I have ever done.”
Why was visualizing an end-state outcome so difficult? There are a variety of reasons, depending on the culture that shaped participant thinking. For example, Native Americans’ notion of time often differs from the straight-ahead linear model that is implanted in many of our beady brains. In other cultures, the idea of “freezing” an outcome at a particular point in time is especially foreign; in these instances, a “process video” or moving picture is as close as some participants can get to defining a future desired state. In other cases, the whole skill-set of mental “time travel” – taking us from how things are now to how they need to be — which underlies strategic thinking is especially foreign and difficult.
The bottom line is that the strategic planning facilitator needs to pay close attention to the fundamental perspectives and skills that are needed for effective plan development. Don’t assume that your cultural viewpoint is shared by everyone in the room. Take the extra time to ensure that everyone has the power tools and skills needed to visualize the future and describe it. As you do so, you will get as much or more than you give by way of cultural insights and new ways of looking at things. I can guarantee that it will be more than worth your while.
In a Lousy Economy You Need a Strategic Plan More Than Ever
What once was an External Opportunity may no longer be so because of reduced consumer spending patterns or otherwise reduced demand. Businesses that do well in poor economic situations correctly identify opportunities. These opportunities may be more counter-intuitive than in rosier times. For example, take a look at the perceived needs of different market segments. These “needs” might be great chocolate, cosmetics, even some health care products. In tough times, needs often translate into products and services that make consumers feel better. You need to examine opportunities with precision. On one hand, an opportunity may be “basic”. On the other hand, it may seem extravagant. To many women, chocolate is a basic. To many men, it is an extravagance.
One or more of your competitors may now be an External Threat because they have adopted a price leadership strategy whereby they are undercutting your prices in the marketplace. The correct response in your new strategic plan may not be to match their low prices. Instead, you might want to emphasize the value of your products and services (market differentiation) or choose a niche strategy such as a hyper-focus on products or services for a particular market segment. As an example, a cosmetics product that has been targeted to a larger audience may be re-focused to a niche such as women over 50 who are active and have a strong focus on health. The product differentiation in this case could be redefined to zero in on the anti-aging benefits AND the product’s wearability and longevity during exercise.
Having established these strategies based on External Opportunities and Threats, you then need to assess your Internal Strengths and Internal Weaknesses so that you are able to respond to the new horizon of Opportunities and Threats that are presented by the current economic environment. Continuing with the cosmetics example: Does your marketing, advertising and product branding/packaging need to be re-tooled to emphasize the new focus on the active, health-conscious woman over 50?
The key to effective strategic planning in any economic environment is to regularly review your plan to make certain that it continues to work for your organization.
If you need help with your Strategic Plan, please contact us at info@strategicfutures.com. We have been around long enough (almost two decades) to have successfully facilitated strategic plans when the economic outlook was not so rosy. We have a successful track record working with businesses, nonprofit, association and public sector clients.
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