- Do Your Homework
- Develop Educated Stories about the Future – Strategic Scenarios
- Craft the Strategy
- Communicate the Strategy
Step 1. Do Your Homework
As stated earlier, strategic planning is really about creating possibilities – in an uncertain and unknown future. Therefore, strategic planning requires more than just showing up at the session. A careful evaluation of the industry landscape is required. A good plan starts with a look into the past to set context. The danger is that we like to think we can repeat the past – specifically past successes. However, the past is NOT the future.This review and evaluation includes:
A. Focus on Customers
- Develop a detailed analysis of known customer needs
- Segment markets and customers
- Outline the various ways to create value for the customers the company chooses to serve.
- Know their current strategies and approaches to your marketplace
- Predict how they might change in the future.
- Outline the capabilities or core competencies of the enterprise
- Define how capabilities and competencies match customer needs
- Identify barriers to your organization's ability to leverage its core competencies.
- Outline technological possibilities
- Review projected demographics
- Forecast regulatory shifts.
Step 2. Develop “Educated Stories” of the Future - Strategic ScenariosGathering the data noted above helps to set the context for the full range and scope of conversation required for the crafting of a solid strategy.We have found that the best way to leverage the preparation as well as focus the creative juices is to create two or three plausible but very different scenarios of possible futures.Scenario Planning provides a great structure for helping executives create a variety of scenarios that all take a long view. It is a disciplined, structured method for imagining possible futures, using a strategic thinking process.Scenarios are essentially “educated stories” about the way the world might turn out tomorrow and how we might recognize and adapt to those changing aspects of our world - changes that we might otherwise miss or deny.Scenarios are not predictions, but are vehicles for helping people learn by crafting alternative images of what may occur. In crafting the scenarios, multiple combinations of uncertainties are discussed and hidden weaknesses and inflexibilities of the enterprise are typically surfaced. (This is also a great lead-in for conversations about change.)Therefore, the real value comes from the focused, structured dialogue. The end result is not an accurate prediction of tomorrow, but better informed, agile and aligned plans about the future, with an approach that allows for the flexibility of actions necessary for the enterprise when responding to an unpredictable world. The four core questions in a scenario planning process are very useful in uncovering the nature and impact of the most uncertain and important driving forces affecting the future of the enterprise, which need to be addressed in its strategy.
1. What do we know for sure and how do we know it? (After further inquiry, initial “knowns” are often recast as “perceptions” and fall into question 2.)
- What political, economic, societal, technological, legal & industry trends are we sure will occur and what effect will they have on future of our organization? What data/evidence do we have?
- What political, economic, societal, technological, legal & industry trends do we think will occur and how will they affect the future of our organization? What data/evidence have we formulated our opinions from?
- What events, whose outcomes are uncertain, will significantly affect the future of our organization? How could we become more certain?
- What political, economic, societal, technological, legal & industry trends do we know we are completely unable to develop an information base about?
2. What do we think we know and why do we think this?
3. What do we not know ... but wish we did?
4. What do we now know that we do not know?
Step 3. Craft the StrategyIn order for an organization to realize all of the benefits of the hard work that goes into creating a strategy, it is important to capture the essence and specifics in a readily communicable manner. A strategy document should highlight 5 key areas:
- Strategic Statement
- Monitoring/Implementation Plan
- Purpose or Mission
- Strategic Statement
- Monitoring and Implementation Plan
- Customers and the value proposition (unique mix of value) and
- How value will be delivered (activities)
- What is the expected outcome?
- Who is responsible?
- How will the outcome be achieved?
- How will it be measured?
- What is the timeframe?
- What is the required investment?
Step 4. Communicate and ImplementWe recommend cascading the strategy communication throughout the enterprise so that each level of management becomes the teacher for the next, and the communications become the starting point for integrating the strategy into the behavior of each employee.This approach will also begin a movement in which all employees will be using the same values and principles as their “guiding light” in making decisions – as well as seeing what personal contribution is required to achieve the strategy.If people at all levels of an organization understand and support the strategic vision, they will be able to assess the wisdom and desirability of specific decisions, actions, and outcomes simply by asking one question: “How does this (decision, action, outcome) align with our strategic vision?”Effective communication is the way to successfully engage every employee. And the responsibility for generating and delivering a successful communications strategy falls squarely on the shoulders of the leadership team.