So you’ve cycled through the strategic planning exercise again, but have you paused to consider what this process should produce to drive the success of your business?
Active Knowledge Question:
When was the last time you considered the value your strategic planning process delivers to your business?
A Lost Art
The strategic business planning process is one of the most valuable tools that a business leader can bring to bear in lifting their business’s performance. Through it, they are able to bring about, not only succinctness in the business’s direction, but an alignment of resources and a focus on what is most important.
In the absence of this clarity, everyone is left to interpret for themselves what the business should be focusing on, what is most important, and where is it heading. The compelling story that could otherwise guide everyone in the business is likely absent.
Certainly how the strategic planning workshop is conducted and the overall process surrounding it is critical, however, it all starts with an expectation of what the process is required to deliver. The outcome may focus on one or more of these questions:
- What markets or opportunities is the business going to pursue?
- How may the business grow and improve its competitiveness?
- The why of its existence, in many instances, assumed to be about increasing profits?
And this may well vary over the life and seasons of a business.
Seasons And Life Cycles
All businesses experience seasons and cycles through their life, and these should be recognised, acknowledged and addressed by leaders.
Seasons are more short-term and really reflect periods of focus and also rest. For example, after an intensive growth phase, the acquisition of a business and its integration, it’s likely the business needs to ‘take a break’ and allow everything to be settled down before stepping out again.
Life cycles are a more macro, but also deeper, perspective of where the business is in its life. For example, is it becoming a bit lethargic? Or has it lost some of its founding entrepreneurial spirit?
If you are entering a phase of strategic planning, then to recognise the season and stage of life cycle your business is in, is critical. This will strongly influence what is possible and what should be done in your business.
What, How, Or Why?
You will often find that at different levels of a business, the thoughts of what strategy should address varies:
- At a board level, the directors often seek succinctness and want to know what markets you are going to access in the short, medium and long-term. What is your core business and how will you defend but also grow it? What markets are you beginning to explore and open up? What game changers are you planning? Their focus is often on revenue growth to deliver more profit. It can be very much about the ‘what’.
- At a middle management level, the focus is likely more around the ‘how’. How are we going to continue to grow the business and continue to be profitable? It is more a question of resourcing, capability and determining how changes may be brought about to deliver results.
- At a participant level, it’s all about the ‘why’. Participants are all the people who work within and with the business. Yes, they are concerned about the ‘what’ and certainly about the ‘how’, however, the question of ‘why?’ is becoming even more crucial to them. ‘Why should I work in this business?’ ‘Does it do ‘good’ for our community?’ ‘Does it offer me a rewarding career?’
So where do you think the focus of strategy should be? We can say that a strategic plan should consider all these elements – or that some are strategic planning, business or various other types of planning.
Yet, there is a simpler and far more correct way to find the answer.
How Do You Intend To Compete?
Business strategy is, at its most quintessential, how you intend to compete, and therefore, your process and outcomes must focus on delivering on this result.
To understand how you intend to compete, you must have a strong handle on what drives the performance of a business. This will require you to:
- Commence with the ‘why’ of your business’s existence.
- Consider how to build the competitive engine in your business.
- Capture the market opportunities that will then arise.
This is the priority and structure that every strategic planning process must consider and deliver on.
The market opportunities of today, tomorrow and the future can only be won if the business can compete effectively. In fact, they will only be recognised and emerge in a competitively fit business. The energy that a competitive business requires to be formed will only exist if the right ‘why’ is present.
An entirely new level of performance.
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All the best in the success of your business,