Planning for Strategic Business Success

In an episode from Chapter VI of Alice In Wonderland, Alice comes to a fork in the road and asks the Cheshire Cat:

"Cheshire-Puss. . . would you tell me please, which way I ought to walk from here?"

"That depends a good deal on where you want to get to," said the Cat.

"I don't much care where," said Alice.

“Then it doesn't matter which way you walk," said the Cat.

Like Alice, many businesses do not have a clear picture of where they want to get to. Business leaders are frequently caught up in the urgent day to day activities of their businesses and neglect the important discipline of strategic planning. They operate more “by the seat of their pants,” dealing with issues as they come up, either based on “where we happen to be at the moment” or “the way we’ve always done it.”

Strategic Planning is Important

Strategic planning is needed because the world is changing (as we speak)! A clear strategy is essential to release the tension between continuing our business “status quo” today and changing into the business we will need to succeed tomorrow. To reach our goals, we first need to define success. We need to begin with the end in mind, with a plan. Peter Drucker persistently encouraged business leaders to innovate systematically, looking for incongruities and dissonance between what “is” and what “ought to be.” In a changing world, strategic planning significantly increases the likelihood of success.

Strategic Planning is a Discipline

Strategic planning is a learning process that enables us to look at our objectives and evaluate potential challenges and contingencies. This gets us ready to understand the road we will travel. We will not know everything about the route we are taking, but planning helps prepare us to meet opportunities or challenges as we encounter them. Planning is learning, and learning involves designing capabilities in advance to embrace opportunities and challenges as they occur and later adjusting based on new understandings.

Strategic planning is more tangible than determining values, vision and mission. Planning flows out of these activities and includes specific goal setting, action planning and assignment of duties, as well as eventual follow up (feedback loop) to evaluate results. Planning describes and initiates the disciplined actions that will accomplish our vision. Accordingly, strategic planning should not be viewed as a sterile exercise but rather a process that energizes the team towards a common purpose and a shared vision of the future – providing a framework for action and creating a healthy, growing, and competitive company.

Strategic Planning is Rigorous

Next to not planning at all, the greatest danger in the strategic planning process is skipping important steps. Steps to successful strategic planning include careful evaluation (Where are we?), planning (Where do we want to go?) and tactics (How will we get there?). Frequently strategic planning fails when people skip steps and jump directly to discussing tactics. This can happen if people try to find a quick, practical solution to a problem or issue before they fully understand their competencies and opportunities. We need to be fully aware of what has happened and is happening to understand where we need to go next.

Other barriers that erode progress in strategic planning are the usual suspects: internal politics, poor communications, lack of a team approach, hierarchical management style, lack of leadership, and tackling too much. Being inclusive and open and listening carefully to your team’s market knowledge is invaluable and irreplaceable. A healthy strategic planning process discovers – both internally from employees and externally from customers – the real truth about the company, its products and industry standing.

Successful strategic planning, embraced by an approachable CEO, builds on the competitive skills and advantages of the business and its team members. It allows the business to exploit new opportunities in the market and steer activities and capital in the directions shifting market conditions dictate. Strategy often involves tough choices – perhaps even shedding the products and people that once made the business successful to move to a stronger product platform.

Strategic Planning is Valuable

Strategic planning is the foundation of the path we will travel. As we act on our plans, our actions bring us closer to our intentions and even more opportunities become evident. This synchronicity may happen because as we move nearer to something, we can see it better and also better see the means for achieving it. Or this may happen because our planning enables us to determine which activities are important and to focus on them more successfully, with fewer distractions. For these reasons, healthy businesses plan to accomplish more and to increase their capacities to accomplish more. Strategic planning embraces and exploits the daily tension between continuity and change.

Jim Gettel and Lou Banach are Managing Directors of Schenck M&A Solutions and each have over 20 years of experience in helping businesses with strategic growth. Schenck M&A Solutions is an advisor to privately-held middle market companies in strategic acquisitions, divestitures, recapitalizations, turnarounds and planning.

March 2009