In the absence of strategic thinking, strategic planning will probably maintain the status quo

Posted by on Sep 29, 2011

How to Stimulate Strategic Thinking

In last week’s blog we wrote about the importance of advance preparation for strategy sessions. A comment from one of our clients got us thinking more systematically about what kind of advance preparation is most helpful, and we decided to share our thoughts in this week’s article.

What is best for advance preparation depends on where the leadership team is in its progress towards becoming a strategy-driven team.

Most clients come to us in when they are in one of four categories. Each benefits from a different approach to advance preparation.  This article sets out several of the ideas we’ve used with success for helping clients get maximum value from their strategy sessions. Of course, every client organization has its own unique conditions and requirements, so the following ideas should be considered as guidelines rather than universal prescriptions.

1. Teams without a clear strategy

This is where most organizations are when they first become our clients.
An organization without a clear, integrated strategy is almost certainly pursuing many strategies, but since they’re not formalized, the overall direction and strategic priorities are usually not broadly understood. Worse, the organization’s strategies and priorities may be inconsistently applied, and some may even be in conflict with one another.

The advance preparation appropriate for formalizing a clear strategy in this situation is quite straightforward, though it’s a lot of work. We have found the following preparation to be very helpful.

  • Develop a comprehensive environmental scan.
  • Develop a competitive scan that summarizes the strategies of your key competitors.
  • Identify organizations which have key strategic features you think may be worth emulating.
  • Complete an internal review of your organization’s strengths and weaknesses against objective external benchmarks. If your competitive scan is sound, benchmark your organization against your toughest competitors.
  • Document the strategies your organization is actually pursuing.
  • Identify your target customers and markets, value proposition, and key differentiators.

If this is completed prior to a strategy session with input from all participants, the team will be ready to discuss and decide on key points. Let the fun begin!

2. Teams facing a crisis

Organizations can hit a crisis at any stage in their strategic development, as many found out after the global financial near-meltdown in 2008.

Nothing captures people’s attention more effectively than a crisis. Unfortunately, crises have a way of focusing attention almost obsessively on short term issues.

We learned many years ago that it’s virtually impossible to get a team in crisis to think strategically beyond the crisis. Maybe this is a good thing – devoting one’s full attention to getting out of a jam may be just what’s needed.

We have used the following preparation before strategy session called to deal with a crisis, and with good success.

  • Identify the nature and source of the crisis.
  • Identify the organization’s vulnerabilities to it.
  • Identify aspects of the current strategic plan that may be invalidated by the crisis.
  • Identify aspects of the strategy that could be suspended during the crisis response to allow resources to be reallocated to the crisis response.
  • Brainstorm ideas that would reduce vulnerability to the crisis or which might find opportunities within the crisis.
  • Brainstorm the most important actions the organization ought to undertake within the next “100 days” (for example) after the planning session.

We’ve found that this sets teams up for productive discussions and decisions to respond effectively to crises, but it does little for strategy. We think that’s almost universal. Longer term considerations are seldom given the attention they deserve during a crisis, so we recommend setting them aside until anxiety levels have been reduced by successful execution of the crisis response plan.

3. Teams with a clear strategy, but no clear or compelling vision

Organizations don’t usually succeed in creating both a compelling vision and a new strategic plan in the same session. It has happened, but infrequently enough that we view it as an anomaly.

A sound strategy provides people with a clear view of the organization’s long term goals. A detailed implementation plan can be built, managed and executed in pursuit of these goals, even without clarity about the organization’s longer-term “vision”.

As long as an organization is growing and improving as it executes its strategy, there’s usually no need to rush into creating a new vision. But operating without one for a long period brings the risk that team members will slip unconsciously into a “defender” mindset. This predisposes teams to protect the organization’s position rather than creating a new and exciting future that will raise the bar and stimulate new enthusiasm.

Visions that are created before the leadership team has developed visionary ideas aren’t usually worth the effort. By making progress on their plans, leaders improve the organization’s position and its strengths. This sometimes builds the confidence they need to think “bigger”. That confidence is a requirement for the creation of a new and exciting vision. Insecure or contented people and teams seldom create ambitious visions.

We’ve had success helping teams with a sound strategy, but no clear vision, to prepare for strategy sessions with the following ideas:

  • Prepare a strategy execution report card comparing planned vs. actual outcomes for key areas of the existing plan.
  • Complete a competitive analysis showing the organization’s relative strengths and weaknesses against its most important competitors.
  • Brainstorm how the strategy and the organization’s priorities would change if the organization were suddenly 1.5 to 2 times its current size.
  • Brainstorm ideas for transformational change in the organization’s future.

This preparation will help the team to improve the quality of their strategy, and may also help them to discover whether they have ideas that are worthy of a new vision.

4. Teams with a clear vision and clear strategy

Organizations successfully executing a sound strategy and progressing towards a clear vision may, ironically, have the most difficulty preparing well for strategy sessions.

It’s easy for successful teams to become more conservative over time, particularly as they see the fruits of the goals and vision they set out for themselves years before. While this pattern seldom affects entire leadership teams, it is likely to affect at least some of the members.

We’ve seen executives decide to leave such organizations over disagreements about changing the vision. This is most common when a new vision stretches beyond where these individuals felt motivated to go; or alternately, where most of the leadership team were satisfied with a vision that was largely achieved, and didn’t support the re-visioning proposed by dissatisfied members.

While departures such are natural, it is always worth closely examining the reasons for them to be sure the organization isn’t becoming too placid in its success.

We have found success when asking for following advance preparation for organizations that already have a clear vision and strategy.

  • Prepare a strategy execution report card comparing planned vs. actual outcomes for key areas of the existing plan.
  • Complete an internal analysis showing how the organization’s current status on key issues differs from its vision – the “vision gap”.
  • Brainstorm what new developments in the environment might change the competitive space from one in which pursuing the current vision supports success into one in which the vision would take the organization in the wrong direction.

Creativity is critical in all phases

No matter which stage of strategic development your organization is in, stimulating creativity is important if you want to get the most from your planning. Whether your team is entering strategic planning for the first time or evolving an established plan towards a clear vision, creativity will help your team grow in its ability to see what may be possible.

We recommend the following to stimulate strategic thinking.

  • Long before planning starts, encourage leadership team members to seek new experiences that will broaden their awareness of what is possible for the organization. Try visiting other organizations, attending conferences, joining a business discussion group with people from other organizations, or read about what other organizations are doing.
  • Increase your creativity. There’s no doubt that novelty spurs creativity, and it helps when it involves physical activity. (Surfing the net doesn’t count.) Go to a different place, take a different route, learn a new sport, meet new people – all of these can spur creativity. Vacations that involve travel and new experiences are particularly helpful. Some of the most visionary ideas I’ve had popped into my mind during vacations. Returning to a favourite vacation spot is far less likely to stimulate new ideas than going somewhere new and different. And the more different, the better! For example, a trip to China is almost guaranteed to spur the creativity and imagination of anyone in a leadership role.

While these suggestions are far from a formula for preparing to create strategy, we hope they’ll provide you with food for thought when you begin planning your next strategy session. Of course, every team has unique challenges, and if there’s anything we’ve learned over the years, it’s that every strategy session should be customized to fit the client organization’s situation and desired outcomes.

Having the right plan to prepare for your strategy session is the critical first step.

© Knowlan Consulting Group Inc. 2011