Roger Martin has a great article in the current Harvard Business Review about how strategic planning is a lie. I think it’s great, of course, because I’ve hated strategic planning for years now, but I think Martin does one of the best jobs so far in concisely pinpointing both the problem inherent in strategic planning AND our never-ending devotion to it.
In short, we love strategic planning because it eases our fear and uneasiness with the fact that we can’t know, predict, or control the future, even though in the end, we simply can’t.
We convert strategy into a cost-focused planning process because we can control costs and plans eliminate uncertainties. The reality is that strategy is simply about making bets, and you can’t make a bet without some angst, without some worry that you’ll get it wrong. In fact, Martin argues that if you are 100% comfortable with your strategy, then you’re doing it wrong. Strategic planning doesn’t actually help us succeed, but it definitely keeps us within our comfort zone.
Martin offers three rules for doing strategy right, all of which are going to cause you some angst.
1. Keep the strategy statement simple. It’s about where you’re going to play (which customers you target) and how you’re going to win (creating value for them). Note that it’s about the customers. You know, the ones that provide you with revenue? You can’t control them, but you can make an educated bet about how you will win them over. That’s strategy.
2. Recognize that strategy is not about perfection. We like to hold people “accountable,” which means someone is always checking on us to make sure we’re doing our strategy right. This pushes us into 100s of hours of work to make sure our strategy is perfect. Which is a waste, because making bets about things we can’t control can never be perfect. Strategy is more about improving the odds of our bets, not in guaranteeing outcomes.
3. Make the logic explicit. This one’s my favorite. Strategy, as mentioned above, should be simple. As some of my friends have been saying for years, your strategy document should fit one page (not crammed into one binder). But it’s critical that we document the logic behind the bets we’re making. From the article:
The only sure way to improve the hit rate of your strategic choices is to test the logic of your thinking. For your choices to make sense, what do you need to believe about customers, about the evolution of your industry, about competition, about your capabilities? it is critical to write down the answers to those questions, because the human mind naturally rewrites history and will declare the world to have unfolded largely as was planned rather than recall how strategic bets were actually made and why. If the logic is recorded and then compared to real events, managers will be able to see quickly when and how the strategy is not producing the desired outcome and will be able to make necessary adjustments.
Are you seeing the connection between strategy and implementation now? It happens as the actual people doing the actual work are actively learning from what they’re doing and making new decisions along the way–something that strategic planning has never been able to handle well.
But does it make you a bit nervous, having those employees out there doing things that aren’t in the Board-approved plan? Does it feel like you’re not in control? This is angst. And if you want to do strategy well, you’d better get used to it. And you also might want to consider developing some important capacities in your staff, like a better understanding of risk–what’s acceptable and what’s not in your organization, and why–and the skills to manage the conflicts that will emerge within those risk and decision-making conversations. That won’t make the angst go away, but I’ll bet you’ll start seeing better results.