If you’ve forgotten from your grammar lessons a few(!) years ago, an oxymoron is two words used together that, separately, mean the opposite of each other, like jumbo shrimp, cruel kindness, same difference, deafening silence… a word geek like myself could go on and on. But instead, I suggest we consider a phrase not typically included in a list of oxymorons: “strategic planning.” Do these two words really contradict each other? Mark Faust, founder of www.EchelonManagement.com and author of Growth or Bust! Proven Turnaround Strategies To Grow Your Business, says they do.
“Strategic Planning’ is an Oxymoron
To say, “strategic planning” is a call of management and board, is to ply an oxymoron, or at least refer to a practice for the moronic.
There is strategic thinking and there is planning and implementation. Strategy is the framework within which decisions are made which set the nature and direction of an organization. Planning has to do with implementation and tactics and tactics are what it takes to implement the strategy.
People claiming to be consultants who facilitate “strategic planning” probably don’t know many of the rudimentary aspects of strategy nor management. Beware of the “Strategic Planning” expert.
Rather than “strateegery” and the latest management fad mumbo jumbo, board members must hold leadership accountable to making sound decisions around the strategy to compete and position in the marketplace but this process is more about assessing your potential and position in the marketplace from the perspective of the customer than “strategic planning.”
The more apt term for the process an organization needs is that of self-assessment and it begins with your marketing and market-related objectives, which can be determined by questions like these:
- What is your decision on concentration? What is your competitive advantage, and in what areas of the market can you be most successful? What differentiates you from the competition, how do you prove it and how clear is this to your best customers and non-customers? What are the different activities we’re performing that our competition is not? What are the similar activities we’re performing in a way that differs from our competition?
Answering these questions accurately helps to ensure that your market focus and positioning strategies are most effective and thus helps you to win what to your company will be the lowest hanging fruits.
- What is your decision on your ideal market standing?
There can be great dangers to having an 85 percent market share, just as having too small a market share could be proof of gross ineffectiveness and lead to great vulnerability. It is better for you to have 50 percent of 250 than 85 percent of 100. Companies that are near monopoly face significant growth pressures and usually cannot effectively innovate. Choosing the most market share is not the objective; choosing the optimal market share is your objective. Boards must ensure leadership is determining the optimal.
Only after answering the above can leadership most effectively set Innovation objectives which can be determined by asking questions like these:
- What is your business, and what should it be? What is the result that customers buy from you, or what is the job they want accomplished?
These questions can be an opportunity of great innovation and repositioning for you in the marketplace. GE Aircraft Engines made a significant leap in the marketplace and in profits when they realized that rather than selling engines, parts and services that what the customer would value more would be “power by the hour.” This all in one offering at a unified price empowered airlines to better align costs and gain a new advantage.
- What areas might you not be adequately serving?
- What businesses, products, or practices, if you weren’t in them today, would you still choose to get into? Which ones would you not enter, and thus, what markets might you need to exit, or what practices might you need to abandon?
- How do you prioritize potential new markets, and what are the triggers that signal that you should enter them?
- What are all of the potential distribution channels you could employ? What are the advantages of each, and where might you consider changing your distributive organization?
- What is your customers’ perception of your service, and how do you compare to their alternatives? What is the optimal service standard and performance you need to aim for, and how do you best leverage this strategic choice in the marketplace?
Ensure your leadership begins a process of ongoing self-assessment and refinement of the above and other questions behind the process and you can transform the opportunities and growth of your organization…but whatever you do, don’t fall for strategic planning!