Is strategic planning a relic of the past?
Every business needs to reboot
The Covid-19 outbreak has undeniably changed all our lives. Many of these changes are self-evident, but others will only become apparent in the months and years to come. Some changes will prove permanent, others just temporary.
For all the clichéd discussions about the ‘new normal’, it’s clear that, for every business leader, things are now hugely unpredictable. This impacts everything that we’ve built over the years, from our loyal customers and employees to our infrastructure and supply chains.
As a result, our businesses are now more fragile than ever.
That means that we must challenge our core assumptions and ways of working. Our job, as Managing Directors and CEOs, is to lead this reboot and quickly reset our business and, if needed, our business model.
For some, the core issue is one of timing; picking up where they left off, making sure that they are fast out of the blocks and are ready to come back stronger and more resilient.
Others will have to change how they sell and/or deliver their products and services to fulfil their Growth Potential. This will require rapid experimentation and evolution.
Many face even greater disruption and must work quickly to establish new offerings and/or new markets to survive and then build a new strategy for business growth.
So, what does this mean for Strategic Planning? Is it too early to plan, should we be planning at all, or, in the face of such uncertainty, should we all be adopting a more reactive approach to solving these issues?
Is Strategic Planning still relevant?
In my work with SMEs, I can see that most business owners have accepted that things will not return to normal. They have also accepted that, because the world has changed, their existing business plan is redundant and then have to reassess their chances of success.
What surprises me is the number of business owners who believe that they should ‘wait out the storm’ and only then start to work with their teams to re-plan. Too many remain ‘stuck in the engine room’ and seem determined to rely on a mix of business instincts and bravado to survive over the next year.
I believe this is a profound mistake.
If ever there was a time to work on the business, not in the business, it is now. It is precisely because of the current unpredictability that Strategic Planning is essential for effective leadership. Not because planning guarantees success, far from it. It's because it brings a level of coherence and structure that improves our ability to set direction, motivate others and, crucially, learn from our mistakes.
Planning is not redundant in these uncertain times, quite the opposite, it improves leadership alignment and accelerates the organisational learning needed to survive and then thrive.
With no plan and no strategic planning process, how can we lead a cohesive team and start to address the many unanswered questions?
- Does our long-term Mission still hold?
- Are the shareholders still willing to take the same level of risk to achieve it?
- Where and when do we best allocate our resources?
- How do we re-engage our employees both physically and mentally?
- How do we best bring them back from furlough into a more remote/socially-distanced work environment?
- How do we articulate a compelling Mission that will rebuild confidence and instil loyalty if we’re making some colleagues redundant?
- Do our customers still have the same needs, and, if so, can we fulfil them in the same way?
- Can we remain distinct from the established competition?
- Can we remain distinct from the new competition: Entrepreneurs who are seeking to ‘pivot’ into ‘our’ market as their markets collapse?
- What does good look like in terms of revenue, profit and cash for the remainder of our financial year?
The problem is that when we first try to address these questions, we hit a major stumbling block: The future is so unpredictable that it’s virtually impossible to make planning assumptions with any confidence.
This means that we can't simply answer these questions once and be done with it. That would be like playing a game of chess and sticking to a sequence of predetermined moves with no reference to how the game develops.
Instead, we must adopt a more agile planning approach that helps us to revisit the answers to these and other fundamental questions on a more regular basis.
Is the toolkit still relevant?
If business owners are questioning whether Strategic Planning is relevant right now (hopefully I’ve convinced you that it is!) then we should also pause to ask the same question of the underlying tools that have helped us in the past.
Should we throw away the traditional frameworks and ignore all that we have learned from the established gurus. After all, they only had to deal with the gentle wax and wane of markets and industries amidst the regular innovation
waves and economic cycles?
We have entered the pre-Covid realms of Value Chains, Supply Chains, Value Propositions, Flywheels, Needs-based Segmentation, Competitor Analysis, Competitive Strengths & Differentiation, Market Attractiveness, Blue Oceans, Red Oceans, Strategy Canvasses, Business Model Canvasses, Market Development and Go to Market Strategies, Marketing Machines, Minimum Viable Products, Product/Market Fit, ANSOFF, GE/McKinsey and BCG Growth Matrices, Brand Hierarchies, Sales and Marketing Funnels, Venturing Funnels and Horizons of Growth.
Have all these become irrelevant due to Covid-19?
My simple answer is no.
The basic tools remain the same because, no matter the level of uncertainty, there are still Customer Needs to be fulfilled, Products and Services to be designed and delivered, Sales and Marketing channels to be developed. There are scenarios to be anticipated, options to be considered and throughout, there remains the commercial imperative to allocate scarce resources in a way that delivers both profitability and resilience.
Thankfully, these remain relevant and invaluable tools that can (if used appropriately) help us frame and therefore improve, our strategic decisions.
Trouble ahead?
Disruption creates clear winners and losers and it will be those who are best equipped to anticipate, sense and respond to change that will ultimately succeed.
Those with good planning disciplines are likely to thrive but far too many leadership teams have fallen into bad habits over the years: For some, their Strategic Planning process is little more than an annual charade with a rehashed budget and a scruffy SWOT analysis. Others are locked into bloated, long-winded practices that are no longer fit for purpose.
If you fall into either of these categories, then a new agile approach is urgently required so that you and your team can learn and adapt during this uncertainty.
Initial Conclusions
The vast majority of leadership teams need to reboot their business in the aftermath of the Covid-19 pandemic. But this cannot be a one-off project.
Instead, we must regularly revisit core assumptions and ‘course correct’ as required. If not, we risk setting a path that may ultimately lead to oblivion.
Ignore the naysayers; planning is now more important than ever. It will not eliminate the incorrect assumptions we’re all going to make over the next few months and years, but it will help us quickly identify and learn from them.
The fundamentals of Strategic Planning might not have changed but what has changed is the need for many senior teams to embrace a new Strategic Planning process that becomes part of their monthly and quarterly routines.
Much will depend on your ability to engage and lead your senior teams in these new processes and routines. New leadership habits can help build a cohesive team and also bridge the gap between Strategic Planning and Effective Execution.
Next Time
In my next blog, I will explore why so many leadership teams have neglected their Strategic Planning processes. Then, over the next few weeks, I will describe a pragmatic process, based on a simple strategic planning framework that has already been adopted by many small and mid-sized businesses and can help others survive and then thrive in a post-Covid world.
If you can't wait, and want to take action now then then download the 52-page book, "Strategic Planning Made Simple" for free, now.
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