Making sense of strategy

I can't remember how many times I've heard company leaders, directors and, to a lesser extent, owners say they don't formulate strategy nor have a strategic plan "because everything is changing so quickly, any plan would be out of date". Statements like this are akin to saying we are too busy running (the company) to look where we are going or plan where we might head. Is this smart or is this dumb? I think the latter.

The problem with simply responding as the environment around you emerges—with not planning for the future—is that a competitor may do something that catches you completely off guard. To be caught flatfooted like this could spell disaster for your business.

A reasonable middle ground between a long, highly detailed strategic plan that probably won't get read or actioned, and no plan at all, is a succinct plan. I'll call it a smart strategy. A smart strategy has several defining characteristics:

• A smart strategy ties directly and explicitly to your company's core purpose. (If you don't have or can't describe your company's core purpose, sort that out first.)
• A smart strategy is succinct—no more than 3–5 pages in length. It should contain the company's core purpose, the strategies to achieve the purpose, objective measures (so progress can be monitored) and high-level actions required to achieve the strategies.
• A smart strategy takes a medium-term view. Five years is too long, too much can change (and probably will). Three is better. One year is too short (too tactical and operational).
  
• A smart strategy is built with the input of several key groups of stakeholders. The Board and management and selected customers and selected industry experts should work together. No one person or one group has all the answers. However, by working together, robust debate can take place and strategic options can be subjected to vigorous challenge.
• A smart strategy should not contain pages of SWOT tables, competitor positioning, product detail, organisational structure and names of key staff. This detail should be recorded elsewhere. It is input to the strategy, not the strategy itself.
• A smart strategy is read and reviewed regularly. The Board and management should sit down, together, and review the strategy every six months—to identify what's changed and what changes are needed. Flexibility is crucial—particularly in fast-paced, high-change environments.

I've seen this approach work well in many different organisations. If you'd like to explore how it might work for you, please contact me.