Strategic planning can seem like a waste of time and energy, probably because we’ve learned that "strategic planning" is where great ideas go to die.
In a survey asking nearly 300 global executives to rate their planning procedures, only a third said that it resulted in strategy that meets three crucial criteria: bold ambition, adaptability in the face of changing market conditions, and concrete guidance for management and the frontline.
Most respondents said they encountered flaws in processes, strategy, execution and adaptation. Yet somehow, many leaders reported they were satisfied with the process that led to their mediocre strategy.
There is a better way.
The producers of great strategy invest time, people and tools in making their strategic planning process a competitive advantage for their company. They allow for respectful debate, and most importantly, they incorporate data about customer needs.
Data is vital to effective strategic planning because the people making the big decisions are often further removed from the customer. Without data backing them up, strategies can lack customer insight and fall out of touch with reality.
By incorporating the voice of the customer in the planning process, it’s possible to create a strategy much more likely to be successfully executed and win customer choices.
Here are six ideas for transforming your planning sessions and getting great ideas out of your team:
1. We recognize that strategic planning should be evaluated throughout the year and revised as necessary. It is no longer an annual, top-down event.
Organizations that are slow to develop strategies can quickly fall behind in today’s fast-paced, dynamic markets. Leadership teams are pressured to continually monitor their environment, make decisions quickly, and execute even faster. This can’t be accomplished with the slow, annual strategic planning process of yesteryear.
2. We understand that without customers choosing us, we don’t have a business—so we will focus our strategy on the drivers of customer choice.
Resource allocation must be defined by future growth opportunities and areas that are most likely to win more customers, resulting in company growth, instead of being dependent on last year’s budget.
As a result, areas that are no longer providing a competitive advantage might need to be divested, while other areas are invested in more fully.
3. We will challenge internal expertise with customer data.
Customer insights focus internally-sourced intuition.
Your leadership team is smart and talented and they have a lot of ideas. Data insights help to immediately focus discussions and drive commitments to a few strategic initiatives. Data takes the risk out of selecting where to invest resources and cuts down on the time spent debating options.
4. Instead of relying on outdated marketed research, we will demand real-time data.
Real-time data is essential. When there was a slower rate of change, it wasn’t as necessary to keep a constant watch on the marketplace. You could make strategic decisions based on what you thought you knew and you had a pretty good chance of being right.
That’s simply no longer the case, and sustaining a competitive advantage takes constant vigilance in an era when markets are changing more quickly than any time in history.
5. We will look through the lens of our customer when evaluating competitive intelligence.
In fast-paced markets, it’s becoming harder and harder to define who your competition is (or will be). Do you compete only with companies with similar products? Or do you compete with new technology coming from other industries? Or, perhaps, you’re competing with a customer’s other behavior option—such as doing nothing at all.
The trick is understanding what options customers are considering when making a choice. What or who do they consider to be the competing alternatives? How do you compare to competitors on the factors they care about? Your customers decide who your competition is, not you.