Growth Perspectives | Summer 2024
Breaking Tradition May Yield the Best Strategic Planning Results
It’s time for us to break up with rigid strategic planning processes that hold us back from spurring growth. Instead, consider testing these methods.
Brian Blaha, CPA
Strategic Insights for Today’s Firm Leaders
I recently had a discussion with a colleague on how to better structure the strategy development process to yield the best results. He referred me to two articles about strategic thinking. While the articles were over a decade old, they rang true for me, as if they were written yesterday.
‘GOOD STRATEGY BAD STRATEGY’
The first article was a summary of the book, “Good Strategy Bad Strategy: The Difference and Why It Matters,” by Richard P. Rumelt. Rumelt’s use of the term “bad strategy” resonated with me. He summarizes it through four main bullet points:
- The failure to face the challenge.
- Mistaking goals for strategy.
- Bad strategic objectives.
- Fluff.
Embedded in these statements is the template of modern-day strategic planning, which is followed by almost every strategic plan ever written. The plan starts out with a description of a company’s mission, vision, values, and then goes into a list of strategic objectives and priorities. The list of priorities typically read like a to-do list of things that need to be accomplished, and because there are often so many of them, they’re more aspirational than actionable.
Of course, strategic planning meetings that follow this structure usually start out with brainstorming about the pertinent issues and their potential solutions, followed by a proverbial session on why they won’t work, which eventually leads to a plan that’s largely status quo.
‘BRINGING SCIENCE TO THE ART OF STRATEGY’
The second article, “Bringing Science to the Art of Strategy,” was penned in the Harvard Business Review (HBR), and as the title suggests, it applies the scientific method to business strategy. In science, when framing a problem, an observation is made, the topic is questioned and researched, and a hypothesis is formed. The hypothesis is then tested, the data is analyzed, and conclusions are reached and reported on. This, of course, allows action to be taken on the proven hypothesis.
Notably, both articles describe methodologies that encourage teams to break with this traditional version of strategic thinking by focusing on choices rather than issues. The beauty of this approach is that it’s rooted in action.
When applying this method of thinking to a business problem, I’ve found that there are two strategic shifts. First, the spot in the process where data is analyzed can be pushed back to where the strategic choice is first considered rather than focusing on diagnosing the problem. This model encourages the formation of multiple choices, many of which may serve as the correct path for the organization to pursue.
I’m sure we all can point to decisions that were made in our work that were approached as a binary decision—either we do this or that. Typically, one of the choices catches momentum, especially when discussed in a group setting, and the outcome is essentially locked in. The actual decision on which direction is chosen is made further down in the process. By evaluating multiple choices there are options to research and debate, leading to additional rigor in the decision-making process.
My second observation is a fundamental shift from discussing and analyzing “what is true today,” to “what must be true for each strategic choice to be successful.” When applying that slight but powerful modification in thinking to a business problem, it changes the way the strategic choice is viewed and discussed. Rather than focusing on why a solution won’t work, the conversation focuses on how it could work.
So, if you reread this last sentence above with a particular business problem in mind, how does it make you feel? For me, it provides a sense of calm, or almost relief, that the problem will be discussed from a collaborative point of view. Discussing how something can work feels positive versus focusing on why a solution won’t work, which may feel combative.
Since scientific testing is a part of the model, the following steps are taken around each choice:
- Develop a list of barriers and obstacles.
- List and discuss what would have to be true for the choice to be successful.
- Conduct tests.
- Analyze data.
- Tackle the barriers and obstacles.
Through debate and collaborative discussion on each of the options, a couple of choices can be selected to perform more detailed testing and, ultimately, a decision can then be made.
BREAKING TRADITION: A TEST CASE
Recently, I commissioned a group of individuals to solve a go-to-market business problem we were having. The group was given specific instructions, indicating there were no wrong answers to the problem and no constraints to their recommendations—from marketing, sales, delivery, firm structure, etc.
Using the frameworks presented above yielded three choices. We could stay the status quo, approach the market with a product focus, or approach the situation from a client focus. The status quo option was a mix between the client and product options, and while it wasn’t considered to be valid, it served as a benchmark for comparing the other two options. The group analyzed each of the choices from the perspective of what would have to be true for the choice to be successful.
The group started out with a version of bad strategy, meaning the discussion was rooted in their own ways of positioning our solutions. Yet, as they worked through the framework, that quickly dissipated, and the ideation and strategic thinking flowed. The group ultimately recommended the choice of going to market from a client focus, as it was believed it would yield the most impact to the client and to us as a firm. Admittedly, before a final decision could be reached, certain structural barriers and obstacles had to be worked through, and further testing and data analysis was needed.
Every business decision carries consequences and risks, but a decision reached through a scientific and collaborative model mitigates risk thanks to testing and data. Further, since this type of strategic planning requires so many potential paths to success to be laid out, a solid action plan for moving forward once a decision is made should follow rather quickly.
In the end, I believe much of the time our approaches to solving problems and/or developing go-to-market solutions are weakened by the structure of our planning processes. While the alternate strategic planning options I’ve outlined aren’t new, they’re proven to be highly effective. As we navigate today’s challenges, I encourage you to explore new strategic planning options with your team. After all, at the heart of good business strategy is making choices, and at the heart of choice is focus—and focus spurs energy and growth.
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