Saturday, November 14, 2009

Things Change

One common complaint about strategic planning is that as soon as you start to execute the plan, things change and your plan is no longer valid. The argument goes that since things change and you cannot predict the future, that there is no sense in planning at all.

This could not be farther from the truth. In fact, it is because of the fact that things change, and change quickly, that planning is more necessary than ever.

If things never changed, then it would be satisfactory to continue ahead without a need for strategic planning. Simply staying the course of previous success would virtually guarantee future success.

The key to successful execution of a strategic plan is that the plan is continuously reviewed and updated on a regular schedule. While this schedule will vary for every organization, it might consist of monthly metric reporting, quarterly review and update, annual action plan update, annual strategic plan update and complete strategic plan re-write every 3-5 years.

Another success factor in executing strategic plans is to include scenario development as a part of the strategic planning process. In scenario planning the team selects the key challenges that lie ahead for the organization. For each of these challenges, the team develops three or four "scenarios" or vignettes that describe what the world would look like under different circumstances, depending on how things changed in the future.

Drivers of change are identified for each scenario in order to help identify what forces (social, technological, economic, environmental or political/regulatory) will impact the organization. The team identifies current trends and makes projections for the various scenarios. A "story" is developed for each scenario and the team outlines which strategies they would use to react to the circumstances for each story. When all of the stories, drivers of change and strategies have been developed, then the team may look through them to determine whether there are factors common to all or most of the stories. They may choose to implement those strategies in their strategic plan. The team may elect to choose a "most likely scenario to occur" and plan for that scenario. If and when that situation does not come about, then the team is prepared for the alternatives with their backup plans. In this way, the organization has considered many of the risks and trends before the scenarios occur, thus making them more nimble in reacting to change and more comprehensive in understanding and protecting themselves from risks.

Scenario planning puts planning teams into a strategic thinking mode before they actually dig into strategic planning. By working in this way, the team thinks outside of the box of collective organizational assumptions and considers the real and potential threats and opportunities for the organization. This process serves to break teams out of continuing business as usual and encourages innovative, future based thinking.

The final issue regarding change and strategic planning is that organizations that do not actively engage in strategic planning are in a reactive mode, responding to changes that occur as they happen. Organizations that actively plan for the future CREATE their own futures and make them happen, rather than waiting for the future to happen to them. It is far better to respond to change that you have created that brings about your organizations' vision than responding to the actions of others.