What is a Strategic Marketing Plan?

When we talk about "strategic planning", there are actually many different types of plans that fall under this rubric. Typically we are speaking of an organizational plan, a "strategic business plan" that is an over-arching plan that supercedes all others. In reality, there may be many strategic plans within an organization and all of them must align with one another. An Information Technology strategic plan, for example, exists to provide detail and departmental responsibility to execution of initiatives that may or may not be listed in the organization's strategic plan.

Depending on the organization, marketing related issues may comprise 78-80% of the master strategic plan. So, why have a specific strategic marketing plan when most of it is covered under the strategic business plan already?

The first reason is that many organizations do not have a strategic business plan and that a strategic marketing plan is all they can muster to complete. Certainly this is better than nothing, but it may leave out critical elements of the organization's operations that are needed to support marketing in some way or another be it manufacturing, quality management, human resources, or information technology.

A second reason for a dedicated strategic marketing plan is that there is a need for greater detail than is appropriate in a strategic business plan. A business plan does not need, for example, to have a detailed media advertising plan as a part of its contents. Rather than high-level objectives, there is a need for specific product research, competitive analysis, research and development, etc. The strategic marketing plan can focus holistically on the Five P's of Marketing: Product, Placement, Price, Promotion and People.

All Strategic Plans have some things in common. All strategic plans need some kind of Mission/Vision/Values statements to define what the purpose of the effort is, what values guide it and what it wants to achieve. Your plan may not call it "mission, vision and values", but it should have these things documented. Often these fundamental elements are assumed, to the detriment of the organization.

Objectives and Strategies: After your MVV, you need to determine your prioritized objectives (what you want to accomplish) and strategies (how you are going to accomplish them.) But before you come up with your objectives and strategies, you need to do some homework. This homework is one of the major differences between a strategic marketing plan and a strategic business plan.

What are the steps to effective performance measurement?

Effective performance measurement is the cornerstone of successfully executing organizational change, and yet, many companies do not have effective performance measurement programs. There are many reasons for this ranging from a lack of buy-in to misperceptions about the use of metrics to the belief that all important factors cannot really be measured.

The first thing to keep in mind is that all measurement is for the purpose of executing change. You want something to happen so you develop a plan and as a part of that plan you decide what the Key Performance Metrics are that demonstrate successful execution of the plan. People struggle with metrics because it is hard work. It's one thing to come up with a set of objectives and strategies in a brainstorming meeting, but quite another to dig down deep and determine what it really means to successfully accomplish what you've set out to do. Typically goals are vague and metrics are specific. It's a lot easier to be vague!

The first step in a performance measurement program is to figure out your "critical questions." Start by asking questions about what you want to accomplish. Try using the Toyota method of "five whys". Keep asking "why" until you get to a root answer. This is what Socrates did in ancient Greece. The effect of his questioning was that he was not often very popular. People were shown to have little understanding of the fundamentals underlying their assumptions. Socratic dialogue is a great way to discover what you really need to measure.

The critical questions ultimately lead to which metrics you will choose for your effort. Remember to measure only the critical elements because each measurement takes time and costs your organization and the more metrics you collect, the more chance you run of diluting the importance of each measure.

The next step is to develop a process for measurement. Who will do the measuring? How often? In what medium will the data be stored? What quality measures will be put into place to ensure the data collection is good? Are there metrics already being captured by other processes or automated systems that can be used? How do your information systems talk to one another? Can the data be updated automatically and fed into a dashboard?

So now you've decided what to measure, how to measure it and where to store it. The next step is to develop a dashboard or other methodology for reporting your metrics. The objectives are to deliver clean information in a format that communicates trends, "normal" ranges and variations, benchmarks, targets and current values. The best dashboards are automatically updated and can present information in real time. For many organizations an Excel spreadsheet posted on an Intranet once a month is sufficient. Part of your reporting process will be to determine how to present your information, to whom the information will be presented and how often it should be updated.

Periodic Review: Strategic plans rarely go exactly as planned. There are infinite environmental variables that will change during the course of plan execution and it is necessary to review results and adjust the plan on a regular basis. This could be daily in some cases, weekly in others, monthly or quarterly. I would recommend at least monthly updates because if too much time elapses between meetings, the initiative can go way off course or worse, momentum can be lost. Regular reporting and review ensures that everyone is aware of accountability and their role in the success of the project.

Iteration: One of the functions of the periodic review is to ensure that targets are being met, but sometimes a mid-course trend analysis might show that the beginning of the year targets are no longer relevant. There may be game-changing events that require immediate strategic revision and iteration of the strategy. The iterative process is a continuous improvement based on execution, test, review, revision and execution of the new strategy. The iterative process acknowledges that information is imperfect during the planning process and that it is impossible to predict the future. Organizations that practice iteration are quick to respond to changes in the situation and adjust to maintain or gain competitive advantage.

Metrics work hand in hand with scenario planning when metrics are used as "triggers" to implement a scenario plan. The time to review scenario plans is during these regular metric review meetings.

Care and Feeding of your SWOT

A SWOT analysis can take many forms. A simple SWOT analysis might be a simple grid with four boxes into which the strategic planners will record the organizations' Strengths, Weaknesses, Opportunities and Threats. This can provide a planning team with a framework to facilitate gathering their impressions and viewpoints on these areas. The SWOT is an activity best accomplished PRIOR to establishment of Objectives and Strategies, so that the results of the SWOT can be taken into account when creating a vision for the organization's future.

The dilemma with using a SWOT in this fashion is that although it can be quick and easy and provides a framework for discussion, it is shallow and may serve to perpetuate organizational myths and assumptions which may themselves be a threat.

A principle of strategic planning is that the process should serve to get people to question assumptions, to broaden their vision and to think outside of the box. If the SWOT is a casual endeavour, then the team does not benefit from new information.

There are several tools which can be used to gather information in advance of the facilitated strategic planning session in order to bring new information that may shock and surprise planners out of complacency. The number of tools and the depth to which they are applied is best decided by the planning team and will depend on time and budget constraints as well as the organizations' overall commitment to the strategic planning process.

Many organizations use these tools as stand-alone tools to gauge market competition, trends and strategic opportunities. When they are used in the context of strategic planning, there is a holistic benefit in that the planning team can benefit from understanding trends and information from many areas of the internal and external operations of the organization.

There are many tools available to strategic planners, many of which are listed below (December 29, 2009 post). Strategic planners often list SWOT as a tool along with the others, but our idea is that SWOT is a framework in which to organize the inputs of the other tools, such that an environment for educated thinking is created.

In general, the tools can be separated into internal and external analysis tools. Similarly, the Strengths and Weaknesses blocks of the SWOT are often considered to be internal and the Opportunities and Threats quadrants are considered external. This distinction can be useful in determining which tools will populate which quadrants of the SWOT analysis.

Existing Conditions: Internal/External

Metrics: profit, sales, retention, staff attitudes

Porters' Five Forces

Benchmarks and benchmark trends

Balanced Scorecard

STEEP, PESTLE, TOWS

Surveys: staff, management, customers, suppliers, competition, channel partners

Six More Barriers to Strategic Plan Execution

The next list from HBR is the six mistakes that can derail your attempts to change. Thanks to Reynolds Consulting for this (and their comments embedded.)

1. Cautious management culture. In my work I have found that the vast majority of things that hold companies back from change is their current business model and belief systems–internal factors within their control. You can change if you want to.
2. Business as ususal process management. If business is at full capacity where do you find the resource to change? Start a stop doing list and keep track of all the things you do that don’t add value–keep it posted and add to it regularly and watch it grow! That alone is a great source of opportunity to re-allocate old to the new!
3. Initiative Gridlock. It is important to identify how many initiatives you can reasonably do with your resources and do a few really well then a whole bunch marginally.
4. Recalcitrant Executives. Nooo! Nobody we know has that problem, right? I have often said if you aren’t part of the solution you are part of the problem. Executives have to manage that aggressively. It is their job to run interference for the people in the organization that have to get the job done so all can be held accountable.
5. Disengaged Employees: Ditto above except…it is really important to ensure they understand what is expected of them, get the chance to have early wins and feel they are doing valuable work. When that happens disengaged employees are rare.
6. Loss of focus during execution. Communication is a tool that can never be underestimated. It is often stated that it takes at least 7 times before someone really hears a message. Executives often think they have communicated until they are blue in the face–but you cannot overcommunicate—keep the end game visible, make the steps clear, help people focus on the current one, make successes important, and keep the conversation lively!

Strategic Planning Tools

There are many, many strategic planning and process tools which may be applied to the strategic planning process. I am a fan of the LinkedIn group "Corporate Planning & Global Industry Segmentation." Earlier this year there was a discussion about strategic planning tools and once everyone had weighed in, the following list was the result.

I have three observations about the list.

The first is "wow", this is a great resource. Strategic Scenarios has a toolbox of approximately 24 tools we apply to specific problem areas, but this is far more comprehensive.

The second is, "where is scenario planning?" If I were to prioritize strategic planning tools, there are a few that need to fall into the top five tools and these would be SWOT, Metrics, Scenario Planning, Alignment (Individual Action Planning) and resource planning. These are the tools that support the creation and execution of the organization's Mission, vision, values, objectives and strategies (the traditional elements of a strategic plan). Scenario planning adds to strategic planning in several ways:

1) It serves as a way to flesh out the objectives in such a way that the planning team can think more holistically about what strategies to apply.

2) It serves as an advanced risk management tool; by putting risks and opportunities into a story format and developing alternative scenarios in various risk situations.

3) The development of alternative scenarios keeps the organization from thinking that there is a single future reality. In fact, the future is unpredictable and scenario planning provides a way to plan for many alternative futures and be prepared for them.

4) Scenario planning serves as a "test" for the objectives and strategies set by the planning team. By playing out how the objectives and strategies will look in a story format, planners can perform "what-if" scenarios with business outcomes in narrative format, just like they can model financial results on an Excel spreadsheet.

5) Finally, scenarios help teams to break out of "the way we've been doing it in the past" and to challenge themselves with alternative futures that take advantage of opportunities. A good scenario development process will foster creative thinking and innovation within an organization and help them break out of the box of organizational inertia.

The third observation is that strategic planning tools are only as good as the people using them. Just like a carpenter knows which tools to use in which situations, and how to skillfully apply the tool to the construction process, strategic planners need to know which tools to apply and how to effectively apply them to achieve organizational performance. Applying too many or too few tools could result in less effective planning process.

◦ 23 Ps for strategy - see Rex Buckingham
◦ 5 Ps for strategy
◦ Ansoff matrix
◦ Art of Quantum Planning - see Gerald Harris
◦ Art of the Long View see Peter Schwartz (scenario planning)
◦ Art of War - see Sun Tzu
◦ B.C.G. matrix Analysis - see Boston Consulting Group
◦ Balanced Scorecard - see Robert S. Kaplan and David P. Norton
◦ Barriers and profitability
◦ Blue Ocean Strategy - see Prof W Chan Kim & Renée Mauborgne
◦ Chaos theory
◦ Competitive Advantage / Holistic Corporate Planning - see Porter
◦ Charting Your Company's Future by Kim & Mauborgne
◦ Company position / industry attractiveness screen
◦ Contrasting characteristics of upstream / downstream companies
◦ Crafting Strategy - see Henry Mintzberg
◦ Crossing the Chasm - see Geoffrey Moore
◦ Cultural web
◦ Discipline of Market Leaders - see Treacy/Wiersema
◦ Dynamics of paradigm change
◦ Enterprise Process Management
◦ EPISTEL - Environment, Political, Informatic, Social, Technological,
. . Economic and Legal
◦ Five Forces - see Michael Porter
◦ Force Field Analysis
◦ Four organizational cultures
◦ Four routes to strategic advantage
◦ GE-McKinsey matrix
◦ Geo-business model
◦ Integrated Business Planning using mathematical representations
◦ Integrated model of strategic management
◦ Leadership decision making model
◦ Management By Walking Around
◦ Mapping the Market, Segment by Segment
◦ McKinsey 7S Framework - see McKinsey & Company
◦ M-O-S-T
◦ Network analysis, PERT, CPA
◦ Nine Forces (Porter's Five Forces plus STEEP/PEST)
◦ Organic versus mechanistic management styles
◦ Patterns of strategic change
◦ PEST Analysis - Political, Economic, Social & Technolog'l analysis
◦ Porters Diamond
◦ Reengineering - see Michael Hammer and James Champy
◦ Related diversification grid
◦ Resource allocation at corporate level
◦ Spider Web Graphs
◦ STEER - Socio-cultural, Technological, Economic, Ecological &
. .Regulatory factors
◦ Strategic Game Board by McKinsey & Co
◦ Strategic triangle
◦ SWOT - Strengths, Weaknesses, Opportunities & Threats
◦ Third generation balanced scorecard
◦ Three Growth Horizons by Mehrdad Baghai
◦ Total Customer Service profit chain
◦ Total Quality Management (TQM)
◦ Toyota Management System / Production System (Hoshin Kanri)
◦ Value Chain models - see Michael Porter
◦ Winning in Fast Time - see Jack Warden

My strategy = your tactics

For all the use of the terms "strategy" and "tactics", there is a predictable debate about which are the strategies and which are the tactics. Using the dictionary to understand the meanings of these words will not likely help in this debate, because the dictionary will simply reinforce what we already believed these terms to mean, while leaving the specifics of our situation unaddressed.

How could two people, working in the same company, be unclear about which are the strategies and which are the tactics?

The answer is that the difference between strategy and tactics is a matter of perspective.

For example: Let's imagine a strategic planning session in which the CEO establishes an Objective for the organization that Knowledge Sharing should be formalized within the organization. The strategy, he says, will be to build a Knowledge Portal. From the CEO's point of view, AND from the point of view of the organization's strategic plan, the strategy is to build a Knowledge Portal. The Objective to formalize knowledge sharing is the "what" and the Strategy to build a Knowledge Portal is the "how". The CEO does not concern him/herself with the tactics of how the Knowledge Portal gets built and, appropriately, the tactics are assigned to the CIO.

The next day, the CIO meets with his/her team and says, "We have a new objective. We need to build a Knowledge Portal." What will our strategy be?" The team researches the options and decides that their strategy will be to build a Microsoft SharePoint Portal server. They develop a project plan with their tactics including acquisition of server hardware, training, software, installation, configuration, establishment of standards, etc. The CIO does not concern him/herself with the tactics of installing the software and, appropriately, the tactics are assigned to the Project Manager.

The Project Manager meets with his/her team and says our objective is to build a Microsoft SharePoint Portal site. He/she assigns a team member with the objective of acquiring a server. This team member's strategy will be to research the requirements for Microsoft SharePoint, anticipated storage needs, company standards, project budget guidelines, etc. , and submit a purchase order for the best machine that fits those criteria.

This food chain of objective, strategy and tactic is passed down the organization. The strategy at each level is the tactic of the level above. The same words are used and yet, they are applied to different actions. In a well run organization, each of these objective, strategy, tactic sets will be aligned with one another, so that the person with the screwdriver installing a box into a server rack understands how this task aligns with the CEO's objective to formalize knowledge sharing within the organization.

A comprehensive, performance based, strategic planning process understands this relativity of strategy and tactics. When we talk about an organization's strategies, we are always talking about the strategies at the organizational level. When we follow-up with the alignment and individual action planning phase of executing the strategic plan, each person's actions will fill out the chain from strategy to execution. The combination of strategy and tactics, with clearly measurable outcomes and well defined responsibilities is how an organization ensures that organizational objectives are successfully executed.

Gut vs. Analysis

I keep hearing that strategic planning is not necessary because you can just run things "from the gut". There may be something to that, in some circumstances, depending on what you mean by "from the gut."

If "from the gut" means that someone is planning in a non-formal process using many, many years of experience, using the same methods that they have used in the past, then this may be a satisfactory planning method, providing that nothing changes and the organization can continue with business as usual.

Malcolm Gladwell's "Outliers" describes how, after 10,000 hours of experience, someone gains sufficient expertise at something that they can begin to manage intuitively, without need for recourse to stodgy planning tools. Once someone has logged their 10,000 hours, then you might argue that they're not really planning "from the gut" at all, but rather through a synthesis of thousands or even millions of data points that they have experienced over that time. 10,000 hours of experience provides sufficient variation in situations that someone can recognize a wide variety of patterns and know what has resulted from a wide variety of actions.

There are (at least) three major problems with leading "from the gut".

The first is that those who lead from the gut rarely communicate their plans effectively throughout an organization. One of the benefits of a formal strategic planning process is that the strategies, tactics, measures and responsibilities are written down for all to see. When the plan is documented and clearly communicated throughout the organization, we're much more likely to see alignment in which everyone is working together towards common goals. The alternative is a relatively anarchistic environment with everyone pursuing their own version of "how we've done it in the past." This kind of haphazard leadership style may work in a smaller organization where "leadership by osmosis" can occur, but it will likely fail in a larger, more complex organization where everyone does not get direct access to the top leadership.

The second big problem with leading from the gut is that "stuff happens." There are impacts on the organization both from inside and outside that can wreak havoc with the casual plan. When planning from the gut, there is rarely a scenario planning exercise, risk analysis, alternative scenarios or research to understand leading indicators that would provide the organization with a warning when trends impact their industry either positively or negatively. This means that the casually run organization is both at a greater risk from outside forces, and also is less able to take advantage of new opportunities.

The third challenge with leading from the gut is that managing from the gut works well in situations where there is little complexity, but when organizations get bigger and where social, technological, environmental, economic or political changes are dynamic, the gut is no longer effective. There is simply too much complexity for even a genius with 10,000+ hours of experience to synthesize informally. Unfortunately some managers get away with managing from the gut for a long time and therefore believe that it will continue to serve them well in the future. As situations become increasingly complex, the gut approach ultimately fails, collapsing under the weight of unanticipated outcomes.

Those who manage from the gut may have been successful using this methodology in the past, but ultimately it is a lazy and ineffective way of managing and leading an organization. Utilizing a formalized system that both takes advantage of the leaders' experience and also follows a process that includes communication, alignment, consideration of risks and alternative scenarios, and clearly documents responsibilities and measures of success will win out over the gut system. Surveys show that companies that use a formalized strategic planning process are 70% more successful than those who do not.