Tuesday, August 02, 2005

Strategic Planning

As a BOD member, non-profit volunteer, and employee here at Pequot, I am often asked to attend strategic planning sessions. This post shares my observations on common pitfalls and methods for using time as a group to add value and solve real issues.

Strategic planning sessions often fail to be either strategic or helpful in planning for the future. The expense in time, energy, and dollars can be significant. And yet, often the process leaves people frustrated and unfulfilled.

Why? What to do?

In my experience, the most effective offsites benefit from utilizing a mental model or framework that bounds the discussion, defines the assumptions, and helps people with a common lexicon and method for discussing issues and deriving answers. The absence of a framework or model for decision making and discussion and the lack of a common lexicon to discuss issues results in people talking past one another and endless loops that lead nowhere.

I am always amazed how varied peoples perceptions are to issues and the degree to variance can only be overcome if a common vocabulary and framework is agreed upon. This is especially true when you bring people together from completely different functional backgrounds.

For example, I recently served on the strategic planning committee of my church. Ten very smart people, well maybe nine, were asked to come together and define a three year plan for the church and its ministries. The first few meetings were pure hell. We talked endlessly about how to organize the committee, what the deliverable would be, and others simply jumped in and attempted to solve "key" issues. We got nowhere and lost energy.

We finally saw real traction when we all read a book that provided a framework for the process - with templates, a timeline, a sample deliverable, and a model for discussing the issues at hand. As soon as we adopted the model and the associated language, context, and logic, we made amazing progress and finished in no time at all. A shared approach that defined the problem and provided a path to deriving a solution allowed the group to think as one and it provided a baseline that made each individuals contribution additive.

In business setttings, the same lessons apply. Unless people buy into a mental model or construct of how to define, discuss, and solve the problem(s), conversations are endless streams of non-sequitors and serve only to frustrate the people involved.

Accordingly, I am a firm believer in
  • defining the problem to solve
  • agreeing on a model or framework for discussing the problem and deriving a solution
    • ie defining the logic path and process that result in an answer
  • defining a timeline
  • getting team member buy-in wrt the above
Anyone else have experiences or processes wrt strategic planning worth sharing?


  1. Ha! Like you I've been involved in strategy sessions that have gone nowhere because they lacked common understanding of the terms, goals, process, framework, etc... Interestingly, one of the worst I've been involved in was at a company run by a former McKinsey consultant!
    To demonstrate how diverse strategic planning understanding is, all you have to do is ask a simple question: What is the definition of strategy?
    I've asked this question of a lot of really smart people and I'm amazed at the different answers I get. A lot of people call it a plan, others talk a lot about serving the market and then there are a few who just say that strategy is, well, strategy.
    Agreeing to a common lexicon, framework and goals are all critical to the process. I think this is why top-notch MBAs are valued highly; at the end of the day they are all taught a common strategic planning framework that investors are confident in. In other words, goals are measured by their anticipated impact on shareholder value and shareholder value is measured through a DCF (EVA, rising stock price, what-have-you).
    On the other hand you have experienced business practitioners that realize that projections aren't even worth the paper they're PowerPointed on. They use an intuitive sense developed from years of being in the business and seeing what works and fails in order to guide their decisions. Getting these professionals to communicate their implicit knowledge is a big challenge, but is also critical to strategic planning.
    This tension between professionals who know the framework and can identify highest value directions through analysis versus professionals who have done it and been there defines many strategic business planning sessions that I've been involved in. A successful planning session involves developing trust between the two groups such that experienced pros can provide data, input and guidance to the "framework" pros who can fit it into an analysis that proves value created to investors.
    Unsuccessful strategy processes usually involve a stand-off between these groups marked by conflict.
    So, I guess my recommendation would be build the trust between these two generalized groups first before actually beginning the process, otherwise you're putting the cart before the horse.

  2. Thanks for your post. You capture well the tension between analytical managers and intuitive managers. You are very right that the two approaches can be often be "oil and water" and a major source of friction.

    Your comments hit a chord. Thanks

  3. Stewart9:16 AM

    "We trained hard, but it seemed that every time we were begining to form up in teams we would be reorganised. I was to learn later in life that we tend to meet any new situation by reorganising; and a wonderful method it can be for creating an illusion of progress while producing confusion, inefficency and demoralisation."

    Petronius Arbiter
    Roman Governor of Bithynia
    AD 65

    My experience is that 'strategy' sessions are used because something isn't going right, rather than to address forward thinking ideas and promote a vision, most strategies seem to be about fire fighting.