J. Peter Duncan

Planning is Dead? Long Live Planning!

 

That concept, vision, destination...provides the sense of direction and purpose for an enterprise. With steady focus on what it intends to become over the next several years, a company can set about working out the details of what it has to do to arrive at that destination in a timely and profitable fashion given the competitive environment it faces.

AOL is an example of a company that has had both a clear vision of a market need and strong execution of a plan to realize its destiny. Not being inside AOL, one can only speculate, but from all appearances AOL has had a very consistent vision of what they intend to become, a content provider via the Internet. To get there it had to go through many stages of development: building a killer application, assembling a network, attracting initial customers, developing proprietary content, upgrading service, forming alliances for more content, dropping the price to build the customer base, divesting of the network to get more customers and content, acquiring Time-Warner. True to its stated vision, AOL has executed each stage well and succeeded at becoming the top provider of consumer content via the Internet. Whether this was the best strategy can only be judged over time, but it certainly has been a strategy that has exploited the opportunity provided by the market allowing AOL to soar to be one of the most admired companies of the last five years.

Like AOL, every business needs more than just a concept of a market need. This is not just for the New Economy companies. They are just the most recent and obvious under-performing that I could pick on. But all businesses need to develop a clear approach as to how they will innovate and create value for customers and in turn for the shareholders. This is the tough part because there are so many variables to sort out and choices to make. At the most fundamental level each business must wrestle with some key questions:

What are you going to sell?
Who are you going to sell it to?
How do you beat or avoid the competition?

And these must be answered in the context of generating sustainable growth and profits to ensure long term survival and success. Call it what you will, we call it Simplified Strategic Planning, every company needs a clear approach or process for sorting out these kinds of questions. The essential elements include:

  • critical thinking about current situation and recent past
  • a cauldron for debate to formulate shared assumptions about the future
  • analysis to gauge impact of assumptions on our business
  • creativity and innovation to develop response to a changing environment
  • leadership and decision making to build consensus for solution
  • objectives and action to bring vision to fruition

Far from being dead, strategizing, planning, thinking critically about your business and making a plan to realize your vision is an essential element that powers all successful business save those that thrive on luck alone.

Today it is easy to see what happened in the twilight of the 1990' s. Hindsight is 20/20. Some of the most " sage" advice emerges from the pundits on Monday morning after the big game; just when it is too late to use it for profit.

And so it is not my point to try to second-guess what has been...some strategies were " right," that is they brought success, whereas others did not. That will always be true. I don' t know anyone who can call it right 100% of the time...but win or lose, those who are in the game get to play. Those in the game control their destiny and can improve their lot in life. Those who do not play can only hope to be lucky...not a bad thing, but with it comes its counterpoint, " bad luck" and the odds of getting it will exactly counterbalance good luck over the long haul.

But if dint of effort can shift the balance in your favor, even just slightly, then compounding that success over the long haul will separate a winner from the pack. And that is the reason that strategic planning (or whatever you choose to call it) not only makes sense, but is an essential element of business success.

So let' s test the quality of the strategic thinking on your management team. We start with a five question quiz. Give each manager a blank sheet of paper. Looking out three years ask each team member to answer the following questions in at least 10, but no more than 20 words. Five minute time limit...ready, GO!

  1. What is the basic need in the market place that your company will fill?
  2. What are you going to sell?
  3. Who are you going to sell it to?
  4. How will you fill the market need better than anyone else?
  5. What talents should you build to beat or avoid the competition?

Now compare answers...how close are they? Did anyone draw a blank? These are pretty fundamental questions, so you would hope for good consistency and completeness across the top management team of a company...but more often than not this is not the case. How do you think some of the dot-coms that have gone belly up would have fared on this test?

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