In recent articles we've been looking at how to build a truly effective strategic plan for next year.
We've seen where to start; why capacity is the key component, if your strategic plan is to succeed; the most likely causes of failure (what the cool business kids call de-railers, these days); and even when no plan might be better than any plan.
To conclude this series, I'd like to point out the four most common category errors we make when setting strategic direction--those things we mistake for strategy, when they are actually something quite different:
1. Your personal brand.
A successful CEO told me just last week, "I don't do acquisitions." Well, that's good to hear, I replied, but what if an acquisition is the best strategic move for your business next year? His answer: A steely glare, accompanied by "I don't do acquisitions."
Fine. CEOs work hard to get where they are, and a certain amount of egocentricity comes with the territory. In this specific case, the issue is moot--the industry this CEO is in isn't experiencing any particularly rapid change, and his business will likely not be affected too much either way whether they do an acquisition or not. But what if it were otherwise? What if acquisitions do become important in his industry? Does his personal brand ("I don't do acquisitions") get to overrule strategic necessity?
In the past, I've had business leaders tell me "I don't do" all sorts of things--price discounting, direct-to-consumer selling, hiring incredibly good but expensive people--these are just some examples. Fine as far as it goes, but here's the thing: You don't get to enforce your prejudices on the business. You get to do what's best for the business.
Running a business isn't like practicing medicine. You don't get to say, "I'm an EN&T, I don't do broken limbs", or "I'm a heart surgeon, I don't do EN&T." If your personal preferences are that important to you, go be a consultant, and leave the business to be run by someone who will do what's best for the enterprise.
2. Mood music.
So these last two quarters panned out pretty well, and along the way you noticed that buying all the salespeople new tablets seemed to boost their productivity. So...where else can we apply that principle? The warehouse? The delivery team? The service department?
Or perhaps you saw a rise in productivity when you fired a couple of under-performers in the engineering department...so where else can we sweep clean? Or the new software you had written for the design team was an eye-opener, so perhaps the same approach would work in installation?
All of these are good questions, but they don't form a strategy. Even cobbling together a long list of mood music enhancers doesn't form a strategy. Mood music--those actions that, consistently applied, prompt success in one part of the business--are alluring, but in the end they are merely satisficers and rarely have general application throughout the organization.
3. Behavioral change.
When designing a strategic plan, one of the most alluring category errors is to turn it into a sandbox for creating behavioral change. I've seen strategic plans that were, once stripped down to their essence, essentially intended to make salespeople more productive, administrators more flexible, or managers more creative.
All well and good, except none of this is strategy. Strategy is what the productive salespeople (or the flexible administrators, or the creative managers) actually do with that productivity, flexibility and creativity.
If you have a need for behavioral change somewhere in the organization, stare it down for what it is--a hiring, training, mentoring and coaching issue. Don't confuse it with a strategic plan, which should be predicated on competence to begin with.
When I was a kid, my mum would frequently become restive--either about where we lived (we moved peripatetically from council house to council house--the UK equivalent of projects--for years), or her job. That restiveness most often showed itself in a spate of redecorating. I'd come home from school to find seemingly every piece of furniture in the house repainted, recovered and rearranged.
I see business leaders do the same. Frustrated (or just plain bored), they rearrange the furniture: an org chart redesign, new communications protocols, a refurbished mission statement--all fine things when done correctly, and at the right time, but a complete distraction when used as a proxy for a strategic plan.
So take a look at your strategic plan for 2015, and ask yourself: Is this really a strategic plan, or have I confused it with something else altogether...?
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