10 Rules for Effective Strategic Planning

Last Updated Apr 24, 2009 11:13 AM EDT

Every company runs into trouble from time to time. It's a fact of business life. No entity goes straight up and to the right and no business plan, corporate direction, or product strategy is effective in perpetuity. Things change - economy, competition, organization, technology - you name it.

When it's time to take a step back, assess the situation, and change corporate strategy, you need a critical process called strategic planning. Unfortunately, it's complex and challenging because the experience and ability to develop and manage it is hard to come by. Luckily, you've got me and my:

10 Rules for Effective Strategic Planning
  • The definition. First things first. Strategic planning is any process meant to determine a company's future direction, including its key goals, strategies for achieving them, and business plans.
  • Executive owner and facilitator. You need a member of the executive staff to own the process from start to finish, plus an objective facilitator from outside the company with expertise in this sort of thing.
  • The team. The team must be committed to participating in the entire process from start to finish. It's usually executive management. There can be additions but there's a size tradeoff: bigger equals more ideas but harder to manage.
  • Rules of engagement. The facilitator or executive owner sets ground rules or rules of engagement, i.e. attack the problem, not the person; be quiet unless you have something material to add; don't beat issues to death; no cell phones; that sort of thing.
  • The problem and process objectives. You're doing this for a reason. Agree on the problem statement and objectives of the process. You can also give it a name if that will help galvanize everyone.
  • Situation or SWOT analysis. Takes time, but it must be brutally honest and objective with no sugarcoating. If you don't know where you stand versus the competition, the entire process is a waste of incredibly valuable executive time.
  • No sacred cows. Executives get too close to and emotionally wrapped up in their groups, responsibilities, programs, and products. The team has to get beyond all the subjectivity to achieve open and honest perspective. Everything's on the table.
  • Brainstorm. Be completely open to any ideas. When they're all listed, have each person pick their top three ideas (weighted first = 3 points, second = 2 points, third = 1 point), then add it up, take the top x ideas, assign each to an exec who develops a business plan.
  • Coalesce. Present the plans, debate, coalesce on company direction, key goals, strategies, etc. Several meetings and iterations are fine, including bouncing off the next level of management and a controlled group of outsiders to get feedback (optional).
  • Plan and execute. Develop a set of plans for communicating the new direction down through the organization and externally, affecting organizational and behavioral change, product development and launch, marketing and sales, etc. The devil's in the details.
Last word: Strategic planning is a critical process that's extremely challenging and commonly botched by consultants and executives. How to avoid that? Make sure you know what you're doing.

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