Of course, you can’t just give your people a condescending “you did great!” plaque and call it a day. I can’t remember if my face ever decorated an “employee of the month” sign at the fast food joints I worked at in highschool, but I can say that it wouldn’t have motivated me. What would have, though, would have been having a say-so in a few of the areas where I could have contributed valuable ideas and insight.

Include Me

If you’re serious about great performance (who am I kidding- you’re reading our blog, so you must be!) then you need to be serious about taking your employees serious. OK, that might be confusing, but picture this: what’s going to engage your people better- your executive team presenting your company’s business strategy and performance management system as if you just climbed down from the mountain with them written on stone tablets, or… you taking the time to ask them their ideas, needs and wants- FIRST?

Fall is usually the season for strategic planning. So, as we roll into it we all have a powerful opportunity to actively engage our employees and include them in the planning process. It may not always be possible or even best to include everyone in actually charting the final course, BUT by asking for input on the outset, we can secure a stronger bond that makes employees feel more capable, appreciated and needed. And during unsure economic times, employee loyalty is a costly thing to ignore.

Unleash My Potential

So how can we include our employees?

• Survey your staff. Ask questions about how they see their roles, what direction they think the company should take, or what you should be doing better, or even not doing at all.
• Re-visit your company’s values and vision. While your mission shouldn’t change often, many companies find re-aligning their vision and/or values an important part of keeping their company competitive and acknowledging the changing culture of our environment.
• Sit down and chat. Managers can learn a great deal when they give employees a chance to talk openly and honestly about their every day tasks, perceived inefficiencies, or even how their performance is managed.
• Keep them posted. Let your people know exactly what stages you are in with your strategic or performance management planning process. Let everyone know who is involved, when and why. Even if you’re calling the final shots, everyone finds value in being able to shape their destiny.

Lastly, as Erica says, “helping your employees see the vision that you have for success and growth helps you work toward that goal. Organizations that have a clear direction have committed people.”

Planning is one thing, but how do you make sure your plan gets implemented? There’s a secret to executing strategy. It’s not magic, and it’s not hope. If you’re anything like me, no matter how many times you’ve called the psychic hotline, or begged the universe to accomplish your strategic initiatives, you’ve noticed that something is missing.

Well, don’t be sad. Erica has come through yet again with a fantastic, concise whiteboard video that will show you how to get your strategy done. No more guessing what will work, no more pointing fingers when your objectives fall flat- this video will give you the tools to quit relying on the plan (or the universe) alone to accomplish your vision.

Thanks for watching and as always, feedback and questions are encouraged.

• Lack of ownership: The most common reason a plan fails is lack of ownership. If people don’t have a stake and responsibility in the plan, it’ll be business as usual for all but a frustrated few.
• Lack of communication: The plan doesn’t get communicated to employees, and they don’t understand how they contribute.
• Getting mired in the day-to-day: Owners and managers, consumed by daily operating problems, lose sight of long-term goals.
• Out of the ordinary: The plan is treated as something separate and removed from the management process.
• An overwhelming plan: The goals and actions generated in the strategic planning session are too numerous because the team failed to make tough choices to eliminate non-critical actions. Employees don’t know where to begin.
• A meaningless plan: The vision, mission, and value statements are viewed as fluff and not supported by actions or don’t have employee buy-in.
• Annual strategy: Strategy is only discussed at yearly weekend retreats.
• Not considering implementation: Implementation isn’t discussed in the strategic planning process. The planning document is seen as an end in itself.
• No progress report: There’s no method to track progress, and the plan only measures what’s easy, not what’s important. No one feels any forward momentum.
• No accountability: Accountability and high visibility help drive change. This means that each measure, objective, data source, and initiative must have an owner.
• Lack of empowerment: Although accountability may provide strong motivation for improving performance, employees must also have the authority, responsibility, and tools necessary to impact relevant measures. Otherwise, they may resist involvement and ownership. It’s easier to avoid pitfalls when they’re clearly identified. Now that you know what they are, you’re more likely to jump right over them!

Want more? Hit up our article on Strategic Implementation.

But how do you ensure something so vital when by definition top management is, well, at the top? We’ve rounded up three different articles from different disciplines that attempt to tackle the issue.

From a Process-Change Management Perspective:

• Show benefits: If you can demonstrate how the approach will help the organisation and the kind of benefits you can obtain, then you will catch the attention of your Senior Managers…
• Explain the concept and how to ensure success: If you understand the concepts, then you have the knowledge to explain how [your planning process] can benefit a company and how to set up for success…
• Understand where it can help: Identifying where to run your projects is vital in any deployment and even more so in the early stages. You must pick projects which are not so easy that any attention would have solved them, or projects which are so big it would be like solving world hunger…
• Understand what motivates your Managers: If you understand the motivations of your management team then you will know what buttons to press to get the concepts accepted… more at ezinearticles

From a Communications Management Perspective:

With a firm eye on the bottom line, top management wants to see financial benefits. Yes, investment is required upfront, but in the not-so-long term, there should be savings as marketing materials are produced faster and more consistently. A challenge for communications and marketing managers is to document results and, wherever possible, show the numbers… more at Eye for Image

From a Marketing Pitch Perspective:

Be calm. Don’t try to “sell” your idea. Stick to discussing the opportunity in a calm, rational way and let the conversation flow. If your managers feel they are being sold an idea, their BS meter may go off. This could really change the direction of the discussion… more at Marketing Inspiration

You may have to try different approaches and borrow from what has worked in other organizations or disciplines, but don’t overlook this essential aspect to your plan- and don’t give up!

Yes, it’s time to break out your goals and see where you are at.

How are you doing? Do you need to step it up, or pat yourself on the back? Whatever the case, if you’ve made a plan and stuck to it, you’re doing the right thing. Now, here’s a few links to mark 2008’s half way point:

• About.com Human Resources: Second Half of the Year Day: How Are You Doing?
• The Contention Movie Reviews: Half-way there: The best and worst of the year so far
• The Tennessean: Halfway through year, Wall Street teeters on bear market
• Nascar: 2008, Half Way to the Finish
• The Beer Advocate: Best of 2008, at the Half Way Mark
• Wikipedia: Halfway, Oregon

Stay tuned for more each week here at mystrategicplan/blog!

Not smart, you say? But you can’t possibly be telling me that a sledge hammer isn’t useful- nearly everyone I know has one. They’re simple and easy to use: lift over your head and bring it down on whatever you need to “fix.” You really can’t get much simpler- and in today’s fast-paced world who has time to learn how to use another tool?

Unfortunately, this is how many businesses today approach strategic planning.

Search for “strategic planning spreadsheet excel” in Google and you’ll get 88,000 results at the time of this writing- and the first result will be an essay extolling the virtues of Excel as a strategic planning tool.

What Excel can’t do for your strategic planning process

• Excel won’t teach you the strategic planning process
• Excel won’t show you how your strategy filters down throughout your company
• Excel doesn’t create outlines
• Excel can not manage your progress
• Excel will not remind you where you’re at
• Excel will not allow you to set user permissions
• Excel isn’t available via the web for you to access night and day from anywhere (at least not the version your company uses)

In his recent post titled “the Spreadsheet Love Affair,” Dennis Howlett at ZDNet sums up some of the dangers of using Excel for uses it was not intended for:

I’ve always held the view that the spreadsheet was never designed for the sophisticated uses to which companies continue to put it. At best it is a development environment that is rarely documented because users are not trained as developers. The net result is that when things go wrong, errors are notoriously difficult to find.

If you are crafting a strategic plan, research the correct tools you should use. Excell works great in the many uses for which it was intended, but it’s no better for strategic planning than a sledgehammer is for your leaky sink.

Incidentally, a search for “sledgehammer leaky faucet” only grabs about 1,500 results; most of them jokes.

95% of businesses don’t tell their employees what their strategy is. (source: Cognos report)

Seriously. Almost every business out there. It’s information like this that makes my head hurt. So, that leads me to ask the question, why???

• Do they forget to tell them?
• Do they intend to tell them, but get distracted before sending out the email?
• Are they afraid to tell them because they might steal the info and start a competitor company?
• Maybe they’re afraid that if they gave them what they want, they won’t respect them anymore.

It’s as if instead of proposing to my wife, I had instead locked away the ring in a safety deposit box and never even mentioned it- because heaven forbid she may lose it! Ok, kidding aside- you really need to communicate your strategy to your people. Putting all the effort into crafting a strategy and then treating it like it’s a secret doesn’t help anyone.

Employees need to know what your plan is. We crave it. Unless we know the plan, how can we see that our jobs have meaning? How can we know if the company is on track? What’s to keep us from leaving to go somewhere else- somewhere that lets their people in on the company direction, and lets them know where they fit? Somewhere that’s accomplishing their objectives.

If you have a plan, get everyone in on it today. It’ll triple in value. Don’t keep it locked up. (Thanks, “Be Excellent,” for the info)

Both posts claim that there is a problem with strategic planning. They put forth the assertion that strategic planning, drawing some of its foundations from external & internal analyses which are most often focused on past performance, cannot be flexible enough to help with the present- or the future.

Both posts, to some extent, make the argument that (more…)

But what do you do about the unexpected? What if your employees find a different solution to a problem, or a more efficient way of doing things that what you planned?

Unexpected Shortcuts People Find on their Own

One thing that we have to be aware of in business is the development of Desire Paths. Desire paths are a landscaping term for the trails people wear away in the grass when they take shortcuts.

Recently, I’ve seen articles about universities and other campus-type environments where desire paths have been taken into account when they were planned. Rather than building rigid walkways and setting up fences to keep people off the grass, they intentionally omit paved routes, allowing people to create desire paths. Only then do they actually pave the paths, giving the campus a more organic look and efficient layout.

What Does that Mean for Business?

Once you’ve laid out your plan, your people may find alternate ways of implementing - shortcuts you didn’t anticipate. After the amount of work that we put into building a plan, we may be tempted to insist that people “stay off the grass,” but these desire paths could lead to even greater efficiency and better problem-solving than the processes we originally decided on.

Since employees handle the implementation of your plan, they’re the best source for finding out how it’s going. Make sure you’re getting feedback and watching for desire paths- you may be pleasantly surprised!

If you have any stories of desire paths that appeared in your implementation process, let us know!

Found via Fritinancy. Image from Kake Pugh.

Running a Strategy Review

Again, the key to keeping your focus on strategy all year is to separate the content of your strategy meetings and your operational review meetings. What many times begin as strategy-focused meetings usually atrophy throughout the year into sessions focused on putting out day-to-day fires, and we don’t want that.

So how do you run a strategy review? We’ve come up with a model, based on our experience and some of the info in the HBR article I mentioned in the last post. The main idea of the meeting is to monitor progress of the company from a strategic level and make sure that objectives are on track. This model is for a medium to large-sized company (one large enough to have a strategy officer) but could easily be scaled down to meet the needs of smaller organizations.

Purpose

• Hold leaders accountable for strategic initiatives
• Deeply investigate the strategic status of one initiative
• Focus on whether strategy implementation is on track, where problems are occurring in the implementation, why they’re happening, what actions will correct them, and who will have responsibility for achieving the targets
• Except in unusual circumstances, do not use the meeting to alter or adapt the strategy

Attendees:

• Senior Management Team
• Strategic Initiative Owners
• Functional and Planning Specialists
• Business Unit Heads
• Strategy Manager

Prep

• Strategy Reports: Prepared by Strategy Manager and broken up by strategic initiatives. Each should contain:
• Initiative Strategy Map
• Objectives & Targets: color coded by status (on schedule, behind but not needing attention, off track and requiring attention)
• If an item is off track and requiring attention, the report should include a short comment from the item’s owner explaining the performance gap and what actions are being taken or proposed to address them
• Everyone in attendance should read the report and be ready to discuss

Meeting Overview

• Status Review: Strategy manager reviews status reports
• Strategy Overview: CEO presents a quick review of color-coded strategy map, offering perspective on the business
• Review Strategy Map
• Highlight Key Issues
• Review Initiatives
• Review Measures
• Note Accomplishments (*don’t forget)
• Initiative Audit: Focus on one (or at most two) strategic initiative(s) in depth
• Initiative Assessments: Quick overviews from leaders of each strategic initiative
• Hot Topic: Allow for one operational or strategic “Hot Topic” outside the initiative
• Meeting Review: CEO summarizes the results of the meeting
• Action Log: Review new actions and responsibilities

Right-click and save the following link to download a PDF version of the strategy meeting model along with agenda.

Does that sound like you?

There’s something at work that puts business owners in this situation the world over- so don’t worry- you’re not alone. It’s a law. A law that answers why, after you’ve put so much thought and effort into charting the course, you nearly always manage to find your organization struggling to stay on track.

Good news: once you understand the law, then you can break it.

The phenomenon in question is called Gresham’s Law. Basically, it means that in many cases “bad” will drive out “good.” Originally, it was meant to explain why, in terms of currency, coins that are devalued (by defacing them or their issuer actually lowering their value) actually out circulate “good money.” The reason, as stated by the law, is that you hold on to the good money and freely give up the bad. Eventually, all everyone walks around with is bad money.

Gresham’s law also explains why so many people buy “Lemons” from used car dealers. Dealers discount lemons because they want to get rid of their worst deals quickly, and buyers feel better about paying a lower price for a lemon than a higher price for a car that might turn out to be one. So, the lemons flow through the used car lots, driving out the better vehicles in circulation.

How does this law affect you?

In the beginning of the year, your strategy meetings are focused on the long-term. Your company has just created or revised your strategic plan, set goals and objectives, and have assigned responsibility for completing them. Things are good.

But as the year progresses, instead of dealing with the long term strategy, you begin to talk about operational issues. Pressure to meet quarterly targets, problems with production, staffing issues or other fires can pop up in discussion more and more often, until they have driven out your long term strategy from the meetings altogether.

What begin the year as strategy meetings become operational meetings.

So how do you fix the problem?

You need two meetings. Strategy meetings should be focused on the long term, and operational meetings should be focused on the short. Both are important- just because you need to maintain your focus on strategy doesn’t mean those fires no longer need your attention. But both meetings require different focuses, different attendances and can be held at different frequencies.

Next post, we’ll cover the two different meetings in more detail, but in the meantime, for more detail on Gresham’s law you can hit up Wikipedia.

Link: “Harvard Business Review, January 2008: Mastering the Management System” (subscription required)

When you’re in the process of building your plan, don’t just skip right to churning out objectives and responsibilities- nothing can replace a thorough analysis of your external and internal environments. Sure, you want to be seen as a man or woman of action- you’ll get your chance. But you don’t want to ignore important events in your market like the pointy haired boss!

When you begin your external analysis, make sure you take into account external forces by doing the following…

Assess your market:

• What is happening externally and internally that will affect our company?
• Who are our customers?
• What are the strengths and weaknesses of each competitor????? (Think Competitive Advantage)
• What are the driving forces behind sales trends?
• What are important and potentially important markets?
• What is happening in the world that might affect our company?
• What does it take to be successful in this market? (List the strengths all companies need to compete successfully in this market.)

Assess your company:

• What do we do best?
• What are our company resources - assets, intellectual property, and people?
• What are our company capabilities (functions)?

Assess your competition:

• How are we different from the competition?
• What are the general market conditions of our business?
• What needs are there for our products and services?
• What are the customer-market-technology opportunities?
• What are the customer’s problems and complains with the current products and services in the industry?
• What “If only….” Statements does a customer make?

For more on External and Internal Analysis, check out our comprehensive article on the subject.

Healthy Bones

Your company’s strategic plan is more than just some business tool- it’s the skeleton of your organization. Just like your bones give you structure, you plan keeps everything attached at the right places and moving in unison. Imagine if you were missing any one of your bones (or all of them) - you’d be a mess!

If the members of your organization don’t have a great plan structuring their activities, then you may have mis-alignment of priorities. A foot attached to a chin here, an arm sticking out of your forehead- you get the picture. Anyone who wants to be able to get their organization moving in unison with strong supports needs to spend time planning.

Strong Muscles

Sure, you need your structure, but your muscles actually get you places. Think of the muscles of your organization as your action plan- execution of your strategic plan actually moves your company forward towards your goals.

So how can you give your company a work out? If you have a great strategy giving your processes and priorities structure, then the simple answer is do what the plan says. A large percentage of companies who take the time to make sure they have a plan in place never actually use it- that’s like taking a bunch of calcium to strengthen your bones and then sitting on the couch with a bag of chips instead of hitting the weights.

If you want to work out, you need to manage performance. Don’t just set goals, make sure that you follow up regularly with status meetings and performance reviews. A good rule of thumb would be look at your status (your company’s scorecard) at least monthly- otherwise you may start building a gut! At least quarterly, management should also review your plan and objectives. Think of your managers as personal trainers for your company.

It may feel awkward getting back in the gym, but give it time. Fitness is as important to your company as it is for your own body.

I love the quote, “while we were strategizing, they were doing something I believe they call ‘work’.” Not just because I’m a huge fan of air-quotes, but because that’s a really common feeling among employees who take part in strategic planning. A common thread among those involved in the process is “this sure takes a lot of meetings.”

While meetings and charts and outlines can all be necessary parts of planning and aligning your company to your corporate vision, nothing will get done if there’s no actual execution of your plan. The most common reason I encounter for why people don’t put the time in to plan is “we didn’t even do what we planned last time.”

Leaving a strategy session, you can be exhausted. There was a lot figured out, planned out and scheduled. Organizing and planning can make you feel excited about the future of your company, but don’t fall into the trap of thinking that the mission has been accomplished.

Sometimes we can hide behind our plans- they can become yet another form of procrastination. It’s easy to pour ourselves into charting the course, only to rest as soon as the planning is done, rather than getting out there and actually doing.

Remember, not one piece of your plan will be accomplished unless you execute.

• Don’t wait until the timing is perfect: The planets will not align. There will never be a perfect time to act. Begin now, even if things aren’t perfect.
• Don’t avoid the daunting tasks in your plan: Many times we procrastinate out of fear of failure. Begin working on the more difficult tasks and you’ll be surprised at how much easier it is than you expect.
• Don’t be ambiguous about success: Set a specific measure of success - if you’re worried about accomplishing it, make sure it’s set realistically. The point is, you need to know when you accomplished it.
• Don’t leave huge tasks clumped together: If a task is too large to manage, break it into smaller pieces and start one of them right away.

If you want more info, we’ve got plenty of goal setting tips in our article archives.

Sure, we want to be prepared for the New Year, but what usually ends up happening? The New Year starts before we know it. If you don’t take steps now, you could end up returning to work the first week of January, with even less direction than you had entering into the Holidays in November.

Don’t Let 2008 Catch Up on You

Ideally, once work starts back up you want to be ready to hit the ground running. If not, your competitors can gain a crucial edge over you. And you also know that planning takes work- charting the course for your future isn’t something you can just make up as you go along.

So, in the middle of the Holiday season, just before the New Year, can you really make strides towards a 2008 plan? Yes! While you probably can’t schedule an impromptu retreat for the whole board, you can set yourself up for the New Year.

Force yourself to take a break

Whether you need to add some strategic direction to your company, your division or yourself, you’re going to need to devote some real attention towards it. If you can, find an environment where you can be uninterrupted. Carve out some time in the next couple days, even if it’s just a couple hours. Turn off your cell phone, don’t check your email, and grab a pad and something to write with.

If you have a strategic plan already, evaluate how well you did in 2007. Did you hit your goals? Did you spend enough time this year focused on your plan or did it sit in a locked cabinet, waiting for the next strategic planning retreat? Are there areas you should be strengthening in your company, or opportunities that you need to hurry up and capitalize on?

Take Steps Now - Even Small Ones Count

Write out three goals for 2008. Three goals that, no matter what, you will accomplish. If you haven’t devoted enough time towards your plan in 2007 the first goal could be "Create a formal Strategic Plan by Jan 31st" in order to get a serious handle on things. Whatever you come up with, there’s no doubt that you’ll be more prepared and less stressed once the year begins. Need some help? MSP has a great goal setting tool for 2008.

The goal for all of us is to make 2008 even more successful than 07, and that starts with great planning. While this may be the most hectic time of the year, it’s also incredibly crucial since we all have the chance to set the tempo for ourselves, our office and our employees.

Here’s to a great year, from everyone at M3 Planning and MyStrategicPlan!

If
organizations fail to anticipate or prepare for fundamental changes,
they may lose valuable lead time and momentum to combat them. These
fundamental elements of business are customer expectations, employee
morale, regulatory requirements, competitive pressures, and economic
changes, and they’re always in flux. Many times businesses achieve a
level of success and then stall. Strategic planning helps you to avoid
the stall and get off the plateau you find yourself on.

High-performance
organizations have fundamental differences that set them apart from
other organizations. There are tons of studies out there that dig into
the hows and whys of companies that are ahead of the pack. But instead
of getting lost in the details and differences of these studies, take a
look at the basics.

High-performance organizations
accomplish extraordinary results, and they do it with ordinary people.
If you keep waiting for extraordinary people to come along and make
things happen, you’re going to wait a long time. Instead, your goal
should be to transform your organization in such a way that your people
are capable of delivering high performance every minute and every hour
of every day.

Becoming the best at something is often
achieved by modeling the behaviors of winners and putting those
behaviors into practice. Consider the following characteristics of a
high-performance company:

• Has a purpose that focuses the energy of all its staff (typically, that purpose is to be the best there is or ever was)
• Simultaneously and continuously maximizes the self-interests of all its stakeholders
• Outperforms all others (by any measure) not because of what propels it, but in spite of any and all obstacles that impede it
• Makes it possible for ordinary people to perform in an extraordinary fashion
• Transforms its people into owners of the organization’s destiny
• Is a healthy organization committed to being great, no matter what it takes
• Knows that the execution is more important than the strategy

We’ve
said it before, and it bears repeating: A strategic plan is the means.
Growth and high-performance are the end to those means.

* Bain & Company’s 2006 Management Tools survey

But
there are also a number of smaller scenarios that may hit closer to
home than the "big what ifs". Calling these smaller scenarios is a bit
of a misnomer because when they happen, they can happen quickly and
with devastating consequences, so they don’t seem too small. Consider,
for example, any of the following:

• What if sales are flat this year or if sales decline by 20 or 30 percent?
  The nation’s leading luxury home building company, Toll Brothers,
  recently reported that sales declined 21% during second quarter with
  "hesitant customers remaining on the sidelines".
• What if sales increase rapidly, such as 25 percent or more? One local tech company is growing faster than they can fill positions to meet customer demands.
• What if accounts receivable collections slow by an additional 30 days?
  Like a local manufacturer that experienced significant problems with
  his customers, making it very difficult to pay his suppliers.
• What if banks increase interest rates by several percentage points?
  Nevada has held one of the highest foreclosure rates in the nation over
  the past four months - 1 of every 232 households. This has a huge
  ripple effect for numerous industries.
• What if our biggest customer goes out of business or if we lose our biggest client? Most every business has a handful of key accounts that are critical to business success.
• What if we have a major public relations crisis such as a bad product or a lawsuit? These are crises that often come out of nowhere and could happen to any business or organization.

Stepping into your future
Okay, so now that we’ve caught your attention maybe you’re ready to
consider some "what ifs" of your own. Here are the steps for running
your own scenario planning. One suggestion - this exercise need not be
exhaustive. Begin by identifying the risks from the list of big
"what-ifs" and smaller "what-ifs" and create a one-sheet for a few
realistic, possible scenarios that your organization might face in the
next few years.

1. Define a timeframe for each scenario. Some events may occur in 20 years, some in two. But you can’t work with indefinite, open-ended scenarios.
2. Establish the primary variable in your scenarios. Assess ways in which these variables may present opportunities or threats to your business.
3. Clearly articulate the scenario with a problem statement.
   On a white board, write down "What if _____?" and fill in the blank.
   For example, "What if we lose our biggest client this year, resulting
   in a 50 percent decrease in revenue? Or what if new housing starts
   decrease this year by 20%?
4. Flesh out the details of the scenario. Clarify exactly the situation your company would be in.
5. Develop a trigger point and an action plan if the scenario in Step 5 should occur. Know
   when to execute the action plan by having a clear trigger point. Then
   detail the top five steps you will take in the effect the trigger
   occurs. These are designed to work regardless of how the future turns
   out.

Many of these choices otherwise go
unnoticed if you focus obsessively on your organization’s present-day
situation. With scenario planning, you’re imagining not just one, but a
variety of future possibilities. All the great opportunities in the
world aren’t enough unless you have contingencies in place. And
remember, you’re not only preparing for unexpected threats but also
trying to foresee unanticipated opportunities.

It
is human nature to ignore the bad news rather than pay attention to it.
Whether you think you are immune to this slow down or not, consider the
ramifications of disregarding such an economic change. Wouldn’t you
sleep better if you had a clear idea how to mitigate real risks in your
business operations? One way to lessen the uncertainty of the present
is to plan for the future; have the courage to imagine the worst that
could happen and how you would handle it. A scenario plan will help you
do just that.

Scenario Planning: What If . . . ?
Scenario planning is a way of simplifying a complex future by providing
you the opportunity to ask the "what if" questions and to rehearse how
you may respond should a certain event or trend happen in the future.

Scenario planning was first developed and used by
the U.S. Air Force during World War II and gained acknowledgement in
the business world when Shell Oil utilized scenario planning techniques
to predict the oil crisis of the 1970s. For organizations, scenario
planning provides an invaluable opportunity to have a strategic
discussion around key drivers and critical uncertainties in your
operating environment.

Thinking about the BIG what ifs . . .
The most significant trends likely to affect the larger world are those forces that are the "big" what ifs - the driving forces. These cases tend to push your thinking and are usually classified as the big unknowns. The forces generally come in four flavors:

• Social dynamics: This area includes specific demographic issues such as how influential youth might be in ten years, the growth of the Hispanic community, the tight labor market and the aging baby boomer generation.
• Economic issues: Macroeconomic trends and forces shape the economy as a whole, such as those headlines about the credit market, the bond market and the local housing market.
• Political issues: Outcomes of legislative sessions can impact local businesses as government cuts back on spending due to lower sales tax receipts. Legislative changes can affect tax policies, regulatory issues, employment laws and the like.
• Technological issues: The key trends identified by research firm Gartner include mobile computing, change in telephony, the tight IT job market, business process outsourcing, and regulatory compliance issues.

Identifying which of the big what ifs might impact your firm is the key to scenario
planning for these forces. Some of these may seem farfetched, while
others are quite a bit more likely. Consider, for example, how lenders
have been raising requirements for home loans following the flood of
defaults and late payments on homes purchased with subprime mortgages.
This, combined with still falling prices across most of the US, has
deterred home buyers, leading to a string of poor results and losses
for major US homebuilders. Home ownership rates directly correlate to
the economy and facilitate economic growth. Without economic growth,
sales tax revenue decreases and results in less funding for government
agencies. As a result, a lot of local governments have not increased
spending which affects everyone with a government contract and impacts
the quality of services delivered by the agencies.

In addition to these "big" what ifs, there are also a number of smaller
scenarios that may also hit close to home. We’ll discuss those more in
detail next time in this column when we continue our discussion on
scenario planning.

Monthly strategy meetings don’t need to take a lot of time –
30 to 60 minutes should suffice. But it is important that key team members
report on their progress towards the goals they are responsible for - including
reporting on metrics in the scorecard they have been assigned. By using the
measurements already established, it’s easy to make course corrections if
necessary. Restricting the meeting to this reporting on measurements can help
you stay on task and keep the meeting with 30 minutes, but if you can commit to
a full hour, the meeting agenda should also include some time devoted to
working on one specific topic or on one of the quarter’s priorities where
decisions need to be made. Once agreed upon, this topic should be developed to
conclusion.

Consider these additional tips for making your monthly
strategy meetings more effective:

• Schedule the monthly strategy meetings on the same day and time each month in order to encourage making strategy a habit
• Invite individuals or heads of departments. Their presence creates visibility and recognition for the people getting things done.
• Make the meeting mandatory – no exceptions. This is 30-60 minutes time well spent
• Start and end on time and stay on task with an agenda.

Holding
meetings helps focus your goals on accomplishing top priorities and
accelerating growth of the organization. Although the meeting structure is
relatively simple, it does require a high degree of discipline. Facilitation of
monthly strategy meetings is key to implementing your strategic plan and making
strategy a habit for everyone involved.