Strategic planning can be daunting and an uphill battle at times. Many organizations lose trust and faith in the evolving process as the future becomes reality. Yet in HBR article below, a CEO offers his perspective of how the strategic planning process is “a way of making sense of an uncertain future.” When the environment changes, your challenge as a leader is how to manage change, reset, and ensure focused yet decentralized management actions.

When looking at the actual planning process, there are variations dependent on the organization. The process can be highly structured, involving the company’s key stakeholders, or be more informal, involving other leaders at various levels in the organization who recognize a need for change. Sometimes, the activity provides clear strategic priorities and goals. At other times, planning requires an understanding of the business’ changing landscape before making changes or decisions. Planning is conducted along various horizons. Typically, there is a correlation between company size (employees, revenue, business units) and the planning horizon defined in months and years. The further the planning horizon, the increased risk in creating the wrong path to the desired end state.

Top-Down Method

A key influence on stakeholder participation is the methodology used in the planning process— particularly whether your organization uses a top-down or bottom-up  process. A top-down process assumes that those with the highest level of responsibility are in the best position to be both critical and creative thinkers and visualize, define, and describe what is best for the organization. The primary risk of this approach is that it often results in strategic plans that do not have the understanding and support of line staff (those most directly involved in executing the strategic plan).

Bottom-Up Method

On the other hand, a bottom-up planning process compiles future priorities and goals from business unit leaders, corporate functions, and supporting departments, thereby providing the opportunity for staff empowerment and investment. Such a process can produce a piecemeal plan that lacks coherence for the organization as a whole and results in an uncoordinated, even wasteful, use of resources and increases risk.

The best approach tends to be a hybrid approach that strikes a balance between the need for decisive leadership and productive collaboration, featuring the open communication of a bottom-up planning process and the clear direction of a top-down process. The net result is an effective combination of the best of both models of participation.

Organizational planning methodologies may vary based on circumstances. The CEO and senior executives may plan forward, starting with the present conditions and laying out potential decisions and actions forward in time. The CEO and senior executives may also plan in reverse, starting with the envisioned end state and working backward in time to the present.

Strategy Map – Think like an NFL Coach

A product of planning is a Strategy Map, which is a directive for future action. Visualize the large laminated double-sided document used by Head and Specialty Coaches in the NFL. CEOs must communicate their visualization of the strategic plan to facilitate those actions and tasks necessary to accomplish the strategic priorities and goals. Visualize an offensive play called into the quarterback’s headset. He relays the play in the huddle, which is then followed by decentralized initiative through blocking, passing, running routes, catching, or handing off to gain yardage for a first down. Strategic priorities and goals synchronize the future decisions and actions by leaders at all levels in the organization in time, space, and purpose.

The overarching organizational strategy serves as a foundation for which the company can rapidly adjust based on changing circumstances in execution. The measure of any organizational strategy is not whether execution occurs as planned, but whether the organizational strategy facilitates decentralized and effective actions in the face of unforeseen events and changes.

Read the following HBR article to avoid potential pitfalls.

https://hbr.org/2022/04/3-stumbling-blocks-that-get-in-the-way-of-strategic-planning

Strategic planning and mapping are critical processes to conduct with your team for long-term success and the journey is equally as important as the destination.

The Leadership & Coaching Center (LCC) provides expert facilitators and strategists to help teams prepare for the near and long-term using the LCC Six-Step Strategic Planning Process.

Contact LCC@isiwdc.com for more information.