Advice and Insights From A Practitioner

Strategic Planning ~ Needs and Requirements

Once everyone on the strategic planning team agrees on what the definitions are (and the differences between) strategy, an objective, a goal and a tactic, then energy can be directed towards strategic plan development.  There is a fine line between success and failure in planning and like any business endeavor there are basic needs and requirements that must be met before the planning process begins.

As John Wooden, the now deceased but forever inspirational Basketball Hall of Fame player and UCLA Basketball Coach said: “It isn’t what you do, but how you do it.”

As I covered in my last post and it bears repeating, in the book Making Strategy Work, Wharton School Professor Lawrence Hrebiniak, pointed out very succinctly that “strategy affects execution down the road”.   He identified four (4) underlying needs or requirements of the strategic planning process:

1)    The need for sound planning and clear, focused strategies at both the corporate and business levels.

2)    The vital importance of integrating corporate and business strategies and conducting strategic reviews.

3)    The need to define and communicate clearly the key operational components of the strategy and the measurement of execution results.

4)    The importance of understanding the demands of strategy, their effects on the development of organizational resources and capabilities, and the impact of the resources and capabilities on execution.[1]

Business strategy formulation is really tough work.  In addition to these 4 needs, I believe there are 3 basic requirements to achieve strategic planning success:

  1. Appoint a Strategic Planning Facilitator.
  2. Use a Proven Strategic Planning Framework.
  3. Anticipate Obstacles to Execution (and be prepared to meet them head-on).

Requirement #1: Appoint the Strategic Planning Facilitator

Generally, as was suggested in some of the comments received in my May 2010 blog post, it makes sense to have a champion or facilitator to guide the strategic planning process.  The role is to establish and manage the planning process and facilitate and steer deeper discussions amongst members of the strategic planning team.  A designated leader should be appointed by the CEO (or divisional leader) and he or she MUST gather as much guidance, direction and input from their superior as possible.

Requirement #2: Use a Proven Strategic Planning Framework

An effective strategic plan defines the context in which the business is operating in (the internal and external environment), the strategies to be implemented and the expected outcomes once execution takes place.

One of the keys to successful strategic planning is to use a model or framework for all to follow.  Over the years I have developed such a strategic planning framework based upon one of the key business drivers – marketing.  I call it the Strategic Marketing Plan (SMP) and it necessarily focuses on what I have identified to be the 8 profitability drivers of insurance direct marketing.  The Strategic Marketing Plan is the instrument and methodology I use for directing and coordinating the marketing and sales planning effort(s) for a given business unit and/or client insurance program.  The Strategic Marketing Plan needs to be a thoughtful, realistic, multi-dimensional plan developed for a program over the specified period (typically one year).  While my approach is geared towards insurance direct marketing, I believe it serves as a useful framework or any business that requires a strategic planning process.   Please take a look at my Recommended Format for a Strategic Marketing Plan April 2012 and let me know what you think.

In the book “Understanding Michael Porter“, the author Joan Magretta provides 5 tests of good strategy:

  1. A Unique Value Proposition – are you offering distinctive value to a chosen set of customers at the right, relative price?
  2. A Tailored Value Chain – is this thee best set of activities to deliver your value proposition which is different from the activities performed by rivals?
  3. Trade-offs – are you clear about what you won’t do so that you can deliver your kind of value most efficiently and effectively?
  4. Fit across the value chain – is the value of your activities enhanced by the other activities you perform?
  5. Continuity over time – Is there enough stability in the core of your strategy to allow your organization to get really good at what it does, to foster tailoring, trad-off and fit? [2]

Source: Understanding Michael Porter: The Essential Guide to Competition and Strategy by Joan Magretta, Chapter 7, Figuire 7: The Five Tests of Strategy, Harvard Business Review Press, Boston, MA, 2012.

Another useful tool is to create a “strategy map” that provides a visualization of the high level strategy and covers four main perspectives:

  1. Financial
  2. Customer Perspective
  3. Internal process and
  4. Learning and growth[3]

When the strategy map is combined with the balanced scorecard approach and an action plan it is truly a powerful strategic planning tool.

Requirement #3: Anticipate Obstacles to Execution

Be prepared to meet obstacle head-on, as quickly as possible.

 Source: “Crafting and Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases”, McGraw Hill, Chapter(10). by Thompson, A., Strickland, A., Gamble, J.

In the final analysis, without proper execution a business strategy is doomed and becomes a waste of resources, investment dollars, time and effort.  So, it is critical going into a strategic planning process that you also consider the inhibitors or obstacles to successful strategy execution.  Possessing this top of mind awareness helps the strategic planner in dealing with each and every obstacle encountered head-on.  For example, in the 2003 Wharton-Gartner Group Executive Survey, there were 12 Common Obstacles to effective strategy execution:

  1. Inability to manage change effectively or to overcome resistance to change.
  2. Trying to execute a strategy that conflicts with the existing power structure.
  3. Poor or inadequate information sharing between individuals and/or business units responsible for execution.
  4. Unclear communication of responsibilities and/or accountability for execution decisions and actions.
  5. Poor or vague strategy.
  6. Lack of feelings of ownership of a strategy or execution plans among key employees.
  7. Not having guidelines or a model to guide strategy-execution efforts.
  8. Lack of understanding of the role of the organizational structure and design in the execution process.
  9. Inability to generate “buy-in” or agreement on critical execution steps or actions.
  10. Lack of incentives or inappropriate incentives to support execution of objectives.
  11. Insufficient financial resources to execute the strategy.
  12. Lack of upper management support of strategy execution. [4]

Each of these obstacles represents commonly encountered threats to any strategic plan execution effort and must be addressed accordingly. While listed here as the 7th obstacle, “Not having guidelines or a model” to guide the strategy-execution efforts (per Requirement #2 above), this obstacle was cited by the executives surveyed as the second leading cause for strategic plan failure.

Please take a minute and participate in my LinkedIn poll on the subject of Obstacles to Strategy Execution.


[1] Hrebiniak, Lawrence G. Making Strategy Work – Leading Effective Execution and Change, Wharton School Publishing, Upper Saddle River, NJ. July 2005. See page 67.

[2] Magretta,Joan Understanding Michael Porter: The Essential Guide to Competition and Strategy Harvard Business Review Press, Boston, MA, 2012 . Chapter 7, Figure 7: The Five Tests of Strategy .

[3] Kaplan, Robert S. and Norton, David P. Strategy Maps – Converting  Intangible Assets into Tangible Outcomes, Harvard Business School Press, Boston, MA 2004.  See page 401 Exhibit 13-1 Northwestern Mutual Strategy Map as an example.

[4] Hrebiniak, Lawrence G. Making Strategy Work – Leading Effective Execution and Change, Wharton School Publishing, Upper Saddle River, NJ. July 2005.

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Categorised in: Accountability, Balanced Scorecard Approach, Best Practices, Bill Tyson Consulting, Bill Tyson's Blog Strategy-In-Action, Business, Business Model, Business Strategy, Change leadership, Execution, Research, Strategic Plan, Strategic Risks, Strategy, Trends

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