The Chinese character for the word 'crisis' is actually made up of two symbols: the first one means 'danger' and the other one means 'opportunity'. This concept very often applies in business, too. For every danger that presents itself, there is usually an equal amount of opportunity, and vice versa. The key to good management lies in being able recognise the dangers and capitalise on the opportunities.
I was reminded of this analogy when I was asked to facilitate at a strategic planning session for a large corporation. Their industry has been undergoing massive change and has been particularly affected by rapid advances in technology and the spectacular growth of the internet and e-commerce. This has led to a shake-out of some smaller players and a number of take-overs and mergers. Consequently, the organisation was approaching something of a crisis. The company was under threat on a number of fronts however, this destabilising chaos had also presented them with an array of interesting opportunities.
Some critical decisions had to be made. They elected to call a strategy planning meeting to decide on the best course of action to fend off the impending threats, explore the opportunities and create a plan to take the company forward into the future.
The job at hand
The meeting was attended by the board of directors and a small group of carefully selected, key staff members.
My job as meeting facilitator was to guide them through the various options and ensure they stayed on track, reaching a definite conclusion. I was also charged with making sure that the dominant personalities didn't dominate too much and everybody got their say, in a free and open exchange of ideas. (This is one of the major advantages of hiring an outsider to facilitate such meetings. A good impartial facilitator ensures the agenda doesn't get hijacked by the usual vocal minority).
An interesting point was, the company was trading along quite well. Profits were up and shareholders dividends had increased regularly every year for the last few years. So, on the surface, all appeared to be going along nicely. Strangely enough, this actually presented another potential stumbling block:
"If it ain't broke - why fix it?"
In other words, the company could simply keep on doing what it was doing and hope that the impending problems either went away or sorted themselves out.
However, despite the temptation to maintain the status quo, the CEO was astute enough to realise that if they did nothing, they would eventually come unstuck. And probably sooner rather than later. His attitude was more along the lines of:
"If it ain't broke - let's break it!"
Back in vogue
Interestingly, strategic planning is making something of a comeback. Since the GFC (Global Financial Crisis) companies have been down-sizing and re-engineering themselves to the point that there's nothing left to downsize. Strategic planning is becoming popular again as corporations try to regain their competitive advantage and come to grips with the frightening pace of technology. Companies simply can't afford to make wrong decisions in this area today and then find themselves in deep trouble three or four years down the track.
Organisations are also realising that they have to look beyond the quarterly balance sheet and crisis management solutions and start thinking more about the big picture.
Definition of strategic planning
So, what is strategic planning and how should a company go about it? Put simply:
Strategic planning determines where an organisation is going over a specific period of time and how it's going to get there.
In a nutshell, that's it. As simple as that. Furthermore, there is no right or wrong way to go about it. The methodology will vary depending upon the needs however, here are six simple steps you will find useful to make sure you cover off all the areas:
The six basic steps:
Put a system in place to frequently measure and monitor your success (or lack of it!).
How far ahead should you plan?
Five year plans used to be all the go but in today's volatile marketplace, I wouldn't recommend anymore than three years.
And remember: set your goals in concrete and your plans in sand. In other words, be prepared to redefine, lower or raise the performance objectives as you go along and make adjustments where necessary.