Demystifying strategic planning (part 2)

Welcome back to our series on strategic planning. In the previous post, we explored the essence of "strategy." Now, let's take the next step and delve into transforming that strategy into a concrete plan for your business—a blueprint that empowers your team to take coordinated action.

Remember, this strategic plan is just one piece of your overall business planning; you might also have marketing, hiring, and production plans, for example. The strategic plan helps bring your overarching strategy to life. It encompasses and coordinates changes across various facets of your business, driven by the three crucial elements of strategy: diagnosing the situation, outlining an overarching approach, and devising a coherent set of actions.

Treat your strategy as a hypothesis that will inform experiments, as opposed to an ironclad set of steps. You don’t know if your hypothesis is right, but you can use it to inform what to do first, and establish reflection points at regular intervals to build the organization’s understanding of what works and what doesn’t as you go.

Choose a time period for which to distill your grand scheme into a more concrete and actionable increment of progress. While larger corporations often create 3-year plans, if you're new to this, consider starting small—what would need to be true in the next 3 months? Envision that day; what would the world look like, what would you be doing, and how would you measure success? This sets the stage for effective reflection, allowing you to gauge your strategy's effectiveness and make necessary adjustments.

In this process, the leader's role is paramount. You must translate a complex and broad-reaching strategy into less daunting objectives over time and across teams. Set a clear direction on the “what” (i.e. end state), leaving room for those closer to the problem to determine the "how" (i.e. tasks to get there). For instance, if your strategy involves increasing capacity, in one quarter you might challenge the operations director to boost productivity in Plant A by 7%, and task the supply chain and real estate managers with finding the ideal region for Plant B. You may personally need to take on the most painful decisions, like cancelling an underperforming product line to make way for faster-turning product. The proximate objective should be feasible, even if the exact path isn't clear from the start.

Identify the singular breakthrough priority for the organization within a specific timeframe, avoiding the pitfall of overloading teams with several “top priority” initiatives that will compete for time and attention. It is all too common for companies to create a “prioritized list” that includes numerous projects that must be moved forward simultaneously, which will then bottleneck in shared departments. This is why the real task of prioritization often falls to, say, the IT department, who shouldn’t have to make these strategic choices on their own. Do fewer things, so you can actually finish them.

Craft these plans collaboratively. Engage your teams in an ongoing dialogue, sharing your evolving direction, and inviting questions and ideas. Encourage debate, clarify assumptions, and look for blindspots as you refine the plan over time. This iterative process (called “catchball” in Lean terminology) not only strengthens the plan but also builds team buy-in. However, be cautious not to dilute the strategy's core—sharp strategies rarely emerge from democratic consensus. Consider employing a neutral third-party facilitator to strike a balance between input and clarity.

While the breakthrough goal demands selectivity, your business can presumably continue functioning with its core operations. Therefore, establish a set of "stability" goals as well. These may be set as thresholds to maintain or small, incremental improvements. For example, most manufacturing companies pay attention to safety, quality, cost, delivery, and morale. The number of metrics and degree of improvement expected should correspond to your business’ capability. In fact, stability itself can be a great goal for most departments, especially in a newer business.

Now that your team knows the direction and success criteria, stay tuned for the next post, where we'll explore how to establish a management system for governing deployment and experimentation. Until then, keep the strategy fire burning! 🔥

Contact me today to learn how we can work together on your strategic planning process.