A Conversation about Strategic Planning

First Posted May 20, 2005, updated for today.

Circle of Impact- simple

One morning in a business office.

THE LEADER – We need a plan.

THE ASSISTANT - Why?

THE LEADER – We are being overwhelmed by issues and problems that seem to come from nowhere. … It isn't clear what step we need to take to resolve some of the challenges..

THE ASSISTANT - Yeah! It does seem that we’ve been floundering for the past few months. Any ideas?

THE LEADER – Uh, huh. THE FRIEND recommended I talk with THE GUIDE. He led a retreat for THE FRIEND's nonprofit board. Thought he might be able to help. Here’s his phone number.

THE ASSISTANT - Ok. I’ll set up the appointment.

Next week, at a local coffee shop.

THE GUIDE - Tell me what's going on.

THE LEADER – Well…I came to talk about our need for a strategic plan. We have some problems.  Here’s a list I started the other day.

<THE LEADER - hands THE GUIDE a list>

THE GUIDE – So you think a plan will help you solve all these problems?

THE LEADER -- Yes. I hope so because I am not sure what else we can do. We are caught between processes that no longer work as well as they used to, and things that are successful without our really putting much effort into them. We know those things aren't sustainable in the long run. They really aren’t our core business either, but they bring in revenue now. We need some clarity, perspective and direction.

THE GUIDE – OK. But here’s what you need to know before embarking upon a strategic planning process with me. 

There is more to a plan than producing a document. We are talking about a change process. Unless you are prepared to do things differently, don’t begin. It will only make your situation more difficult because you are going to raise everyone’s expectations, and not be able to meet them.

The reason?  They will see through the process as simply an avoidance of reality. Your people know what is true. They may not know the whole truth, but they know it for their piece of the puzzle which is your company. If you want them to trust the process, then you have to see this as a change process that requires honesty, transparency and integrity.

THE LEADER – Oh. I thought a plan was to help me know what I am to do.

THE GUIDE – It is. But what you have been doing may be counter productive to what is in your best interest, and the best interest of your company.

THE LEADERReally?

THE GUIDE – Yes.

THE LEADER – So what should I do? This isn’t what I thought strategic planning was about.

THE GUIDE – Yeah. That’s the normal reaction.

THE LEADER – So, tell me this. Why do I need a strategic plan?

THE GUIDE – A plan is simply a tool - nothing more or nothing less - that helps you as the leader of your organization to focus the goodwill, energies and commitment of people upon a clearly conceived vision of impact.

Most organizations and leaders get trapped into thinking that their business is managing activities. It’s not. It’s producing results. Those activities are important because they help produce the impact you want. But they aren’t the impact. Can you tell me what the impact of your business should be?

THE LEADER – Yeah. We want to provide our clients with the best products and services in our market.

THE GUIDE – Ok. What’s the impact? What is the change you are creating?

THE LEADER – What do you mean? We want to do the best job we can serving our customers.

THE GUIDE – Serving your customers. Providing products and services are just things you do. They are activities. And you are spending your time focused on managing the activities of all your people. Right?

THE LEADER - - Yes and No. We have goals, sales projections, that we look at, in some cases on a daily basis. That’s how we measure how well we are doing. And we are a market leader here in town, so we are doing pretty well.

THE GUIDE – Uh Huh. So what’s the problem? Why did you come to me if you are goal oriented and results focused?

THE LEADER – Well … we have these prob…I’m not sure now that you mention it … There’s something missing in our business. I can’t put my finger on it. Some things are doing well and others … I guess I sense that we are not reaching our potential.

THE GUIDE – If you were to reach your potential, would you know it?

THE LEADER – Uh…that’s a good question.

THE GUIDE – Here’s the problem. You are a smart guy. You would not be the leader of your organization if you weren’t. You have the right degrees. You read books on leadership and management. You attend conferences. You stay up to date on trends in your industry. And as a result you have become very comfortable with the language of leadership and management.

The problem is – and you are like me in this way – we know more than we have experienced or have practiced. Ideas are important for helping us focus, clarify, motivate and articulate our perspective. But knowing an idea conceptually, even visualizing how it might work is not the same as having tested it to see if it does. And like most ambitious leaders you absorb new ideas all the time, but never give them the opportunity to see if they work. Let me ask you this …in the past six months, how many audio books have you listened to and how many books have you started on your Kindle?

THE LEADER – Gee, …I don’t know … maybe a dozen?

THE GUIDE – Yeah. And every time you pass through an airport, you look at the bookstand, and you buy a book because it has a compelling title and a fresh set of ideas. What was the last business book you finished?

THE LEADER – Uh…The One Minute Manager?

THE GUIDE – Yeah, exactly. Here’s what I’m driving at.  Ninety Nine percent of business leaders are doing what you are doing. They focus on activity results and the collection of ideas. And their budget serves as the only strategic plan they have.

What you should measure is change, impact, the difference you are making. And all those ideas you are collecting become a mental load. We read books to learn and grow. And we should measure their impact by the change we make.

THE LEADER – Ok. Tell me more.

THE GUIDE – Ever read any philosophy?

THE LEADER – Yeah, in college. Don’t remember much of it.

THE GUIDE – My favorite philosopher is Aristotle. Want to know why?

THE LEADER – Sure.

THE GUIDE – Because he understood how to establish the link between the idea of something and the experience or practice of it. What he said is that we should think of ourselves as artisans, craftsmen, who learn an art by practicing it. We learn by doing. And we learn by doing it over and over and over again. The same is true with leading. Reading books, listening to tapes, attending conferences, even getting advanced degrees have value, but they are not a substitute for practicing leadership skills in the real world.

THE LEADER – Ok. Let me sort this through. What you are saying is that for most leaders they are focused on the wrong things. They don’t really see it that way, but their gut tells them this is true. They do the best they can. But there is always something missing. They don’t know what it is, so they read books, go to conferences, attend lectures, and listen to tapes. They get ideas that seem helpful, get inspired to do better, but fall back into the same rut and routine because nothing has changed.

THE GUIDE – You’ve got it.

THE LEADER – So the trick is what? …practicing? That I don’t understand.

THE GUIDE – It is not the practicing. It is the process of turning ideas into experience that produces the kind of impact you desire. It comes back to impact and change.

THE LEADER – OK. So what does this have to do with my need for a strategic plan? After all, all you’ve given me are your ideas and nothing has changed.

THE GUIDE – It isn’t that nothing has changed. Your perception has changed. And if that matters then your actions can too.

THE LEADER – I do see your point. But still I am not clear about how this concerns a strategic plan for my business.

THE GUIDE – Many strategic plans are written to be documents that are checked off the activity list. They are perfunctory and for the most part merely project current reality into the future. At least that is the way many of the ones that I’ve encountered over the years. The shift in business is to a more results focus that has broader categories of measurement than just bottomline numbers. This shift affects how planning is done. And this is where we began. Let me ask you a question. Can you describe for me what you want your business to be like in 5 years?

THE LEADER - - Sure. I want to expand to include two other cities in our region.

THE GUIDE – Ok. That’s a goal. Now imagine that you have accomplished this goal. You are now in three cities. Describe for me what you see going on. Imagine you have put together a music video that celebrates the achievement of your goal. Tell me what you see. What music would be playing?

THE LEADER – I see my role has changed. Instead of managing my one office here, across the street there ( pointing out the window), I have a manager for each location.

THE GUIDE – So what are you doing? How does this change your activity schedule?

THE LEADER – Hmmm. I haven’t thought about that. Not sure.

THE GUIDE – This is a problem that many leaders in growing businesses face. They want to grow. And they think that what changes is that their life and work will be the same, only just at a higher activity level. What is hard to calculate are the number of changes required. Managing managers is different than managing a staff. Being the leader of a regional group of offices is different than being the manager of a single local office. The change is both professional and personal. It is more dramatic and demanding than you can imagine. You are not adding responsibilities, you are taking a quantum leap in the number and complexity of the responsibilities that you will have. It requires you to learn new skills, behaviors and approaches to leading. You and your business cannot continue to do things the same way. You will have to change.

THE LEADER – How do I know what I’ll need to know? This is bigger than I thought.

THE GUIDE – Don’t get overwhelmed . You don’t have to compress five years into 20 minutes. You have time. And you’ll be amazed at how short a time it will take, that is if you have a plan, are focused and are totally prepared to follow this path where it leads. Ok?

THE LEADER – Ok. Where do I start?

THE GUIDE – With a plan.

THE LEADER – Back to square one…

THE GUIDE – But on a different game board. You see we aren’t planning for a single local office, but for a regional group of three offices in three cities. We begin at the fulfillment of your plan.

THE LEADER – Yeah. This is different. Can we start now while this fresh?

THE GUIDE – Sure, I have another hour. We can talk project scope, process and cost later. Let’s begin by asking five questions. I want you to start writing a journal so that we have an historical record of your progress and of our interaction.

THE LEADER – OK. Can borrow some paper?

THE GUIDE – Sure. Here’s a pad. 

THE LEADER – Thanks.

THE GUIDE – OK. Now before I give the questions and get another cup of coffee, I want to say one more thing. While the success of your organization is a team effort led by you, the success of a planning / change process is totally up to you. You have to lead the effort by modeling the change. While others may have the desire for changes to be made, none are thinking like you are in terms of the development of the business. It is your role to lead them to a vision of the future that you all share and work to achieve. This becomes one of your primary responsibilities. The planning processes that I have worked on over the years that have been less than successful have ultimately been because the senior leader has not become the champion of the process or the resulting plan. You have to be your business’ champion if you want to reach your goal in five years. Ok?

THE LEADER – Yeah! Makes sense. Because I rose up through the ranks, I’ve always felt a little reticent to be too forceful in leading. You are giving me a picture of how I have to be different in the future. Wow! This is amazing.

THE GUIDE – Yes it is. Very exciting. Now let’s begin this adventure. I’d like you to write down the following questions, and while I go get us both some fresh coffee, give me your immediate response to them. They don’t have to be complete sentences or even phrases. But they have to make sense. The questions are:

1. Over the past 12 to 18 months, what has changed? How is the business in transition

2. What has been our impact? What difference have we made that matters?

3. Who have we impacted?

4. What opportunities do I have now that I didn’t a year ago?

5. What obstacles must we address? What problems have we created?

 < 10 minutes later>

THE LEADER - - Here are my responses.

THE GUIDE – Ok. No, just hang on to them. As we talk about the questions, write down other thoughts you have. The purpose behind this is help you think concretely about the changes that need to happen in order for your goal to be realized. When we are finished, your goal will have been transformed into a vision for impact. Once we have that clarified, developing your plan will be easy.

< 45 minutes later >

THE GUIDE – You have a beginning idea for what your life, work and business will be like in 5 years. I’m going to need to go, however, I want to quickly sketch out what my strategic plan looks like. Before I describe that do you have any questions?

THE LEADER – If we to follow through on this, how long will it take?

THE GUIDE – There is no waiting for the plan to be completed before you begin to implement. We have already begun to implement your plan. The skills you need you will learn and practice as we work together. You build commitment and support for your plan by the way you put your plan together. This way you learn to become a master craftsman of leadership arts. And your staff join you from the start in the adventure of growing into a regional market leader. Our teacher Aristotle would be so proud.

THE LEADER – OK. Never thought of myself as an artist. That will take some getting use to.

THE GUIDE – A typical plan consists of four parts.

There is a Vision statement. We’ve discussed that already. However, it is important to understand that it needs to be simple, concise and impact focused. From that statement are derived a few – two or three – Goals that are a restatement of the Vision. If we took your five year goal of having offices in three cities, one of the goals could be something like “to be a regional leader serving in …”.

Then we develop Strategies to fulfill each goal. Strategies are not simple action steps. Rather they are collaborative efforts that focus the work of the organization. In this case, a strategy could be establishing rapport with lenders, business leaders and potential customers to determine the right location for your business in their community. Each strategy then is divided out into specific Action Steps with an estimation of time and cost and assignment of responsibility for the initiative. The usefulness of this approach is that it helps you manage your activities so that you can maintain your focus on results. This will become clearer as we work through the process. Is this clear enough for now?

THE LEADER – Yeah. What I like about it is that it is all integrated, linked together. I have my dream and I see how I can achieve it. Wow! I didn’t expect this to come out of this meeting. Ok, what’s next?

THE GUIDE – I’m going to prepare a set of questions that I want you, your staff and some of your clients to answer. I’m going to ask for some documents that describe how you are organized. Because with growth comes the need to address organizational structure. I need to know whether your operation is based on clear policy choices, or, are you primarily operating on the strength of your personality and character. To grow like you wish, your operating structure will have to grow as well. I’ll have those questions to you by the end of the week, along with a project proposal that will include process, timeframe and costs. Does that sound okay to you?

THE LEADER – Yes it does. Thank you very much. This is going to be great.

THE GUIDE – Yes, it is. Remember this day. It is the beginning of what could be a life-long adventure of pursuing a vision for impact that still forming in your mind. Thank you for letting me join you in this journey.

< conversation ends >

Afterword:

I've had many of these conversations over the past two decades. There are two sets of lessons that I've learned.

Lesson Set #1:

Strategic planning is a conversation. It takes place in relationships. It is a personal process that takes place in a business context. It is so because strategic planning is a change process. You can’t change an organization without changing the people and the relationships in it.

Strategic planning is an analytical process focused on enhancing the impact that you wish to achieve. If there is no vision, there is no reason to change or to improve. If there is no plan and no way to change, then the vision is a fantasy that is soon recalled with regret, maybe even bitterness.

Strategic planning is a tool for building an organizational community focused on individual performance experienced as the impact which is a shared vision for the future.You can not do it alone. The clearer the plan, the better the conversation, the more trusting the relationships, the more likely your vision of impact will be realized.

Lesson Set #2:

Strategic planning is less and less about long term planning, and more about providing a platform for adaptive leadership. This primarily means that a plan is a daily change process.

The Leader of an organization is now more of a facilitator of other's leadership than the sole leader who delegates. One of the major shifts in the operation of the organization is in the encouragement and equipping of individual leadership at all levels of the organization. Leadership in this sense is initiative taken to create impact. For the majority of the organization's employees this means that they become problem solvers and system adapters to change.

Measuring impact or change is more critical now than ever.  One way to get at this is look at what is called the Triple / Quadruple Bottom LIne

It is important also to understand that how we measure results is influenced by our experience of the acceleration of time. Now, a minute, an hour, a day are still the same length, but our experience has changed. We are now forcing more tasks, decisions and encounters into the same space of time as we have always had. The benefit / liability of technology is that we can do more with fewer resources, in less time for greater results. We need to recognize that measuring performance requires us to be much clearer and specific about what matters. We need to be clear about what results from our life and work actually matter. Impact or creating change or difference is how I've come to understand what we must do.

Lastly, we need more conversation that creates the conditions of collaboration. My Circle of Impact Leadership Guides are designed to foster conversation built around the Five Questions. Do this with everyone in your organization, and everyone will begin to see the big picture, within the context of their specific place within the organization. This is essential for leading change in the 21st. Century.