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How to build a strategic plan
There are several best practices for strategic planning captured over the years – some of them are listed below.
- Information without paralysis. As many business leaders already know, information is necessary to make critical business decisions. However, waiting until all information is known leads to decision paralysis. Strategic planning can be subject to these similar challenges. While it is difficult to make decisions without access to all the information, it is important to make the most informed decision with the information at hand to avoid management paralysis.
- Failure to include the execution team in the planning. As sometimes occurs in businesses that move quickly, a small team of individuals is responsible for putting together the plan and another for execution. However, often the execution team has not been included in the decision making or planning and consequently struggles to come up to speed and support execution decisions made prior to their involvement. It’s well understood that small teams can be nimble and move quickly, whereas larger teams require more coordination and can sometimes delay the speed at which the planners move. It’s a difficult balance to strike but it is important to note that planning and execution teams operate on the same continuum. When they are disconnected, it creates significant organizational challenges.
- Confirmation Bias. A technical term to describe a very common phenomena that occurs in all organizations is confirmation bias – or making the decision to proceed with a decision because it is the one that is favored and known. When evaluating options, many decision makers ultimately select the option that they are familiar with or is better known vs something that may be higher risk, with higher reward. This confirmation bias can be limiting and can be overcome by working with individuals that can help provide perspective because they are removed from the day-to-day of the organization.
- Overconfidence. An interesting phenomena occurs with large, successful organizations that sometimes push the pendulum on the other side of “pull” strategies. In a normal push strategy, customers are driving decisions on product innovation, sales, services, etc for businesses – hence these businesses are being “pushed” into certain business decisions. However, in a pull strategy, businesses drive the purchasing decisions of customers by making them aware of a product/service they were previously unaware of – hence “pulling” customers along the technology curve. However, in firms that are “overconfident”, plans may become overconfident in the firm’s ability to “pull” customers to purchase certain products. This overconfidence failure is difficult to watch and should be controlled when it arises.
- Fallacy of Prediction. The belief that all variables relative to the future can be foreseen or predicted. However, as we all know who are living through the Covid-19 healthcare crisis and the subsequent civil unrest in the United States – no one person can predict economic, social or political unrest and the future remains uncertain.
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Successful strategic planning
