“Now, the general who wins a battle does many calculations in his temple, considers many factors before it is freed. The general who loses a battle does little calculation in his temple. Consider few factors before it is released. Many calculations lead to victory, few calculations lead to defeat. ”
“… When drawing up the plans, the following seven factors must be compared, evaluating each one with the greatest care:
- Which leader is wiser and more capable? Which commander has the most talent? Which army takes advantage of nature and terrain? In which army are regulations and instructions best observed? Which troops are stronger? Which army has better-trained officers and troops? Which army administers rewards and punishments more fairly?
By studying these seven factors, I will be able to guess which of the two sides will be victorious and which will be defeated. ”
The Art of War, Sun-Tzu (China, 500 BC).
Strategic Planning has no reputation for a panacea. Few doubt its value as a tool for business management, but applying it is not synonymous with automatic success. Studies say that only a minimal percentage of the big firms that declare having carried out formal Strategic Planning processes, achieved concrete results after a year of carrying them out.
In this document I want to express some ideas obtained both from the experience and also from interesting articles that I have read, about how companies could obtain better results from their Strategic Planning processes.
Prepare minds for strategy
It is not uncommon to meet executives dusting off their presentations from previous years, changing a couple of things, updating dates and charts, to stand in front of an audience that wants to hear new things, but without a very clear notion of what they want to hear.
I remember participating in planning processes where the emphasis was placed on all of us using the same PowerPoint templates or following the same presentation patterns. Get there early and wear an ad-hoc outfit. It was important to be corporate, not to look very different.
From the start, it is important to teach teams what Strategic Planning is: what are the steps to follow, how to achieve a successful process, what is a business strategy and above all, what is sought: a Competitive Advantage. The rest are lights.
It is important to express that the best of each manager is sought, the best ideas, the grilled proposals, the innovative projects. Do not punish those who break the mold. Demanding thought and forcing everyone to show new paths to achieve the objectives that the business is requiring.
Carrying out Strategic Planning to do more of the same doesn't make much sense.
The process should be a moment of intelligent reflection: knowledge of the business must be met with frank debate. The points of view must converge towards consensual concepts, of value towards the market. This is like "earning money." We all learn at some point that it is a consequence, not the ultimate end.
The General Manager must have previously concerned himself with preparing minds: knowledge, flexibility, questioning paradigms, trust. The political arena must be clear and the sensibilities must be prepared. That is the job of the General Manager: preparing minds for both his flight and landing.
Policy is resolved before strategic meeting
If the shareholders are not prepared to listen to new ideas or if the General Manager is not prepared to propose new paths for the business, it is better not to make a Strategic Plan.
The General Manager must face a Strategic Planning process with a reasonably clear idea of the spaces that his Board of Directors will grant him to innovate in the business strategy. If a plan is made not knowing if it will be "very daring" for the shareholders of the business, the General Manager has not done his job.
On the other hand, if the Strategic Planning activity will serve to resolve power conflicts or for managers to demarcate their fiefdoms, this must be previously resolved. The requirement must be clear and the expected results must be concrete. In this sense, the managers of each area must have a very clear notion of their responsibility in the success of the strategic effort.
The Strategic Planning process is an instance of organizational figuration, since it allows those who participate in them to improve their positions of power based on the exposition, defense and imposition of new ideas. So far so good. The issue is when others begin to develop the strategies for which executives should take responsibility.
The sense of belonging to the Strategic Plan is a key element for its effectiveness. Managers must feel absolutely the authors of the business strategy. If not, the degree of priority they will give to the Strategic Plan during the year will obviously be less than if they felt the ideologues of it.
Base your analysis on objective data
I believe that the paraphernalia works well for purposes that must be very well demarcated. All activities, although important, should be entertaining and motivating both for their underlying reasons and for the way they are carried out.
However, when proposing and arguing, the background based on objective data (statistics, studies, independent analysis, etc.) should occupy most of the discussions. It is important to keep in mind a very wise phrase: if it has not been measured it is because it is not important.
With the above, I do not mean that strategic phenomena should be observed only in light of the graphs, but it is important to highlight that in strategy meetings, the degree of credibility, the experience, the degree of empathy or, finally, the level of Sympathy that we feel for our interlocutors, can influence our ability to accept or reject certain positions or proposals. We may be better predisposed to accept certain lines of argument, if they come from certain types of people.
The ability to argue is a tool that we know is important in modern companies (if we agree that autocratic models belong to the past), but it should not be the main engine of strategic decisions. If there is hard data, it must be put ahead of any well-designed PowerPoint or any eloquent speaker.
Intuition is another element that I think should have a place in those areas where the basic sciences have not made their appearance. If objective data does not exist, it does not mean that certain topics should not be discussed or analyzed. Often, resorting to experience and common sense can save a good deal of analysis, which, waiting to carry out a study, can take months.
Choose what you will stop doing
My wife has a great phrase: "Choosing is giving up." I do not know if it is to remind me of something, but I find it very useful to analyze certain aspects of business strategies.
The Strategic Planning processes are, to a large extent, a kind of "renewal of the vows". In these meetings an account of the good and the bad is made, in order to build ideas and projects on these bases that give new impulses to the business.
I remember that a couple of years ago, in a conversation I had with a Technology Manager from a large company in Chile, he told me that he had a portfolio of more than 120 projects, which, with the resources that the company had, he He estimated that they could be completed within 30 months (and he did not exactly have an area with "few resources"). At that moment I sensed that there was something wrong.
Can someone say that you have not had to see, during your work experience in medium or large companies, areas such as technology or other support, that are absolutely collapsed? The truth is that it is a common place.
You can have a long list of projects, that's not the point. The issue is when someone comes up with a new idea and is told to get in line, because there are others who came earlier. If that new idea is a good one, then you must fight a tangle of administration and power struggles. Once that idea has managed to overcome bureaucracy, chances are that you should still share resources with projects that, if not aged, at least already have a musty aroma.
Well, this topic goes a long way. But my point is simple. I think that it is absolutely essential that strategic decisions not only consider what IS going to be done, but also what is NOT going to be done.
The fewer objectives, the more likely to achieve them. That is a maxim.
It is clear: if we want organizational vigor to push the company along paths that will surprise the market, captivate its customers and infarct its competitors; strategists must not only show the future, but also ease the burdens.
The leader must place on the shoulders of managers new projects that mean new challenges and opportunities for the company, but at the same time remove from their backs those projects that remain in the portfolio only to feed bureaucrats, justify unproductive positions or take advantage of opportunities that they ceased to exist long ago.
If managers perceive that Strategic Planning processes are synonymous with adding tasks and never eliminating those that are unjustified, the confidence in these activities will surely diminish in the near future.
Be clear in strategic statements
If you want to decorate your office lobby, buy a replica of a Miró, do not occupy the Mission or the Vision. The Mission, Vision, Values, Organizations and Strategic Objectives; they are tools for Strategic Management. As such, they must be clear and simple.
A Mission that refers to the company's business as "our products", to its target market as "our customers", and its competitive differentials as "an excellent service", leaves plenty of room for imagination and interpretation. But, like good charts, these must be precision instruments.
Let's see an example of the company's mission statement:
"We provide solutions in the field of components and process engineering for companies in the national productive sector."
Different is to say:
"We save energy in the manufacture of food products in Chile."
Both Mission statements could belong to the same company. However, the latter will most certainly guide the decisions of the executives in this company more effectively.
The company is likely to want to keep its business options open and current across the widest possible spectrum. This is valid and legitimate for any business. The point is when, from wanting to cover too much, focus is lost and energies dissipate.
Track good quality
One of the factors with the greatest incidence in the failure of the Strategic Planning processes is the lack of monitoring of the activities that each area committed once the plan was designed.
But good follow-up goes beyond just asking "how is this going" or putting pressure on the responsible manager to make something happen. Good monitoring must consider three factors: periodicity, indicators and incentives.
The periodicity of the monitoring is directly related to the priority of the project and the pace that is desired to be given to the progress that each area must generate. A greater frequency of follow-up speaks of projects with a higher priority that should be progressing faster.
The indicators are the elements that speak of the degree of success that the project is achieving. Indicators objectify achievements. It is not enough that one is answered "we are doing well" or "we are moving forward". The indicators were defined when the project was submitted for approval, they are not invented along the way. The indicators speak of deadlines, percentages of progress, sales levels, degrees of customer satisfaction, new products launched on the market, better perceived brands, higher results, lower costs, more efficiency, better organizational climate, etc.
If the Strategic Plan talks about innovation, quality of service or customer satisfaction, but on a day-to-day basis, executives are measured by the volume of sales, the most likely thing is that sales will go better than the innovation and satisfaction. Obvious.
Incentives reinforce the intention of the Strategic Plan. If the strategic objectives seek to increase market share in certain competitive segments, the achievement of the associated indicators should clearly increase the income of the people who have promoted it. If the strategy seeks to position the company in the field of innovation, things such as the number of new products launched on the market, the number of patents that the company registers during the year or the increase in perception indices will surely be measured. in the company market as an innovative brand for its clients, with the subsequent rise in the organizational pyramid of executives who achieve these improvements.
conclusion
Strategic Planning is a rational and intelligent process. People who participate in this process must be mentally prepared to give the best of themselves. Likewise, top management must facilitate the conditions both for ideas to occur and for them to fall on fertile ground.
Strategic analysis should be based, for the most part, on objective data. The discussions must privilege the antecedents over the empirical arguments or the casuistry. Decisions about the strategy to follow must contemplate both the things that will be done and those that will not be considered.
Strategic statements must be very clear, so that they fulfill their role for decision-making: to be true charts.
Finally, the actions that derive from the Strategic Plan must be subject to close monitoring, measures with specific indicators that speak of their achievements and the executives responsible for achieving the goals must be adequately incentivized, in order to achieve behavioral changes that facilitate changes in the business.
Mauricio Castro Figueroa - General Manager of Hkmk Consultores. Available at www.hkmk.cl
