It’s fair to assume strategic planning for most business leaders is similar to planning to go to the dentist (i.e. they know it’s important to do it but they are worried how much it’s going to hurt).
The term “strategic” is a power word often used to intimidate others –that’s a real shame. Making sound strategic plans and executing them is something we’re all capable of doing if we put the appropriate amount of time and focus against doing it right.
To begin with, strategy is fundamentally about what you’re going to do (and more importantly, what you’re not going to do) to build your business. It’s all about the choices you and your team is willing to make (and stick with) over time.
A strategic planning process often starts with a Mission Statement. Despite being the recurring topic of Dilbert cartoons, a great Mission Statement can actually help focus your team by answering a fundamental question too many businesses lose sight of: What business are we in and why?
A helpful acronym for developing a great business strategy is OGSP (Objective/Goals/Strategy/Plans) developed by three friends of mine from P&G (Harry Kangis, Mark Schar and John Lilly). And, no, OGSP doesn’t stand for Oh, God, Strategic Planning!
Once you’re agreed on your Mission Statement, your strategy work should focus on your business’s overall Objective (i.e. how you going to define success over the next 3 years).
Goals are the means to translate your overall business objective into accountability to everyone on your team. They are the key metrics used to measure success in achieving your overall business objective.
Strategies are the collection of choices your team makes to create a sustainable advantage versus your competition. There are an infinite number of choices you can make…the key to success is what are the very few choices you and your team are committed to making for the long term that determines the success or failure of your business.
Plans are directly linked to your strategies. They spell out what you’re going to do over the next 12 months to make your strategies come to life. Too many executives spend a disproportionate amount of time developing strategies and not nearly enough on how they’re going to be executed. Give me a brilliant execution of an average strategy any day versus a lousy execution of a brilliant strategy!
The rewards of a well crafted strategy brilliantly executed is reflected in outstanding financial results. I’ve confirmed strong correlations on brands I’ve worked on that prove positive word of mouth generated by sound brand strategies are directly linked to strong brand financials. Growing consumer support for a brand based on a solid strategy is a reliable leading indicator of excellent future financial results for the business.
When you’re doing developing your OGSP, don’t worry about keeping your strategy secret (which seems to be an obsession with a lot of businesses). In fact, a great strategy should be well known by everyone on your team (without having to refer to a thick PowerPoint) as well as your customers (who will see the execution of your strategy on a daily basis).
Another issue you don’t need to worry about is changing your strategy very often. I’ve often compared changing a business strategy with amending the Constitution of the United States – it should only be done after careful thought and deliberation.
The Tide brand at P&G has been using the same advertising strategy for the past 50 years and has maintained category leadership the entire time. Brands that change their strategies frequently aren’t going to last very long or be very effective since they end up confusing everyone associated with the business.
When I think of some of the brands I admire, such as Apple, Nike, Prius, Southwest and Whole Foods, a common theme that’s apparent is they’ve made and stuck with key strategic choices over time that’s given them a distinct advantage over their competition.
Consider businesses and brands that have failed (such as Pontiac and Buick). How much of their failure was due to an ability to answer such fundamental questions such as:
- How did they define success over a 3-year time frame?
- What were the key metrics used to measure success?
- What strategic choices did they make to create a sustainable advantage over their competition?
- What did they do over a 12-month period to make their plans a reality?
If you and your team can answer these questions clearly and confidently, congratulations: your odds of success for your brand just went way up.
If not, I hope these questions will spur you and your to develop your own answers with your team to build your business.