Monday, September 27, 2010

Strategic Planning Analogy #353: Warning!

Awhile back, I was awakened in the night by beeping smoke detectors. It wasn’t the high pitched squeal warning me of fire. It was just the beep to warn me that the batteries were low. But it woke me up anyway.

This was a newly built house which still had the original batteries in the smoke detectors. I didn’t even know how many smoke detectors were in the house. As I stumbled around half-asleep, I discovered six smoke detectors and took out their batteries (for one I needed a ladder). But I could still hear a beeping. As it turns out, there were seven smoke detectors, and it took me forever to find that seventh one.

Then I got dressed and went to a store open all night in order to purchase replacement batteries. When I got home, I had to remember where those seven smoke detectors were, so that I could put in the new batteries (which wasn’t easy). By the time I was done, I had trouble getting back to sleep.

Why can’t these things happen in the middle of the day?

The purpose of a smoke detector is to monitor the environment. If it detects the early signs of a fire, it gives a warning so that you can escape to safety before it is too late.

The strategic planner serves a similar function. One of the roles of a strategic planner is to monitor the environment, looking for early signs that the environment is changing. Ideally, the planner will then make key executives aware of the problem early enough so that the company can adapt to the change before it is too late.

Smoke detectors are such valuable warning tools that there are laws mandating that they be placed in houses in key locations (which is why my house has seven of them). Let me tell you, if it weren’t for those laws, I would have been tempted that night to yank out some of those pesky detectors that were keeping me awake.

Fortunately for me, those laws are there to keep me safe. Unfortunately for businesses, there are not similar laws mandating that businesses have enough strategic planners to adequately monitor the business environment to keep them safe.

If you cannot make a compelling case for having “strategic smoke detectors” at your business, you could miss the early warning signs and your business could be destroyed by the fires of change.

We live in a world where the idea of having full-time, on-site strategic planners is becoming ever rarer. To many, the idea sounds quaint and obsolete. Yet, just as smoke detectors are still relevant and critical to ensuring the long term security of the building occupants, full-time strategic planners are still relevant and critical to the long-term security of the business.

If we treated smoke detectors the same way many companies treat strategic planning, we would be seen as reckless fools (as we shall see in the three examples below). Let’s stop the foolishness! Mandate the full-time staffing of strategic monitors.

1. Wait Until There Is a Fire to Buy A Smoke Detector
What if someone said “Fire detectors are only useful when there is a fire, so I won’t buy one until I know there is a fire.”? You’d probably think that person was a bit crazy.

By the time your nose or eyes could detect a fire (without the aid of a smoke detector), the fire may already be quite large. It might be too late to escape. This is not the time to think about running out and buying a smoke detector. At this point, about all you can do is frantically try to keep from dying.

As silly as this sounds for smoke detectors, I have seen a similar approach to strategic planning. The comment goes something like this:

“I don’t need a full-time strategic planner. I’ll just wait until I get into a jam and then bring in a strategic planning consultant.”

The problem with this line of reasoning is that by the time a company is already in a jam, it may be too late to bring in strategic planning. You may not see the signs of problems in your income statement or balance sheet until competing forces and consumer change have already engulfed your business in the flames of your own obsolescence. The world has already passed you by with superior go-to-market strategies which are more relevant to the new environment.

The best time to adapt to a changing environment is early on, when you still are operating from a position of strength and relevancy—when you still have the time and the cash flow necessary to adjust. This type of situation requires having strategic planners on site all the time, monitoring and adjusting in the early stages—when things may still look good to the naked eye. If you don’t bring in the strategic planning until the time and cash flow are nearly gone, there is little the strategist can do to help you prosper. At this point, about all you can do is hope to escape without dying.

Have you ever noticed that whenever a company issues a press release saying that they have recently hired a strategic planner to help them “examine strategic alternatives” that the end result is usually either selling the company or declaring bankruptcy? That’s because if you wait until the fires of change have already made your company irrelevant before looking for alternatives, then bankruptcy or selling out (to someone who adapted sooner and better to the change) are about the only alternatives left.

2. Complain When the Smoke Detector Doesn’t Make a Sound
What if—on that night when I was changing batteries in my smoke detectors—I had said, “These smoke detectors are worthless. They have never once warned me about a fire. They cost me money as well as the time and expense of replacing the batteries. I think I’ll get rid of them.”

If I said that, you’d think I was pretty short-sited. Just because my house had never caught on fire does not mean that the smoke detectors were worthless. They were still faithfully monitoring the environment. They were still ready to act the moment they detected change. Had there been a fire, I would have been protected. Taking the smoke detectors out makes me vulnerable to any future fires.

Eliminating smoke detectors is silly and short-sighted, but a similar approach is often taken with strategic planning. Things may be going well at the business and there may be little need at the immediate moment for drastic strategic change. Therefore, a business might conclude that strategic planning isn’t doing much or isn’t needed much. As a result, they eliminate the department.

Just because the alarm has not yet sounded does not mean that you should eliminate the alarm. Change is inevitable. Some day you will need that alarm. Having strategic planning on site all the time is the only way to ensure that you will have the alarm when you need the alarm.

Do we get angry when we live another day and do not yet need our life insurance? No…we are happy in knowing we are still alive and in knowing we are prepared just in case. The same is true of strategic planning. It is insurance against change. Eliminate the planners and you no longer have that protection. Sometimes strategic advice to “stay the course” is the best advice a strategist can give. Be happy that the strategy is still working for another day. Don’t fire the strategist because he has no new strategic change agenda.

3. Complain When the Alarm Sounds
What if my house caught on fire and my smoke detectors started blaring away in the middle of the night. Wouldn’t you think I was a bit crazy if I started getting upset over all the noise from the alarms and hated them for waking me up? Instead, I should be grateful that they woke me up so that I could get to safety.

Yet, I have seen similar reactions to strategic planners. Part of the role of strategic planning is to help companies change to adapt to the changing environment. Their call for change is often essential if I want my business to be in a safe position for the future. However, instead of the leaders being grateful for the wake-up warning, they complain. The leaders grumble about being woken up from the daily grind and commanded to change. They don’t want to change. They label the planners as excessive worriers who have too much of a negative attitude. As a result, they stop listening to the warnings.

If we want to be successful as strategic planners, we need to manage our image so that our warnings are properly heeded. An alarm clock is worthless if the user just turns off the alarm and goes back to sleep. We need to sound our alarm in such a way as to keep management from just turning us off and going back to sleep.

There are many businesses today which do not fully appreciate the value of having a permanent strategic planning department on site. This attitude is like not wanting to have permanent smoke detectors on site. Just as eliminating smoke detectors leaves you vulnerable to fires, eliminating strategic planners leaves a company vulnerable to obsolescence. If you do not make a strong case for having such a permanent planning department, you can be putting your company at significant risk.

Not only will this current trend put businesses at risk, it also puts your career at risk if you are a strategic planner. That should give you added incentive to make the case for keeping permanent strategic planning departments.

1 comment:

  1. Gerald Nanninga,

    This is a timely post on the value of early warning indicators. I may add a timely post on risk alertness. The risk of having a fire is the value of the probability of having a fire times the impact of this fire. Many people see the immediate cost, but not the deferred benefit. Why pay (cost) for batteries now when he have had no fire? The probability of fire is still there, but unfortunately many people trick themselves by eliminating the probability of fire (risk) simply because it did not happen for a long time. The probability actually increases because things tend to go chaotic if can and because old buildings become more vulnerable to fire risks.

    I think this smashing post explains these facts in a simple way. This is a post worth the readers' time.