Strategic Planning Analogy #419: Get Into the Flow

THE STORY
I used to work with a company that would go into a panic the week before the quarterly board meeting. They acted as if they were totally surprised that a board meeting was coming up. They never seemed prepared. As a result, there was always a last minute rush to get ready (with lots of overtime).

I was always flabbergasted by this lack of preparedness. After all, the board meetings were put on the calendar almost a year in advance. They were mandated by law to be held quarterly and they had been holding these quarterly meetings for decades. I wondered why everyone seemed to act as though the meetings were a surprise.

I used to joke that these people are so out of touch with the rhythms of the business that they are probably shocked every morning when the sun rises in the east. They probably say to themselves, “Wow! The sun rose in the east AGAIN. What a surprise! I wasn’t ready for that. Didn’t it just do that yesterday? I wonder when it will do it next time.”

THE ANALOGY
There is usually a rhythm or flow to a business. It is the way things get done on a recurring basis. Some activities seem to effortlessly mesh with the flow of the business. Others seem like a major disruption to the flow.

At the company mentioned above, board of directors meetings were treated as a disruption to the business flow. The normal flow had to stop while panicked people altered their routine and rushed to get the director’s meeting job done. After the board meeting, the normal flow returned and people acted as if the board had never met.

When it comes to strategic planning activities, we have a choice. We can either build a structure where strategic planning meshes into the regular flow or we can have it appear as a disruption—like those board meetings. As we will see below, strategic planning is better off when part of the normal flow.

THE PRINCIPLE
The principle here is that strategic planning is more effective when incorporated into the daily flow of business. This will not occur on its own, since the “tyranny of the immediate” tends to naturally push longer-term strategic issues out of the daily flow. Therefore, if you want strategic planning to be part of the daily flow, you have to actively work to make it so. Otherwise, you will end up with a dysfunctional mess like I saw with those board meetings.

Why Strategic Planning is Less Effective When Seen as a Disruption
There are several reasons why strategic planning is less effective when seen as a disruption. First of all, the reality is that a company moves in the direction of the daily flow. It is the sum of all those little decisions and daily actions which causes a company to become what it is. You can put a business mission or vision statement in a fancy frame and place it on the wall, but if it is not a part of the daily flow, it will have no impact on the business. You may as well frame a picture of a dancing bear and put it on the wall for all the good it would do.

For example, if your strategy calls for radical change and the daily flow doesn’t change, then the change strategy will never take root and become reality. The simple truth is that you are what you do. If the implications of the strategy are not integrated into the daily flow of what gets done, then the strategy will never succeed. So if you want an effective strategy it must move beyond disruption status and get integrated into the flow, where the real decisions are made.

The second problem with strategy-as-disruption is that it is often not taken seriously. After the disruption of an annual strategy session, people go back to their routines. It’s sort of like taking a vacation or going on holiday. It can be a fun diversion—a pleasant disruption of the routine—but afterward, the old routine returns. Or it can be seen as an unpleasant disruption, like getting the flu. Once the illness is over, the goal is to get back to the normal routine as soon as possible. Either way, the connection between the disruption and the routine isn’t made because the disruption is not taken seriously enough to cause any real lasting change.

It reminds me of what the civil servant government employees in Washington DC are known for. Tradition has it that they frequently say, “Government administrations come and go. Sometimes they are Democrats; sometimes they are Republicans. They make all kinds of pronouncements about grand new programs and new ways of doing things, but in a couple of years they are gone. Then another administration shows up with their own pronouncements. Well, we were here before these administrations, and we will be here long after they are gone. So we will keep doing whatever we want, just like we have always done before.”

In other words, the government doesn’t change much, because the everyday workers of the bureaucracy reject the disruptive calls which come from the outside politicians. The daily flow stays the same because the pronouncements aren’t taken seriously, and the grand strategies go unimplemented.

Steps to Get Strategy Into the Flow
Since it is critical to get strategic planning into the daily flow, it is prudent for the strategist to take steps to ensure that happens. The first step would be to create visibility at the point where daily decisions are made. If the key decision-makers only see the strategists once a year at an annual planning meeting, then the strategists will only be a small, maningless distraction. If you want to impact the daily decisions, you have to be visible all the time—to be there when the regular decisions are being made.

Get on the calendar of as many of the decision making bodies as you can. Go to the meetings. Steer the discussions to consider the strategic implications of what they are considering. If they won’t let you into the meetings, get to the meeting members prior to the meeting. Make sure the strategic context is top of mind and part of the normal decisions within the flow.
The second step is to provide a link between the conceptual and the practical. Business Missions and Vision Statements can provide a great conceptual framework for where you want to take the company or brand. But that doesn’t mean that everyone can intuitively understand how it impacts their own day-to-day actions.

For example, let’s say that your strategy is to become a leader at providing some functional attribute, like service, or quality, or speed. That sounds nice, but how should a salesman do his or her daily task differently in order to expedite this strategy? How should someone on the shop floor act differently as a result of that mission statement? Where should R&D efforts be directed to make the strategy a reality? How should a secretary answer the phone as a result of this strategy?

Unless you can provide a link between the words on a paper and what the average person does on an average day, they may never make the link. Don’t assume people will figure this out on their own. Help them to make the connection. Help them to see that the everyday actions of everyday employees impact strategic success. Help them to find ways to act in support of the strategy rather than (unknowingly) against it.

Ask people to visualize how the daily flow should look when the strategy is fully operational. Then help them figure out how to change their processes in order to get in line with that visualization.

Finally, pay attention to metrics. Metrics are the way we measure the daily flow. If you want the daily flow to move in concert with the strategy, then use tools which measure how well the flow is moving with the strategy. Don’t expect the daily flow to support the strategy if the measurement tools and benefit packages reward a different type of performance. For example, if you want to win on quality, don’t focus on cost control metrics and rewards

Some people use a version of the Balanced Scorecard to accomplish this. However, it might just be as simple as making sure that once everybody sees the link between what they do and the strategy, to measure how well that link is getting done.

SUMMARY
Strategic execution is most likely to be successful if the strategic planning process is integrated into the daily flow of how things get done in the business. Otherwise, you end up with strategic planning as being a minor disruption which gets ignored when the real work is resumed. To ensure that the strategy is integrated into the daily flow, consider the following actions:

a) Increasing the visibility of strategists and strategic thinking throughout the year at the places where routine decisions are being made.

b) Helping employees at all levels of the organization see the link between their everyday activities and the overall strategy.

c) Using metrics to measure and reward how well the daily flow is reinforcing the strategy.

FINAL THOUGHTS
There’s been a lot of talk over the years about how ineffective many Boards of Directors are. I think a lot of that has to do with the fact that they are often seen as a disruption rather than as part of the daily flow (as we saw in the story above). Unless you want your strategic planning

Analogy #236: Check List

THE STORY
Recently, the New England Journal of Medicine published an interesting article. Some hospitals were given a checklist of 18 items to do before surgery. It was sort of like the checklists that pilots go through before starting an airplane flight.

Over the course of a year, the hospitals using the checklist saw their death rates fall by over 40% and their rate of complications drop by more than a third. That’s pretty impressive. It is even more impressive considering what the 18 items were on the checklist.

They weren’t earth-shattering activities. For example, one of the items was to have each of the people on the operating team introduce themselves to each other prior to beginning surgery and describe their function.

In fact, when each of the 18 items was examined separately, there was nothing that stood out as particularly influential on creating the success. The conclusion was that rather than looking at the individual items on the list, one must look at the process of regularly doing a preset list as the primary source of the success.

THE ANALOGY
As this study illustrates, dramatic improvement does not always require dramatic change. Sometimes, all it takes is the institutionalization of a lot of very small tasks (via a list). The list ensures that a lot of little things, which tend not to get attention, get the attention they deserve every time. Nothing falls through the cracks.

Pilots do it. The military does it. It reduces mistakes and saves lives. And now it looks like it works in a medical environment.

How about in a business strategy environment? The old traditional strategic planning process has been downplayed a lot recently. Business gurus claim that the world is moving too fast for traditional planning, the process is too rigid (not flexible enough for flexible times), and it tends to exclude too many stakeholders from the decision making.

Some are claiming that the process of strategic planning is obsolete and should be abandoned. In a web 2.0 environment, just let the customer “drive the bus” of your strategy. Rather than having strategy lead the activities, empower people in to act and let whatever happens become your strategy.

I’m not sure we would take that same approach with hospital surgery. I wouldn’t want to be operated on by people who have no preset plan and empower everyone to do whatever they want. Relying on the judgment of the patient to drive the operation sounds a bit scary to me as well, particularly if I am unconscious during the critical parts.

The systematic process of following a list of procedures has benefits. Even if you cannot see the benefits in any given item on the list, the discipline itself can be very beneficial. The same is true for strategic planning. Even if all the parts are difficult to justify individually, there is a benefit to the gestalt of running through all the key pieces of the traditional strategic planning process on a regular basis.

THE PRINCIPLE
The principle here is that the discipline of going through a strategic planning check list on a regular basis has value. It helps ensure that nothing gets missed. It can reduce mistakes and keep you on your toes. A lot of those old items found in traditional strategic planning processes should not be abandoned. Instead they should be institutionalized on a list.

So what would I put on a Strategic Planning check list?

1. Continual Ongoing Surveys
Don’t wait until things start to go awry to talk to your customers. Have a regular, ongoing dialog through surveys that sample your base at all times. That way you can detect problems in their early stages and begin strategic adjustments when it is still easy to make course corrections. If you’re not doing it all the time, you’ll probably not be doing it at the time when it is needed most.

2. Environmental Assessment
The conditions of the external environment are fluid—ever changing. Assumptions at one point in time may no longer be as relevant at a later date. By forcing a more detailed environmental assessment somewhere into your annual calendar, you ensure that changes in the environment don’t surprise you. It’s better to be proactive than reactive, and by putting it on the checklist, you are being proactive.

3. Company Assessment
Just as the external environment changes, so does the internal environment at your company. The two are also linked…changes in the external environment may cause what you are doing to become obsolete or antiquated. Strategic success usually requires leadership in some area. It’s good to annually check to make sure you are not losing ground or no longer failing to lead.

4. Strategy Assessment
A good strategic plan should not change very often. It should act as a long-term guide for all you do. However, all strategies eventually do fall out of favor and fail. It’s not a bad idea to check on an annual basis to see if the strategy is still relevant for the environment.

5. Implementation Assessment
One of the most common causes of strategic failure is at the point of execution. Great strategic ideas are worthless if you cannot put them into action. Just as one should continually track consumer opinions with surveys, one should continually monitor performance on strategy implementation. Some sort of dashboard of metrics is needed to let you see how well things are going. Are the right things being done (on time and under budget)? Are they having the intended impact on company performance? Don’t assume that the work is getting done. Measure it regularly.

6. Key Issue Management
As mentioned in a prior blog, effective strategy implementation requires focus. As a result, companies can rarely be effective if they try to do more than about three major initiatives at a time. Somebody has to manage the key initiatives and keep up the visibility and momentum. Otherwise the tyranny of the regular day work will drown it out.

7. Positioning Assessment
Winning strategies have winning positions that answer the 8 questions. Like overall strategies, winning positions should not change very often. But change is sometimes necessary. You will never change at the right time if you never spend time considering if this is the time.

8. Linkage Map
Strategies, activities, budgets and resource allocation (people, capital) should all be working together. If the resources and activities are not linked to the strategy, then the strategy is just a worthless batch of words and numbers. Someone needs to ensure that activities, budgets and resources are pointing in the same direction as the strategy with the same priorities. It may as well be you. Every time these actions change, double check to make sure it links to the strategy.

9. Innovation/Creativity/Big-Picture Time-out
Left unchecked, the tyranny of the immediate will absorb all available time. However, great strategic thinking requires breaking away from that day to day mindset. A large block of time is necessary to contemplate the larger issues, and creatively build a future that is not just an extrapolation of the present. Unless you proactively put those blocks of time on your annual checklist, the tyranny of the immediate will freeze them out. Don’t wait until it is convenient to do so. It is never convenient. Build big-picture creativity time in as a mandatory event on the calendar.

10. Monthly Face Time With Top Executives
It does no good to do steps one through nine if the implications are not a part of the regular decision making of the company. Knowledge is only power if the powerful people have the knowledge and are forced to deal with it. These issues need to be in front of top executives on a regular basis, like monthly. The topics may rotate from month to month, but by forcing strategic issues onto the regular monthly agenda, one helps ensure that their implications aren’t ignored when everyday decisions are being made. If it is not made mandatory, my experience has been that they are one of the first things bumped off the agenda when time gets tight.


SUMMARY
Using a checklist for your strategic planning process is a good way of ensuring that nothing falls through the cracks. It also minimizes the risks of one’s strategy falling out-of-step with the environment. Many of the items on that check list will be variations of some of the things associated with classic strategic planning, although perhaps in a slightly different form. Although the classic process may no longer be as valid as practiced earlier, that is no excuse for abandoning regular, mandated time on strategic issues.

FINAL THOUGHTS
Activity is not the same as progress. Just because people are busy does not mean that a strategy is being properly implemented. Without a strategy checklist, you could be running around like a chicken with its head chopped off. That random running around may look impressive, but will not create forward progress in the direction of the strategy.