Seven Rules of Strategic Guessing

Guest post courtesy of Bruce Hodes-Executive Coach, Consultant & Author.

A few years ago I stood facing a group of well-heeled executives and CEOs at a conference to deliver a talk on strategic planning.

?Which of your companies plan on an annual basis?? I asked.

Only a quarter of my audience raised their hands. I opened my eyes in shock.

?To those of you who don?t plan on an annual basis, why not?? I pressed.

In one way or another, they answered that they were too busy fighting fires to have time for that. This same group of executives then complained about low growth and no profits. They blamed the economy for their problems. With that, I suddenly understood: clearly, they were nincompoops. These CEOs did not make the connection that planning helps you deal with the economy and the issues that challenge your business.

Before we go further, let?s define what we mean by strategic guessing/planning. Rework, a book written by successful software entrepreneurs Jason Fried and David Heinemeier Hansson, declares that planning has been replaced by guessing. There is something to this. The past two years have presented a very uncertain climate for most businesses. If guessing has become ?as good as it gets?, then you absolutely need a process by which to look at the future and make educated and measured calculations about creating a bright organizational future. However, while tactics are a part of this process, strategic guessing/planning focuses executives on the strategy and future moves that the company will take to achieve its health and growth.

The fact is that many small- to mid-sized companies do not have a structured process from which to conduct strategic planning. This is like many adults who do not exercise, despite knowing it?s good for them. Perfect health isn?t guaranteed by regular exercise, but the likelihood of attaining good health is dramatically increased. Strategic breakthrough business guessing/planning works for businesses in much the same way as exercise works for the individual.

The time has now come to present a streamlined list of my company?s most critical rules for strategic guessing/planning. There are only 120 of them. So, music please! What? Okay! Take it easy! (You get overwhelmed so easily.) We will go over just seven rules of planning. Is that better?

Rule Number One
The first rule is always pick the right team for planning. It is crucial that planning team members are people who are committed to and can add value to the conversation about the company?s growth. The only exception is if there are key employees or managers you want to train. If you want them to better understand the strategic issues facing the company, it might make sense for them to be a part of the process. In addition, you can have members of the planning team who are outside the leadership group. These could be sales- people and other key employees. It is important that you vet them and ensure that they are of the quality and stature required for being a part of the planning group.

A number of times over the years, I have seen the wrong leaders and key employees involved in planning. Their participation actually hurt the effort. Take Carla, an HR manager that was naturally included at a manufacturing plant?s planning sessions. After the planning sessions, she took employees into her office and gossiped about managers. Then she left. (Thank goodness.) After her departure, the plant?s CEO added Lucinda, the new HR manager, to the team. She was young, energetic, knowledgeable, and had a clear vision of what the company could be. Her role was completely different than the first HR manager?s was. Lucinda?s addition to the planning team was constructive and positive.

The message here is to pick wisely and selectively. Members of the planning team must be able to maintain complete confidentiality and be fully engaged in the growth and well-being of the company. Select employees who are passionate about growing the company, developing an extraordinary organization, and, essentially, being the CEO?s partner. Don?t accept mediocrity or include people in the planning process simply because of their positions.

Rule Number Two
The second golden rule of planning is to make sure the design of the planning is one that will yield a good result. I am not a believer in leadership teams locking themselves in a room at a resort for two or three days. This type of planning may be sprinkled with some golfing, gambling, or other ?fun stuff.? From this design, a strategic plan is supposedly born and created.

The problem with this design is that it curtails critical thinking. This process begins to smell of Plan-In-Binder Syndrome, which is exactly what it sounds like: the leadership group ends up developing a ?plan? that then ends up securely contained in a nice plastic binder that is then lost and forgotten. These binders tend to become nestled in the executive bookcases. After the year begins and the fires start raging, no one looks at the plan. Poke me in the eye with a hot stick; Plan-In-Binder Syndrome is such a waste of time and resources. In addition, if you do all your planning during one session, you risk just doing more of what you are currently doing. There is no opportunity for research or involving other employees within the organization who are not at the planning session. I find that these plans run the risk of superficiality and being UN-implementable. Is that a word?

Here is what to do. The process should take place over two to three months and take three to four days. It is predicated on white papers and dialogue. Listening and understanding are critical. Better research ensures better debate and thinking. ?What is a white paper?? you ask hysterically. ?Hang tough,? I say. That is covered in rule five.

Rule Number Three
For the third amazing rule, it is important that you complete the previous year. A powerful completion process will allow you to put that year behind you as you welcome a new one. It?s important for the organization to distinguish the previous year and discuss what occurred during that time, good and bad.

At the very first session of the planning process, the past goes into the past. When I coach these sessions, the group lists the previous year?s information on flip charts. The past is broken down into a number of categories, such as BREAKDOWNS FOR THE YEAR, BREAKTHROUGHS, FIASCOS, DISAPPOINTMENTS, ACCOMPLISHMENTS, and the like.

One of the great aspects of this exercise is that the executives and key employees of the organization get to review all the work that was accomplished during the past 12 months. What aspects of this year are we taking into the next? What aspects are we leaving behind? It?s all included in the meeting minutes and brings completion to the year. One season completes and the next opens up. Excuse me while I get a little weepy. This exercise is worthwhile and useful; everyone is now ready to invent the organization?s future.

Rule Number Four
By far, my favorite rule is el grandote numero quatro: start big by creating a vision of the future of the company. It is important that the breakthrough guessing/planning process allows for dreaming and looking at what is the organization needs for a bright future. This is critical. When you have a vision, you are creating a future for the company that employees can then fulfill.

Typically, I do this by asking the group to envision three to five years into the future and record their thoughts on a flip chart. I ask the following questions to arrive at a future vision. If you were already standing three to five years in the future, what would the world look like? What are the important trends affecting your industry at that point?

Once a futuristic scenario is developed, the group should look at what it would like the organization?s image to be in this future. What are customers saying about the organization? Why are customers loyal four years from today? What goods, services, and new products have been brought forth? How much revenue will the organization bring in, and how many employees will it have?
This part of planning can be used to run growth scenarios. Have at least one for aggressive, medium, sluggish, and no growth. Play with the numbers and have some fun with what could be. The planning team should get familiar with the possible territories and futures that could be facing the organization.

Rule Number Five
The incredible rule number five is that you must face the brutal facts confronting your company. This is a command, if you will, given to us by Jim Collins in Good to Great. It means honestly facing the issues that challenge your organization, determining solutions, and implementing them in an intelligent way.

Your planning team can do this by defining critical issues facing the growth of the company both now and in the future. Let?s say you?re a training company that utilizes technology. Some of the questions you ask your planning team might be:

1. How is the organization going to transition from our old CD-ROM technology to the new ?streaming? technology? How are we going to fund this transition?
2. What new products are we bringing out in the next year?
3. How are we going to grow 20 percent per year for the next three years?
4. What improvements do we need to make for us to reduce costs by 10 percent?

Typically, these types of critical issues are addressed by writing a white paper.

?What is that?? you ask.

?Good question!? I respond.

A white paper is a three- to five-page paper that addresses the critical issue. Sometimes a white paper will take on a number of critical issues that are similar in nature. For instance, the white paper ?What is Our 2012 Sales and Marketing Plan?? might address the issues of (a) what new products are being introduced next year and (b) how to grow by 20 percent. However, it would not explore the question of what improvements need to be made in the plant to reduce costs by 10 percent. This issue would need a white paper of its own.

White papers are written between planning sessions by the members of the leadership group who are best suited to address the problem. This group can also include members outside the planning team who have useful knowledge to contribute.
The paper outlines research and analysis for the issues and provides the ?answer? submitted by the smaller group to the entire planning team. The entire planning team will read the paper prior to the second session; everyone is invited to bring feedback, questions, and concerns. In the second session, the critical issues are dealt with and problem solving can occur.

Rule Number Six
El fantastic numero seis is that the planning group must be able to actually work and create together. This has to be much more than ?plays well in the sandbox? kind of behavior. The planning group needs to be creative, productive, and able to move quickly to implement change. They have to be collaborators, problem solvers, and change agents within their organization.

A company with a high-performance planning/guessing team has many advantages over its competition. One of my clients has grown remarkably in these past, very challenging, business conditions. This company experienced growth of 60 percent in spite of changing marketplaces and customers. Members of the high-performance leadership planning team at this company trust each other. People can speak their minds, and communication is taken as straight communication about the business, rather than as personal commentary. This type of focus gives the leadership team a great advantage when competing against other business leadership teams that are rife with gossip, mistrust, and miscommunication.

Rule Number Seven
Rule number siete is by far the coolest. This reglo says: It is critical that the team show discipline and do the work. Remember the saying, ?Garbage in, garbage out.? It is important that the leadership team does complete work. In this endeavor, it is better to do less with better quality than to do a lot with mediocrity.

Some companies have a heck of a time getting out of the firefighting mode. Others never do get out of that stage.

Sometimes members of the leadership team are addicted to firefighting. They are addicted to the way things are and not to dreaming up ways the company could improve. To participate in a good breakthrough planning/guessing process, the planning team must commit time to this endeavor. Real thinking and dialogue must exist.

Once you have created the plan, you need to make sure it is acted upon. Monthly meetings of one to three hours and spending time on objectives and action plans will en- sure focus. Then, once a quarter, the planning team should meet offsite, preferably with a coaching resource like yours truly. (Bonus points if the coach is bald-headed. It makes the coach smarter and buffer?really.) At the session, the group will look at what happened in the quarter and then focus on what needs to happen in the next quarter. This will keep everyone aligned on what needs to take place to push the company forward.

Well, there you have it: seven rules that will support you in establishing a successful planning process. Put another way, it is the plan to producing and implementing good strategic planning/guessing. Using these rules will help you create a bright business future?and when you get there, let everyone know that the Brucie sent you.

This article is an excerpt from the chapter ?Seven Rules of Strategic Guessing? from Bruce Hodes first book Front Line Heroes: Battling the Business Tsunami While Developing Performance Oriented Cultures.

Source: http://devinchughes.com/2012/10/seven-rules-of-strategic-guessing/

marques colston golden state warriors free agents nfl 2012 milwaukee bucks bear grylls us news law school rankings gael