Why do we need a new strategic plan at the beginning of each year? Common responses include: Changing dynamics in the marketplace. Board members and shareholders demand it. Executives want to further solidify their control of performance outcomes that benefit them. Employees require it to effectively do their jobs.
When recently asked this question, my response snapped everyone to attention: “This traditional approach is no longer required.” The marketplace is changing so fast that a company’s strategic plan should be constantly evolving with it. Its foundational roots can remain intact, but the requirements to sow the seeds of the plan – to seize the most and best opportunities –should never stop evolving. Oftentimes, a company’s annual strategic plan loses its relevancy within the first 4 – 6 months. The reality is that companies spend too much time, money and resources trying to define a future they cannot control.
We operate in a business climate where the individual is defining the business. Consumers and employees are now in control. They are the ones touching the business and influencing outcomes. Whether it’s as simple as a Yelp review – or how the category management team that manages the in-store sales of a product can see firsthand when the cost of inventory outweighs the margins generated. You must discontinue these items and source new ones if you want to keep up with all the new product category trends emerging in today’s market.
With the instantaneous demands of the new business environment, the traditional approach to long-term strategic planning is over. It represents too much risk planning for a demand that may be here today, but gone tomorrow. Perhaps this is why so many Fortune 500s are growing through acquisition rather than growing alone, organically.
Strategic plans are too often used by a company as a platform to boost everything from sales to employee morale. Strategy plans are designed to create excitement about the future and the potential for endless possibilities – with the hope of reclaiming and/or sustaining momentum. Promotions are announced, reorganizations are planned and implemented. Oftentimes a strategic plan represents a time of change, of new beginnings; but rarely does it reflect a moment of evolution.
My organization recently conducted a survey amongst Fortune 500 directors and senior directors. They were asked: “What does change management mean to you?” Over 80% of responses included the following themes:
Survey takers were also asked to react to the following statement and what it means to them: “Influencing the evolution of your company’s future.” Over 90% of the responses included the following themes:
Without strategy, change is merely substitution, not evolution. Strategic planning should be constant and we should allow our employees to influence the futures of our companies. We no longer have the luxury of time to change and must embrace risk as the new normal; we must continuously renew and reinvent ourselves as leaders so that we have the competencies and capacity to enable the evolution of our organizations.
We operate in an environment of growing scarcity: in resources, talent, time and money. The window for change closes too fast. We are quickly discovering that we lack the competencies and required talent pool to change. Strategic plans quickly become irrelevant when we don’t have the ability to execute them . Perhaps this explains why opportunity gaps widen faster than we have the ability to identify that the gaps exist – let alone close them.
So how can our strategies evolve to grow our businesses and influence the future? Here are three ways.
Embrace Failure: Today’s failure doesn’t mean you are losing, it just means you need to course correct quickly, be nimble and find another way to be out in front of the changing marketplace. Real failure is when you allow the marketplace to pass you by because you continue to deploy a strategic plan that has lost its relevancy and impact. Pride stands in the way of wisdom. We must anticipate the unexpected and be strong enough to get back up when the marketplace beats us down. Yes, failure teaches you the most in life, so don’t be afraid to fail.
Actively Listen and Be Open-minded: I’ve learned first-hand that we need to listen more. Pay attention to what your employees and leaders are telling you. It’s no longer about what you know, but what you do with what you know. Don’t let your ego get in the way of the wisdom and experience that must guide your thinking and actions. Be vulnerable and know when to take a back-seat to others that can open your mind to new ways of thinking. This will allow you to contribute in more meaningful, purposeful and impactful ways. Learn to know where your leadership best fits and how you can most optimally contribute.
Get Your Hands Dirty: In business and in life, evolution is a journey that requires you to define new templates for success. But in today’s climate of growing scarcity, you must be more creative and inventive than ever in order to evolve in the right ways. Scarcity scares people; it makes us uncomfortable because it demands that we roll-up our sleeves and get our hands dirty. It means that we must touch the business just as much as we lead it. Stop fighting the battles that take you backwards and start getting more intimate with the business you lead. If you can’t see the opportunities that are right in front of you, you are being irresponsible to the business and those you lead – and making it impossible for your company and employees to evolve.
Because it’s becoming less about the business defining the individual and much more about the individual defining the business – the minute leaders stop touching the business is the minute they stop understanding the impact of the individual on the evolution of the business and how to stay ahead of the rapidly changing marketplace. As such, leaders must break free of substitutional thinking – and the old templates – that slow progress down and make it difficult to create distinction and gain competitive advantage. Business evolution requires leaders to continually identify and enable the full potential of others – and that requires a constantly evolving strategic plan so that we can all influence and lead the future together.