…or, how to take an evolutionary approach to long-term success.
“We’re two years into our five-year plan,” said one charity CEO to me recently, “But our targets are starting to feel less like milestones and more like millstones around our necks.”
It reminded me of a fast-growing retailer I worked with, who’d given guidance to investors back in 2015, that their new stores were continuing to buck the market trend, so it would continue its opening programme for the next four years. Within eighteen months, their online sales were dramatically overtaking physical stores, and their like-for-like store sales, while still OK, were certainly slowing. It was increasingly obvious that redirecting their investment toward digital would be a much more sensible move.
As it transpired, their investors were all over the trends already, and embraced the proposed shift in direction, but it did highlight the problem inherent in strategic planning. Planning is about building, from where you are now, in the direction you want to get in the future. Planners are pragmatists, and plans are inevitably built upon the foundation of recent history.
In retrospect, the situation that prompted my retailer’s volte-face was probably entirely predictable, but hindsight is 20:20 and their original plan was perfectly sensible based on what they knew at the time. Those times had changed, and their plans needed to as well.
The challenge for my charity CEO was similar. His strategic plan had been built on extending their current services, improving and optimising them, but times were rapidly changing. Income was growing more slowly than costs, user expectations were changing, competition was intensifying, and the executive team were already aware of disruptive innovations in the air.
“The one thing we can be sure about,” he explained, “Is that the landscape will look totally different in ten years’ time and if we stay on this track, we won’t be around to see it.”
The classic MBA-style model of strategic planning is well established. You do lots of research and lots of thinking, work out the big initiatives, prioritise and plan them for the next five years, then put your head down and crack on with delivery. And yet, in times of increasingly rapid change, the old military maxim that ‘no plan survives contact with the enemy’ has never been more relevant. The idea that any plan sufficiently detailed to merit the name, will still be relevant in three, two, sometimes even one years’ time, is utterly naïve.
Strategy should be the opposite of planning. It is a creative process of envisaging what the future may look like, what the organisation may need to be and do to thrive in those scenarios, and of working back from that point to design building-blocks of change and innovation. The first of those blocks can be planned, but the rest are ephemeral. They will shift and reshape as you learn, and circumstance evolves. It’s long past time that the historic marriage of strategy and planning within a single, integrated process, accepted the need to divorce.
My retailer’s solution was to look ten years ahead, to build a broad vision based on digital commerce, international presence, strong ethical positioning and multi-purpose, experience-led locations, that would deliberately shift from primarily holding and selling stock, to providing advice, engaging customers, facilitating returns, securing sign-ups, and building personal relationships. Indeed, there’s plenty of cross-over learning that charity retailers could take from that strategy.
The breakthrough for them, is that they have formally and completely divorced their strategy setting from their business planning. Their long-term goals and themes, of customer numbers, loyalty and engagement; of relevance, revenue and profit, are set in stone. But their plans to realise them will change and evolve, at least annually; in some cases, monthly.
Their aim is to become as agile as their customers, and as swift as the pace of change. It’s a complete break from the millstone of long-term plans, and it’s a far better strategy than doggedly opening shops that customers will no longer want.
Is it past time you changed the way you think about strategic planning?