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Clarity Institute / Insights

How to take a more human approach to strategic planning

Date: 01.09.2023

Category: Insights

By: Alan Smith

At Deutser, we define strategy as an organization’s definition for change – specifically the change to create value for stakeholders, identify new markets and products, or build competitive advantages in a current market. There are a multitude of choices to make, scenarios to plan for, and subsequent capabilities an organization must identify to pursue these choices.  

Like the changing of seasons, each year many organizations engage in a ritual universally described as “strategic planning.” And while there is usually plenty of planning involved, there is often very little, if any, strategy to be seen. The temptation for many organizations is to jump directly into tactical planning and call it strategy...this is a mistake.  

Rather than addressing the discomfort of these strategic assumptions head on, we’ve found it more effective for leaders to take a step back and address the fundamentals of the business first. An organization must clearly define its purpose for being, what needs it fulfills, and what motivates its employees around a common cause. When identity is established, it becomes clearer what should remain and be protected, and what things need to change.   

Step One: Align around your cultural foundation   

Strategy is the house built on top of your cultural foundation. If that foundation is unsteady, no amount of strategy, innovation, or effective planning will help. By aligning around shared values, goals, attitudes, and practices, you ensure that your leadership team has a common language and viewpoint about your organization. You will all be able to look at the bigger picture from the same telescope, seeing where the company is headed and how it’s going to get there.   

Organizations must first define the three core elements of organizational identity:  

Characteristics: The central attributes of the organization & what makes the organization distinctive and therefore unique among other organizations.   

Purpose: The glue that binds people together in support of a common cause, often linking each individual’s goals with those of the organization. Purpose answers the questions: Why do we exist? What needs do we fill? Why do we do what we do?  

Values: The beliefs that an organization’s members hold in common, from which they derive a shared sense of direction and motivation. Values guide people, creating a shared mental model of how employees think and act.  

A clearly articulated organizational identity is the foundation. It communicates what a company stands for, how it stands apart from others, and what motivates everyone involved for a common cause.   

Step Two: Be aspirational AND attainable   

Even though a classic SWOT seems like an over simplified approach, it’s incredibly reassuring to see areas of agreement within your leadership team and equally surprising to see misalignments. In our workshops, we facilitate discussions first on the opportunities and threats in our industry (and the world around us). Focusing on the external factors and those elements that we can’t control helps bring focus to our strategic choices and paint a picture of “where to play” (as coined by A.G. Lafley and Roger Martin in their book “Playing to Win”).  

From here, it's time to put some meat on the bones with defined strategic imperatives, objectives, and initiatives. In determining these elements of the strategy, remember that your plan must be aspirational because it outlines a vision for the future and inspires the organization towards excellence by achieving something meaningful and impactful. But it also must be attainable. If your plan strays too far beyond your company’s core purpose, it can lead to frustration, lack of credibility, and disengagement from your workforce.   

Step Three: Be agile – a strategic plan is a living document   

The vision is the destination, and the strategic plan is the roadmap that helps you navigate from one to the other. Your strategic plan should very simply answer the below questions:   

Here’s where we are choosing to play  

Here’s how we’re choosing to win  

Here are the capabilities we need to have in place  

Here are the management systems we are going to use  

Yet, the worst thing you can do is essentially “set it and forget it.” As the organization’s external and internal environment changes over time, the strategic plan should adapt to new opportunities and challenges. It should be constantly reviewed, updated, and revised to ensure it remains relevant and aligned with the organization’s current goals and priorities.   

To wrap up, the most effective strategic planning exercises and executions are done when companies revisit and align around their cultural foundation, using that information to address areas of agreement and misalignment, and continually revisit and edit their plan throughout the year. Strategy is never static, yet staying grounded in your foundation and flexible in your execution will give your organization the necessary tools to navigate change.