Strategic planning is a crucial exercise for any business. It is a guide for what the company intends to accomplish over a long period of time. There is often a recognition of what is special or an advantage that is possessed by that particular organization.
How static is strategy?
It is tempting to simply write a nice document that contains high minded and audacious goals. In the current business environment, there is a lot of talk about the need to be innovative, disruptive and customer-centric. Yet, the strategic plan does contains how the business will be both stable and ever-changing. Add in how quickly technology is changing and being adopted, this may be a moment when the creators of a strategic plan have to consider adapting to circumstances in real-time rather than at a once-a-year strategic planning session.
When it is not working
If you have followed US business news over the past year, you probably have run across the saga of JC Penney. JC Penney is a department store that has been struggling for some time. They brought on Ron Johnson, formerly the Senior Vice President of Retail Operations for Apple, in 2011 and he set forth a different concept for shoppers. Rather than offering sales and coupons, JC Penney’s lowered their prices so customers could shop any day of the week and save money. They changed the marketing to be more colorful and fresh to attract a younger shopping demographic. They have also included shops within the stores (e.g. Sephora) featuring specific designers and more trendy fashions as well as pop up stores and such.
It isn’t working all that well. US shoppers are accustomed to shopping slaes, even when it means early or late hours, special days or using a coupon. JC Penney’s customers have complained and sales have dropped.
Do you adapt or stay the course?
While you could analyze what is specifically wrong with JC Penney’s strategy, a more interesting question is about adaptation or continuing with the strategic plan. There is the possibility that the strategic plan is not in tune with the current marketplace and using outmoded thinking. Another possibility is that the plan is unfocused so it doesn’t really provide a clear direction. Finally, the strategic plan may be fine but the tactics and execution are mismatched with how customers interact with the company’s products and/or services.
Ken Favaro asks in his post, How Leaders Mistake Execution For Strategy, 5 questions:
1. What business should you be in?
2. How do you add value to your business?
3. Who are the target customers for your business?
4. What are your value propositions for your target customers?
5. What capabilities are essential to adding value to your businesses and differentiating their value propositions?
Necessary vs unnecessary adaptation
In JC Penney’s case, there may be flawed thinking in the strategic plan. But it also may be flawed implementation. Decision-makers are tasked with managing the balance of innovation, disruptive technologies and competitors and customer-centric trends when designing the strategic plan. The challenge lies in knowing when to adapt to circumstances.
How do you differentiate between strategy and execution?
Given the turbulence and rapid changes in technology, how relevant is it to create a 5 year strategic plan?
What happens to the focus of a strategic plan if you are adapting it to current circumstances?
How do the results of business goals influence the use of a strategic plan?
What’s the next new thing in strategy?
About the author: Elli St.George Godfrey, founder of Ability Success Growth and small business coach/trainer, is the host of KaizenBiz. I’m passionate about business becoming a more human-centered place so I host this chat to connect business ideas and develop people.This passion shows up in my work with my clients. Whether you are expanding in your own backyard or into another country, Ability Success Growth guides established small business owners to unlock the CEO within during times of transition and growth.