Archive for the ‘Forecasting’ Category

ProfitPATH’s Top Ten Blogs – First Quarter 2015

Tuesday, April 7th, 2015

Lessons about successful business growth1.  3 Lessons About Successful Business Growth

Two books, published 19 years apart, yet saying similar things about a key aspect of successful business growth:
‘Built To Last’ was published in 1994. In it, Jim Collins analyzed 18 companies that he called visionary because they were the best in their industries – and had been that way for decades. Collins argued that the core values and enduring purpose of all 18 could be separated from their operating practices and business strategies. And that, while the former never changed, the latter changed constantly in response to a changing world.
In her book ‘The End Of Competitive Advantage’, published in 2013, Rita Gunther McGrath studied the performance of large, publicly-traded companies from 2000-2009. She found that only 10 of them grew their net income by at least 5% every year. All 10 had found ways to combine tremendous internal stability with tremendous external flexibility. McGrath argues that to win in volatile and uncertain times, companies must learn to exploit short-lived opportunities quickly and decisively. more

time for a change in the direction you are heading, focus on center of compass...2.  3 Times When You May Need To Change Your Strategy

Changes to a well thought-out, well-crafted strategy shouldn’t be driven simply because it’s been in place 1, 3 or 5 years. A strategy shouldn’t necessarily be changed even if it isn’t producing results. In this situation I always look at how well (or badly) the strategy is being executed before I look at the strategy itself. So when should a company review its strategy? And what makes that review and any subsequent adaptation, revision or re-creation necessary? Here are three occasions. more

10 Commandments of Business Development3.  10 Commandments of Business Development

I’m not enjoying the after-effects of the 2007/2008 financial crisis. And I’m certainly not a fan of the banks, investment and other, which I believe were a significant contributor to the mess. But, while my wife may disagree, I like to think I keep an open mind. So when I saw an article talking about how Goldman Sachs grew from mid-tier firm to global player in a few decades I had to peek. John Whitehead, a co-head of the firm in 1970, wrote the following 10 commandments that guided their business development efforts. I love them. They’re full of common sense and they’re very practical. Written in 1970, these 10 commandments add to my belief that the basic, common sense principles of business never change. Here are 4 things that business owners today can take from them: more

4.  Adaptive Strategy – A Way To Profits In The New Normal?

Adaptive Strategy is an alternative developed by The Boston Consulting Group (BCG)¹. Here’s how I think it applies to owner managed businesses. Adaptive strategy is built on the 3 R’s required in a changing environment². Can adaptive strategy be applied in owner managed businesses? more

5.  6 Ways A Business Owner Can Influence Culture

I wrote last week about the relationship between Strategy, Culture and Leadership. As a result we’ve had some questions about how a business owner can influence the culture in his/her company. Here, in no particular priority, are 6 ways that it can be done. more

6.  The Difference Between A Strategy And A Plan

I want to talk briefly about what I think is one of the worst mistakes – confusing strategy and planning. Roger Martin wrote a post for the HBR last month in which he dealt with this very topic. I frequently hear business owners talk about the need to do “strategic planning” in order to create a “strategic plan”. Some talk – every year – about holding a “strategic planning meeting”. more

7.  6 Challenges Fast Growing Companies Face

I’ve mentioned Inc. magazine www.inc.com several times before. It’s a great resource. There’s a well-researched article in the current issue about 6 challenges fast growing companies face. They’re all about execution – and if the owner doesn’t deal with them well any one of them can be fatal. more

8.  6 Tips For Growing Your Business in 2015 – How to Use Them

I was asked a good question last week. “Loved your last blog post, Jim – but how do companies like mine do those things?” So here are some ways any business owner can implement the 6 tips in his/her company. more

9.  6 Tips For Growing Your Business in 2015

January is the month for New Year’s resolutions, freezing cold and, for many, a new fiscal year. Everyone wants to ‘do better’ in 2015 than in 2014 and, for business owners, ‘doing better’ is shorthand for growing. I don’t know how often, in the last couple of weeks, I’ve been asked something like “What are your top 6 tips for growing successfully”. The answer depends on a number of things. Here’s the rub. All 6 are much easier to talk about than do. But if you start on them now you can make some progress this year. more

10. 3 Reasons Why Strategy Isn’t Dead In The Water

I hate sweeping generalizations. Strategy is dead is one that I particularly dislike. To say that, it seems to me, is to say that it’s a complete waste of time for every company, regardless of size or industry, to have a strategy.
An article appeared in the Globe and Mail late last year, headline “Why Strategy is Dead In The Water.” It was based on an earlier article in Forbes magazine, headline “Is Strategy Dead? 7 Reasons The Answer May Be Yes.” We’d gone from strategy might be dead to signing its death certificate – in the space of two headlines. more

 

Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

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Top Ten In 2014……

Monday, December 29th, 2014

The results are in!

Our top 10 blog posts in 2014 were:

1.   Adaptive Strategy – A Way To Profits In The New Normal? looks at an alternative strategy that is built on the 3 R’s (Responsiveness, Resilience, Readiness) required in a changing environment.

2.   6 Ways A Business Owner Can Influence Culture looks at the ways a business owner can develop a culture which will help increase operating profits and build shareholder value.

3.   6 Challenges Fast Growing Companies Face discusses the 6 challenges of execution which, if not dealt with, could prove fatal.

4.   3 Times When You May Need To Change Your Strategy explains when a company should review its strategy and what makes that review and any subsequent actions necessary.

5.   The Difference Between A Strategy And A Plan talks about the difference between strategy and planning and why it’s important to understand what these terms mean.

6.   6 Things We Can All Learn From Family-Owned Business puts forward 6 simple things business owners can implement to achieve better long-term financial performances.

7.  Use These 3 Tips To Make Your Next Critical Decision offers 3 things Ram Charan, co-author of “Execution”, says business leaders do when faced with a critical decision.

8.  5 Traits Effective Business Owners Share outlines some of the traits effective entrepreneurs have in common that contribute to the growth of their businesses.

9.  3 Reasons Why Consulting Assignments Fail and 3 Reasons Why Consulting Assignments Fail – Part 2 addresses the most common reasons why things can go wrong between consultants and their clients.

10. Strategic Planning – 3 Things That Are Wrong With It outlines how business owners make 3 mistakes that could destroy their company when they confuse strategy and strategic planning.

If you missed any of them, here’s another opportunity!

ProfitPATH’s Top Ten Blogs – First Half 2014

Tuesday, July 15th, 2014

 

1.   6 Challenges Fast Growing Companies Face

I’ve mentioned Inc. magazine www.inc.com several times before. It’s a great resource. There’s a well-researched article in the current issue about 6 challenges fast growing companies face. They’re all about execution – and if the owner doesn’t deal with them well any one of them can be fatal. more

 

 

Strategy is not planning and the importance of knowing the difference2.   The Difference Between A Strategy And A Plan

I want to talk briefly about what I think is one of the worst mistakes – confusing strategy and planning. Roger Martin wrote a post for the HBR last month in which he dealt with this very topic. I frequently hear business owners talk about the need to do “strategic planning” in order to create a “strategic plan”. Some talk – every year – about holding a “strategic planning meeting”. more

 

3time for a change in the direction you are heading, focus on center of compass....   3 Times When You May Need To Change Your Strategy

Changes to a well thought-out, well-crafted strategy shouldn’t be driven simply because it’s been in place 1, 3 or 5 years. A strategy shouldn’t necessarily be changed even if it isn’t producing results. In this situation I always look at how well (or badly) the strategy is being executed before I look at the strategy itself. So when should a company review its strategy? And what makes that review and any subsequent adaptation, revision or recreation necessary? Here are three occasions. more

4.   Adaptive Strategy – A Way To Profits In The New Normal?

Adaptive Strategy is an alternative developed by The Boston Consulting Group (BCG)1. Here’s how I think it applies to owner managed businesses. Adaptive strategy is built on the 3 R’s required in a changing environment2. Can adaptive strategy be applied in owner managed businesses? more

5.   6 Ways A Business Owner Can Influence Culture

I wrote last week about the relationship between Strategy, Culture and Leadership. As a result we’ve had some questions about how a business owner can influence the culture in his/her company. Here, in no particular priority, are 6 ways that it can be done. more

6.   6 Things We Can All Learn From Family-Owned Businesses

The 6 things I’m going to talk about come from a study of 149 large, publicly-traded, family-controlled businesses. However, stay with me because we’ve seen the same characteristics in the successful family-owned businesses we’ve dealt with – and none of them are publicly traded. Another thing – the study looked at 1997 – 2009, covering some good and some very tough times. Guess what? The family-controlled businesses, on average, turned in better long-term financial performance than non-family businesses – in multiple countries. So what are the 6 things we can learn? more

7.   6 Tips For Finding The Right Buyer

Last week I was one of three speakers at the Toronto Star’s Small Business Club event, “Exit and Succession Planning”. My talk included 6 things a business owner can do to ensure she/he finds the right buyer or successor. more

8.   3 Ways Human Nature Sabotages Strategy

Ask 10 people how long it will take them to complete a task and I’d guess 7 or 8 of them will underestimate the time required. That proportion might increase if the 10 are all type A personalities – i.e. business owners or entrepreneurs. We see this when we take teams through our strategy and business planning processes. For example, at a specific point, we prioritize the things they need to do to close the gap between their company’s current state and where they want it in 3 years’ time. Typically the teams want to tackle more items than is humanly possible given their resources. There’s no ideal number of items – the complexity of each item is only 1 of the variables – but we’ve seen time and again that completing a few key tasks produces better results than taking on too many. more

9.   5 Traits Effective Business Owners Share

I believe the single biggest thing that separates companies that grow from those that don’t is the owner’s awareness of the need for change and their willingness to do so. So, I was interested in a recent post about traits that effective entrepreneurs share. Sure enough, it contained a quote saying that if owners commit to learning more about themselves and becoming the best that they can be, they’ll find that challenges are really opportunities. But what other traits, according to the post, do effective entrepreneurs have? more

10.  Strategic Planning – 3 Things That Are Wrong With It

We all know that picking a strategy means making choices. But that means making guesses about that great unknown, the future. What happens then if we make the wrong choice? Could we destroy a company? That’s why, according to Roger Martin¹, we turn choosing a strategy into a problem that can be solved using tools we are comfortable with. And we call that strategic planning. But, Martin says, companies make 3 mistakes when they confuse strategy and strategic planning. more

 

 

Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

Successful? Your Company Still Has To Change

Tuesday, April 1st, 2014

Two statements that we often hear are:Change your attitude to the future for successful growth

• “Why change? We’re successful and what we’ve been doing has got us to here.”

• “What got us here won’t get us to where we want to go.”

Business owners who make them have two things in common. Their companies have been profitable and throwing off cash for a number of years. And they’re successful – in their own, and everyone else’s, eyes.

But their attitude to the future is completely different.

Who is right and who is wrong?

Getting an answer means either waiting for several years to see how things turn out, or trying to make an informed guess about what will happen.

Let’s start with the fact that a company doesn’t exist in a vacuum.

Are there things that affect results that a company can’t control? Yes, and a couple of easy examples are the economy and the firm’s competitors.

What are the odds – the probability – that those things will behave differently in the future than they did in the past?

Will, for example, the recession continue to ease or get worse again; or a competitor introduce a new technology, change their pricing, promotion or distribution strategies?

Does it really seem likely that these external influences will behave in exactly the same way in the next 5 years as they did in the past?

What about things the company can influence? For example:

  1. Will the people who held key positions during the growth continue to be as effective as the company gets bigger?
  2. Will the company’s existing processes and technology be able to handle increased volume? Can either be changed without disrupting operations?
  3. Does the company have the financial resources to fund continued growth? Or will it need to take on debt or find an investor?

Here’s my point.

Growth is the result of the complex interaction of many factors. Most of them are constantly changing, some at a faster pace than ever before. The timing and extent of the change is often beyond the control of owners and managers.

Is it reasonable to assume that by holding constant the factors which can be influenced – even if that’s possible – the net outcome will be the same?

I don’t think so. I’m firmly in the “what got us here won’t get us to where we want to go” camp.

 

If you enjoyed this post you’ll also enjoy 5 Tips for Fast Growth in a Slow Economy

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

Strategic Planning – 3 Things That Are Wrong With It

Tuesday, February 18th, 2014

We all know that picking a strategy means making choices.3 things wrong with strategic planning

But that means making guesses about that great unknown, the future. What happens then if we make the wrong choice? Could we destroy a company?

That’s why, according to Roger Martin¹, we turn choosing a strategy into a problem that can be solved using tools we are comfortable with.

And we call that strategic planning.

But, Martin says, companies make 3 mistakes when they confuse strategy and strategic planning.

1.  Putting the cart before the horse:

All strategic plans have 3 parts:

•  A vision or mission statement,
•  A list of initiatives required to achieve it,
•  The results of those initiatives expressed as financial statements.

These financials typically project 3 – 5 years into the future, making them “strategic” (although management typically focuses on only the first year’s numbers).

But the dominant logic in these plans, says Martin, is affordability; the plan consists of whichever initiatives fit the company’s resources. And that’s putting the cart before the horse.

2.  Relying on cost-based thinking:

The company is in control of its costs – it can, for example, decide how much office space it needs and how to promote its products.

And costs are known, or can be calculated, so fit easily into planning.

This thinking is extended to revenue forecasting and companies build detailed, internal forecasts by, for example, salesperson or product.

But these projections gloss over the fact that customers control revenue and that they decide how much a company gets.

3.  Basing strategy on what the company can control:

A number of well-known models are used for strategic planning. But they can be misused. Take Mintzberg’s concept of emergent strategy.

Martin believes it was intended to make business owners comfortable making adjustments to their deliberate strategy in response to changes emerging in the environment.

However, because waiting, and following what others are doing, is much safer than making hard choices and taking risks, emergent strategy has been hijacked to justify not making any strategic choices in the face of unpredictability.

But following competitors’ choices will never produce a unique or valuable advantage.

What do I think?

I like Martin’s views but the crux still lies in linking planning to execution, turning desire into results.

__________________________________
“The Big Lie of Strategic Planning”, Harvard Business Review, January 2014,
http://hbr.org/2014/01/the-big-lie-of-strategic-planning/ar/pr

 

If you enjoyed this post you’ll also enjoy Bad Strategy – How To Spot It

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

Is Strategy Static or Variable?

Tuesday, January 28th, 2014

This week’s guest is Dick Albu, the founder and president of Albu Consulting, a strategy management consulting firm focused on engaging and energizing leadership teams of middle market private and family business to formulate robust business strategies and follow through on execution of key strategic initiatives.

 

 

In last month’s issue of AlbuonStrategy we discussed three reasons why strategy fails (3 Reasons Strategy Fails).  I would like to follow up on that conversation with a question—is strategy static or variable?  From our own client experience, we believe there is both confusion and difference of opinion about the answer to this question.

Would you agree that strategy is a dynamic, continuous and adaptive process and it needs to be managed over the long term?   Let’s be honest, as sound as you might feel your strategy is today, you should never stop questioning it.  Strategy is simply a bet on the perceived future.  No one has yet found a way to predict all that will happen in the future. Rather, we accept a forecast of the future based on our current knowledge and past experiences for our business and industry.

Think about the surprises you have encountered in your business:  Technology changes, departure of key employees, competitors gaining advantages, loss of a major customer, etc., etc.  These are just a few examples of disruptions that might cause a change of course at any point during the implementation of your strategy.   In our experience, we have seen how effective this “variable” mindset can be.  The bottom line is if you accept and operate under the concept that strategy is dynamic, continuous and adaptive, you will develop a heightened awareness of internal or external changes that might impact your strategy and be better prepared to deal with these challenges in a deliberate manner.

So are all elements of your strategy variable?  No.  While your strategy needs to be dynamic, continuous and adaptive, the strategy’s foundation should be static.  The strategy’s foundation defines the way you play and win in the market. Think of it as the way you create value for your business and the capabilities that support your advantages.  Not to say that the strategy’s foundation cannot change, because it can, but it usually takes a commitment of time and resources over the long term.  This is why a client of ours decided to limit the product categories they participate in, or another international business restricted itself to operate in only a few select countries.

What are the differentiating capabilities that support your strategy’s foundation?  How do these capabilities define what business you are in and how you do business with your customers?   If you are clear about what comprises your strengths and capabilities, you will make better strategic decisions more often and with more confidence.

Your strategy needs to be variable to deal realistically with the unpredictable and stay relevant in the fast changing business world we live in.  At the same time, the foundation of your strategy needs to remain constant so that short term strategic decisions build off your value proposition and differentiating capabilities.  Are you prepared to manage this paradox?

Dick can be reached at 203-321-2147 or RAlbu@albuconsulting.com. For more information on Albu Consulting visit www.albuconsulting.com.

Top Ten In 2013……

Tuesday, January 7th, 2014

The votes (page views) have been counted; the results can be announced!

Our top 10 blog posts in 2013 were:

1.   6 Challenges Fast Growing Companies Face, which won by a good margin, discusses the 6 challenges of execution which, if not dealt with, could prove fatal.

2.   10 Tips To Improve Your Public Speaking Body Language, written by Mark Bowden of TruthPlane, is the first of our guest posts to make the list.

3.   The Difference Between A Strategy And A Plan talks about the difference between strategy and planning and why it’s important to understand what these terms mean.

4.   6 Ways A Business Owner Can Influence Culture looks at the ways a business owner can develop a culture which will help increase operating profits and build shareholder value.

5.   Adaptive Strategy – A Way To Profits In The New Normal? looks at an alternative strategy that is built on the 3 R’s (Responsiveness, Resilience, Readiness) required in a changing environment.

6.   3 Times When You May Need To Change Your Strategy explains when a company should review its strategy and what makes that review and any subsequent actions necessary.

7.   6 Things We Can All Learn From Family-Owned Business puts forward 6 simple things business owners can implement to achieve better long-term financial performances.

8.   Strategy, Culture and Leadership deals with how these 3 things affect the development and the execution of strategy.

9.   10 Commandments of Business Development are the basic, common sense principles every business owner can apply to their business development efforts.

10.  How To Keep Control When You Work With Consultants provides steps business owners can take to maintain control when they work with consultants.

If you haven’t seen them before, here’s your opportunity!

Is Innovation Part of Your Growth Strategy?

Tuesday, July 16th, 2013

My friend Lisa Taylor is the founder of Challenge Factory, which offers unique career services for individuals and talent programs for companies.Innovation as a growth strategy for Canadian business owners

She, quite accurately in my opinion, describes her company as Canada’s innovation leader in career and talent management.

So it seemed only appropriate that Lisa would see, and forward, an article about a survey on firm-level innovation in Canada¹.

The results contain some interesting lessons about innovation as a growth strategy for Canadian business owners.

1.  The most successful innovation strategy is to provide products and services to new international markets. According to the survey, firms that do this earn between 10 and 30 per cent more net income than their counterparts using other approaches.

Yet more than 85% of Canadian firms prefer to operate within provincial or national borders, or in North America, rather than competing in international markets.

Perhaps this is a result of our conservative nature.

2.  More than half of the Canadian firms surveyed pursue a “user needs-driven” innovation strategy. This means they get new ideas for developing products and services from customers.

In comparison, about one-third of the respondents adopted a technology-driven innovation strategy – one that relies on exploiting advances in technology to gain a competitive edge.

The user-needs approach is probably less risky and may produce faster returns than the technology-driven.

3.  The most common challenges which slow down or prevent innovation include – fear of risk, lack of funding, lack of leadership focus and the organization’s culture.

The fear of risk and lack of focus make perfect sense as challenges to innovation and reflect what we see in our own practice. You can argue that, since a company’s leadership directly influences the culture, those 2 are related also.

4.  Internal cash is the number one source of funding for innovation in Canadian firms. Government financing comes second, ahead of private equity and bank financing.

And firms looking to expand the size of their markets/territory make more use of internal financing and less use of government funding or private equity than do firms with user- or technology-driven innovation strategies.

It’s not clear if the use of internal cash is by choice or by constraint. Either way, it’s interesting that neither private equity nor government financing is more readily available for market expansion, given the fact that the companies doing this achieve better average financial performance than other firms do.

5.  There is a strong correlation between the intensity of innovation efforts and company performance – but only if the innovation activities are well managed.

This should not be a surprise to anyone who follows my blog because it’s confirmation of a point I make often. If company A executes its strategy more effectively than company B, then company A will obtain the best results, even if company B has the better strategy.

You can read the article Lisa sent me here.

______________________________________

¹  2012 Survey Findings: The State of Firm-Level Innovation in Canada, published by The Conference Board of Canada’s Centre for Business Innovation.

 

If you enjoyed this post you’ll also enjoy 3 Things That Shape A Good Strategy

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6 Things We Can All Learn From Family-Owned Businesses

Tuesday, April 23rd, 2013

The 6 things I’m going to talk about come from a study of 149 large, publicly-traded, family-controlled businesses.

However, stay with me because we’ve seen the same characteristics in the successful family-owned businesses we’ve dealt with – and none of them are publicly traded.

Another thing – the study looked at 1997 – 2009, covering some good and some very tough times. Guess what? The family-controlled businesses, on average, turned in better long-term financial performance than non-family businesses – in multiple countries.

So what are the 6 things we can learn?

1. Family-controlled businesses are frugal in good times and bad. How? They don’t, for example, have luxurious offices. That’s because they view the company’s money as the family’s money – and so keep a tight rein on all expenses.

2. They limit their debt. The family-controlled companies in the study had, on average, debt levels equal to 37% of their capital (compared to 47% for non-family firms). Why, because if something goes wrong, family businesses don’t want to risk giving their investors too much power.

3. They have lower staff turnover. Only 9% of the workforce (versus 11% at non-family firms) turned over annually. And family firms don’t rely on financial incentives. They focus on building a culture of commitment and purpose, avoid layoffs during downturns, promote from within, and spend far more on training than non-family firms.

4. Capital expenditures are tightly controlled. One owner-CEO said “We have a simple rule, we do not spend more than we earn.” Family businesses not only look at each project’s ROI, they compare projects – to meet their self-imposed budget. It costs them some opportunities but means they’re less exposed in bad times.

5. They diversify. 46% of family businesses in the study were highly diversified, while only 20% of publicly traded ones were. The reason – diversification has become a key way to protect family wealth as recessions have become deeper and more frequent.

6. But they do fewer, smaller, acquisitions. There are exceptions, for example if there’s structural change/disruption in their industry. But generally, family companies prefer organic growth and partnerships or joint ventures to acquisitions.

The simplicity of the 6 things makes them easy for any business owner to implement.

There were 7 things mentioned in the study but the seventh, that family-controlled companies generate more of their sales abroad, applies less to the companies we work with. So I can’t talk to it from personal experience.

By the way, the study’s conclusion is that CEOs of family-controlled firms invest with a longer time horizon in mind and manage their downside more than their upside, unlike most CEOs, who try to make their mark through outperformance.

All because their obligation to family makes them concentrate on what they can do now to benefit the next generation.

You can read the full study, which was conducted by The Boston Consulting Group, here.

 

 

If you enjoyed this post you’ll also enjoy 5 Tips To Improve Margins and the Bottom Line……

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The Difference Between A Strategy And A Plan

Tuesday, March 26th, 2013

Hang on a second, don’t tune out yet!

I’m not going to write a scholarly piece which will bore you to death.

I want to talk briefly about what I think is one of the worst mistakes – confusing strategy and planning. Roger Martin wrote a post for the HBR last month in which he dealt with this very topic.

I frequently hear business owners talk about the need to do “strategic planning” in order to create a “strategic plan”. Some talk – every year – about holding a “strategic planning meeting”.

But if you really are reinventing your strategy every year, isn’t that a bit of an indictment of both the strategy and the way it was developed?

Coming back to the meeting, the expectation is that the output from it will be a document, a plan. And that will contain a long list of initiatives (often referred to as strategies) with time frames for their completion.

Martin wonders how (and if) this “strategic plan” differs from a budget. I think that’s a great question. But I have a different one.

Isn’t this so called strategic planning meeting really an annual (business) planning meeting? That doesn’t make it any less important – because it still plays a key role in the execution of the company’s strategy.

And if that’s the case, shouldn’t we stop calling the output a “strategic” plan. And start calling it what it really is – the initiatives, which if completed in the next 12 months, will propel the company toward the achievement of its strategy.

Each initiative is accompanied by the Action Plans required to complete it. Each action plan has a champion who is accountable for it’s completion. The action plans have resources allocated to them. And they support, or even drive, the sales and margin forecast and expense budget.

Now let’s go back and talk about the company’s strategy for a moment.

Roger Martin puts it really well –

• “…we need to break free of this obsession with planning. Strategy is not planning…”

and then

• “…strategy is a singular thing; there is one strategy for a given business — not a set of strategies. It is one integrated set of choices….”

Choices about, for example, where and how a company will compete.

The strategy sets the context for the annual planning meeting. It should make it easy for the owner and her/his management team to decide which initiatives are relevant. (Assuming, of course, that they have already developed an effective strategy.)

I think the first step toward developing and executing business strategies that actually yield results is to stop misusing words.

If we call things by their real names we’ll stand a far better chance of understanding what they really are – or vice versa.

You can read Roger Martin blog post in full here.

 

If you enjoyed this post you’ll also enjoy Strategy – Don’t Think It, Experience It

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