Prechard Mhako
Strategic planning, for some, has become a ritual, so much that the allure of quick conclusions and surface-level analysis can be tempting.
Moreso, when you try to squeeze in everything in a short retreat away from the office. If not careful, the process can become routine, superficial and more about advancing untested assumptions that make you feel good while setting your business up for failure. There is no foolproof strategy, but flawed strategies will easily crumble at the first interaction with reality. To build a robust and sustainable strategy, you need to probe deeply and objectively to challenge your assumptions, and rigorously test your ideas.
“When you have success, be extra wary. When you are fearful, know you are going to exaggerate the dangers you face.”— Robert Greene, “The 33 Strategies of War”.
Strategic planning season is well upon us and here is how you can avoid common pitfalls and ensure your strategic planning is both meaningful and effective.
Probe deeply into your core capabilities
When assessing your core capabilities, avoid superficial assumptions. It is easy to overestimate what your organisation can achieve based on past successes or industry trends.
Instead, objectively evaluate your true strengths and weaknesses by asking tough questions about your resources, skills, and market positioning. Probe deeply to see if these will give you sustained competitive advantage going forward.
This honest assessment forms the bedrock of a strategy that is both realistic and ambitious.
Understand your positioning and external environment
Effective strategy goes beyond internal planning, after all, strategy is in the competitive realm. It is about how you position yourself in the competitive landscape.
Superficial analysis of your market environment can lead to dangerous missteps. Without diving into the nuances of your industry and identifying real drivers of change, you will struggle to anticipate challenges and opportunities as they arise.
In my experience judging entrepreneurial ventures, a recurring theme is the dismissal of competition, often because the product is over-engineered or there’s a belief that “there is simply no one else with something quite like this”.
Both are terrible mistakes that even going concerns also seem to make. Additionally, many struggle with accurately sizing the market, which further complicates strategic planning.
Expand your toolkit and challenge assumptions
A robust strategic analysis requires a diverse toolkit. Relying solely on traditional methods can limit your perspective. Be open to new tools and techniques that provide fresh insights, and constantly challenge your assumptions.
Ask yourself, “What assumptions need to be true for this strategy to succeed?” By focusing on data-driven insights, you can build a strategy grounded in reality. Consider any tool that makes you question deeply about any factors you consider valuable, rare or important.
Avoid getting stuck in short-term focus and selective analysis
Measuring success over a limited timeframe can lead to short-sighted decisions. Because you achieved success in one year, doesn’t automatically justify expanding your footprint. Ensure your strategic analysis considers long-term impacts and sustainability.
Avoid selective analysis that cherry-picks favourable data while ignoring inconvenient truths. It is important to stay grounded. Beware of ideas based on best-case scenarios, as they often overlook potential risks and uncertainties.
Question simplistic assumptions about customers
Understanding your customers is critical, but simplistic assumptions about their needs or behaviour can be dangerous. If the factors important to you, no matter how great, are no longer important to your customers, then you do not have a business.
It is easy to assume that selling will be straightforward, but this rarely reflects market complexities, adapt your strategy based on genuine insights.
Remember, you are not the customer; the answers about your customers exist outside your board room.
You may not like how the market is shaping up, but that’s the reality you will have to deal with.
Beware of vanity metrics
Be wary of relying on metrics that lack clarity or are difficult to measure. Your strategy should be guided by solid, reliable data.
Additionally, avoid coming up with vanity KPIs that wont advance your overall objectives. I have been to places where they prioritise process over outcome, staff get rewarded for ticking boxes rather that for achieving meaningful outcomes.
When you measure the wrong things, there is a chance you will not get the best out of you talent or you will simply relegate them (regardless of their brilliance) to doing the barest minimum, as long as they are ticking those boxes.
If you must use buzzwords, make sure you are serious about their application.
Tied to the point above about vanity metrics, while it may sound sophisticated to use terms like innovation, technology, AI, sustainability, ESG, and more, it is far more sophisticated to align these with your overall business strategy ensuring relevance, alignment and impact.
Be prepared to walk the talk, genuinely invest, empower, and build ecosystems to turn these concepts into functional realities that actually mean something. Pretend effort produces make-believe results.
In conclusion
The depth and rigour of your strategic analysis will determine the strength of your strategy. While the temptation may be to complete your strategic analysis quickly, this process requires time and careful consideration.
By probing deeply into your core capabilities, understanding your external environment, challenging assumptions, and avoiding overly optimistic or simplistic ideas, you can develop a strategy that is not only meaningful but also resilient and effective.
The more you move from assumptions to data, and from data to actionable insights, the stronger your strategy will be. But remember it is not just about having great a great strategy or strategic initiatives on paper, you must follow through with execution and review. Constantly audit your strategy and the strategic initiatives that support it for alignment.
I will close with something that someone by the handle @malcolm_seremwe wrote on my twitter timeline, “One of the key shortcomings is assuming that you are supposed to produce a glorified document, which 90 percent of the times has no bearing on the reality on the ground. Do an honest assessment of the company even if it makes you unpopular. This provides a reality check.”
Prechard Mhako is a transformation strategist, innovation catalyst and management consultant. He serves as a partner at Baker Tilly Capital. He writes in his personal capacity; opinions do not reflect organisations he is affiliated with. He can be contacted via email [email protected]
