Long range, strategic planning is a lot like nutrition, dieting and exercise. Everybody agrees these are good things to do in some regards. But they tend to be easy to ignore, hard to keep up with for a long time and can become sidetracked by new information about what is the best strategy to pursue. It seems like every time you look around there is new advice on what foods are best for you and how best to secure the workout goals you have in mind.
Business publications, books and seminars are full of advice about how to change your business or prepare it for the future. These best practices are constantly changing, and unfortunately, I think a lot of the ideas that I have seen through the years just don’t work. The human element gets in the way.
I recently read an article in an old edition of Harvard Business Review titled, “Stop Making Plans: Start Making
Decisions,” and the core premise really spoke to me. The main idea is that the way most companies do strategic
planning is broken and does not align with how managers actually make decisions.
That’s when the lightbulb went off in my brain. We have divorced in many companies the planning and decision making process to the point that we don’t understand how each one should affect the other. And as a result, all of the
planning in the world means very little if we don’t make decisions and execute them. The real problem that most companies have is a decision problem, and we can’t make long range planning work until we fix our decision process
or lack of one. So I have come up with a short list of typical decision dysfunction in many companies. Which one are you? We all tend to have some dysfunction in our processes if we are honest.
Path of Least Resistance: Your company is like water, you follow the easiest path that will have the fewest obstacles. This decision process is all about minimizing the opposition within your organization. And how many stakeholders are involved tends to determine the effectiveness of executing your strategy. Innovation is not the highest priority; getting everybody on the same page is.
Firefighter Every Day, All the Time: Your company doesn’t really get around to much long-term strategic planning because key managers spend most of their time putting out immediate fires. Other issues are ignored until they become fires. These companies put little focus on long-term planning and do not set aside time regularly for big picture thinking.
Frozen in Time: Your company has a strategic planning system in place, but many decisions get tabled due to some situation that stands in the way or information that needs to be collected. And then the issue never gets picked up again due to a lack of information or interest. These companies discuss a lot of things, but make very few strategic decisions. Frequently, they want too much information before making a decision, and nobody takes responsibility to drive the investigation process.
Too Many Chiefs, Not Enough Peacemakers: Your company has lot of leaders who all want to go in different directions. And there is not enough common ground or people who will fight for compromise. The business struggles to make decisions because key leaders are too convinced that their strategy is the only way forward. This tends to happen in family businesses where there is nobody who has the final say.
Office Full of Yes Men: Your company is led by a dominant leader who sabotages good debate by stating early in the process what he or she wants. Others are not willing to speak up out of fear even though the decision may be bad or horrific for the organization. All the parameters are not discussed, and the outcome is doomed to failure from the beginning.
Isolated Decision Makers: Your company has a board or top managers who are distant from everyday operations, and they make decisions without input from stakeholders and lower level mangers or employees who must implement the decision. The leaders make decisions in the dark because they are without key pieces of information. They make assumptions based on faulty data and are not aware of how the organization really functions.
Trend Follower: Your company doesn’t really have a long-term plan of its own because the top managers are too busy trying to follow whatever is the latest business trend. They are almost too quick to respond to changes in the market, and may try things that don’t really fit the customer base just because it is new. Instead of really asking if some change is a good fit for the company and its customers, the leaders are attracted to the buzz about the latest thing. The company doesn’t really know or put much focus on its core competencies and what makes it different.
Once a Year Planner: Your company makes key decisions once per year based on long-term analysis and is not nimble enough to respond to market dynamics that cannot be foreseen long in advance. The big problem is that key decisions may need to be made in the interim, but there is not a rapid response structure established in the company to deal with competitive threats or market changes. And unless the market shift happens at an annual planning session, the company is not capable of responding quickly enough.
House Divided Against Itself Will Not Stand: Your company is made up of many different divisions with competing interests and priorities. What one division wants may negatively impact others, which puts managers at odds with each other. This problem makes it hard to create synergies and strategic decisions across divisions. All or some plans are sabotaged from within. There is not enough central leadership to ensure that everyone follows the same playbook.
Tunnel Vision Staring at the Oncoming Train: Your company has focused on one issue or segment and has ignored all others at the peril of the entire operation. There may be a crisis or issue that has distracted management. Key decisions in other areas get ignored leading to even worse problems. Or your focus may be on the wrong area while you ignore a key customer concern.
Drowning in Data: Your company has so much data and information that decision makers don’t know what to focus on first or what should be the key drivers. This can happen as you roll out new technology or systems that generate tons of data.
Thin Air, Emotive Leadership: Your company is the exact opposite of the above business. You don’t know enough about your processes or actual numbers to make informed decisions. Everything is based on a gut feel and not key metrics. You are led by feelings and age old methodologies even though the industry may have changed. You are basically pulling your strategy out of thin air – whatever seems right to a few key leaders. You may not understand the true financials and what is really driving company profits.
Running a Mature Business in a Child Safety Seat: Your company has grown to the point that taking some risks is not only good it is necessary. But you are too worried about making the wrong decision that upper management won’t take risks. Your organization is risk adverse and will only make obvious moves. You aren’t dreaming or doing anything that pushes the limits of what is possible.
All Talk and No Action: Your company has a planning process. The problem is that all you do is plan with very few changes actually made. Everything is theoretical or science fiction because the leadership spends too much time dreaming about the future and not enough focus making your products and services good today. Customers suffer and look to switch suppliers. You need to reign in the dreaming and focus on how to make practical decisions today that make your company indispensable for the customer.
So have you discovered why your planning process may not be working? I didn’t explain how to fix it because the answer is obvious. Whatever is the key flaw must be addressed. The first step is to recognize it and to address the concern.
This issue of the Enterprise carries a number of articles looking at the future. The cover story explains how one pallet manufacturer has brought in young blood to prep for the future. It explores the challenges and opportunities of having multiple generations working together. Read more on page 14. A question and answer article with a biomass expert explores the potential in better utilization of wood waste. Discover what you are missing on page 20.
Packaging guru, Mark White explains how unit load design is the future, and the future is now. He provides a number of real-world examples of true savings that can help pallet companies position themselves as packaging consultants. Read the article on page 26.
George Frack of Nazareth Pallet tells how buying the right parcel of land will position his company for growth, and all the steps the company took to develop the land itself. Read the details on page 30. And finally, a business consultant covers the basics of long range planning and how to use it at your pallet or lumber facility.
Stop to consider what future you want your company to have. Now go and make it happen one day, and one decision at a time.
