Why Strategic Planning Feels like a Waste of Time
Is your strategy just a business plan in disguise? Strategy expert Roger Martin is willing to bet that it is. If it is, you’re not alone. Of the hundreds of companies Roger has advised, most end up with a strategic plan that is just a plan made up of projects, timelines, and deliverables.
So, what makes a strategy? And what makes a good strategy? How do you win at strategic planning?
In this episode of the Creative Confidence Podcast, Roger Martin discusses how to tell the difference between a plan and a strategy, common strategic planning pitfalls, and what makes a good strategic plan. Roger draws on his experience working with hundreds of companies, including Lego, Procter & Gamble, and Ford, to share stories and case studies about what strategy looks like when done right.
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A Plan is Not a Strategy
The practice of strategic planning often ends up being almost entirely planning and no strategy. Companies had planning long before the concept of business strategy came into existence in the ‘60s, and according to Roger we’ve kept on planning but simply started to call it strategic planning.
Planning is just saying what you’re going to do in each of the areas you control. As an organization, there are a lot of things you control. You control how many people you hire, how many square feet of office space you lease, how many raw materials you buy, and how much you advertise. Rather than focusing on strategy, this is what companies typically do. They spend a lot of time asking people in each department what they want and coming up with a list of initiatives. But when you add them up, they usually don't compel the customer to do what you want.
The distinguishing feature of strategy is that strategy is about influencing the things you don't control. One of the most important things that you don't control is the customer. You can’t order the customer to give you money—what you need to do is compel them to pay for your product or service so that you can cover your costs and earn a profit. The art of strategy is figuring out how to configure all of the things you control in a way that leads to customers doing what you want them to do. It’s challenging, but that’s the essence of strategy.
“The distinguishing feature of strategy is that strategy is about influencing the things you don’t control.”
Roger Martin, Designing Strategy Instructor
What Makes a Good Strategy
One quality of a good strategy is that it is choiceful, and involves making real choices. Roger says you've made a real strategy choice if the opposite of that choice is not “stupid on its face”. For example, a business strategy of being “consumer-centric” wouldn’t be a real strategy choice, because the opposite strategy of ignoring the consumers entirely wouldn’t make sense. Strategy involves making real choices to do some things and not other things based on a deep understanding of the customer.
Roger gives the example of the Four Seasons hotel chain. In the luxury hotel industry, luxury service is defined as grand architecture and decor and obsequious service. However, Four Seasons made a strategy choice to say, “We're going to define luxury service as service that makes up for what you left at home or at the office, because even though you're staying in a luxury hotel, there's a place you'd rather be—at home.”
Four Seasons was the first hotel chain to put little bottles of shampoo in the showers, because it tied back to their strategic choice of providing services that you have at home. They made a real choice to do something different, and it turned out to be a really good choice, because many people staying in luxury hotels actually preferred that. It's about figuring out what would provide the greatest leverage for you in accomplishing your goals, out of all the things you could do.
If you want to learn more about how to create a successful strategy, check out Roger’s online course Designing Strategy.
Roger’s Strategy Tips
Roger says to remember that you have lots of choices as to where to focus. Within the luxury hotel business, there’s land acquisition, construction, management, and more. It’s easy to default to thinking that the hotel space means doing all those things because everybody else defines it that way, but Four Seasons decided to sell off all of their hotel properties and get out of the hotel development business. They did this because being a real estate developer is such a different business from running a hotel. Without having to worry about that aspect of the business, they were able to focus all of their energy on great service.
Look at where you’re focused now, and ask yourself if that’s optimal. Sometimes it’s beneficial to expand, and sometimes it’s beneficial to narrow down. Most importantly, reflect on where you can provide great value to the customer.
Roger also emphasizes the importance of qualitative data. In a customer survey, you might ask questions on a scale of 1 to 5, which removes all of the nuances. People think about things in a more complex way than numbers. Roger says that the greatest strategies come from a depth of understanding of customers that is hard to acquire when you flatten out the customer.
Given the choice between a quantitative survey of 10,000 people and personally spending an hour with 10 customers, he’d take the latter over the former a hundred percent of the time. When you’re talking with customers, you can pick up little signals that are hard to quantify, such as body language, and you come away with much deeper insights. Then, you can go back and do a quantitative survey.
Roger also says that the more expertise you gain, the finer distinctions you can make. For example, an experienced MD looking at a set of x-rays will see different things versus an intern. The more you understand your customers, the more you can get out of interviews with them.
“Make choices in a way to secure value for the audience you want to serve.”
Roger Martin, Designing Strategy Instructor
About the Speaker
Strategy Advisor & Former Dean of the Rotman School of Management
Roger Martin is a trusted strategy advisor who’s worked with CEOs of companies worldwide, including Procter & Gamble, Lego, and Ford Motor Company. In 2017, he was named the world’s #1 management thinker by Thinkers50, a biannual ranking of the most influential global business gurus. He has published 11 books, including Creating Great Choices co-authored by Jennifer Riel, The Design of Business, and Playing to Win with A.G. Lafley, former CEO of Procter & Gamble.
Roger is Professor Emeritus and former Dean of the Rotman School of Management. A Canadian from Wallenstein, Ontario, he received his AB from Harvard College and his MBA from Harvard Business School.
If you’re interested in learning more about how to create a successful strategy, check out our 5-week online course Designing Strategy, taught by Roger.
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