Authored by Peggy Cleary, Associate Managing Director, The Pangaea Group and Helen Kalra, Associate Managing Director, The Pangaea Group
Key Components of Strategic Plans
The components of a robust strategic plan are:
- A detailed analysis of the internal and external environment (situation analysis)
- A clear picture of the desired future including, vision, strategies, goals/measures and tactics to get there, and
- How the organization and management team will work together (higher performance teams, leadership, culture, values) to achieve the desired future (see Figure 1).
Figure 1: Three Spheres of Focus
- Ensure strategy is in keeping with culture: culture eats strategy for lunch (or breakfast or dinner depending on how strongly you feel about it). The best strategies will fail if the culture does not support them. If not aligned, one or the other will have to change * Base decisions on accurate, sufficient facts vs. hard won beliefs or assumptions. Conduct a thorough situation analysis of both the internal and external environment for changes or trends that could impact your business or brands. Encourage the development of opportunities based on detailed market segments and novel data and insights not available to competitors
- Get the right people in the room: encourage insights from people with different expertise, capabilities and skills. Assess what is good or bad about an idea before getting to anyone’s bottom line. Encourage expressions of doubt and rigorous debate about alternatives. * Set an atmosphere that says reasonable people may disagree
- Ensure that underlying assumptions about all aspects of the plan are surfaced and discussed – if people are at odds, it probably means they are operating from different assumptions. Assumptions need to be made explicit and taken into account in planning
- Decide what you are not going to do to make room for what you are going to do; trade offs are fundamental to strategy
- Strategic planning is iterative: Leave flexibility to make future choices and understand that plan A may fail. Be open to input down the line, as the plan is developed. Uncover what keeps your team members awake at night and identify alternate scenarios and strategies for each. Continually monitor the environment and allow for evolution to plan B
Biases to Avoid
Include opportunities in planning to discuss which of these biases your team may fall into. Proper process helps avoid these traps:
- Over optimism – tendency to hope for the best and believe too much in our own forecasts and abilities
- Anchoring – tying our valuation of something to an arbitrary reference point
- Loss aversion – putting too much emphasis on avoiding downsides and not taking risks worth taking
- Confirmation bias – overweight- ing information that validates our opinion
- Herding – taking comfort in following the crowd
- Champion bias – assigning merit to an idea that is based on the person proposing it
A winning process that includes the right people engaged in vigorous debate, avoiding biases, and making tough choices together with on-going monitoring of the environment to course correct, if necessary, will keep you focused on a winning strategic path.
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Originally published in Canadian Pharmaceutical Marketing (CPM)/ November / December 2011Tweet