For a CEO under pressure, strategic planning might be thought of as a long drawn out process that takes more time to achieve than they can afford. Unfortunately, it is the required course of action to improve organizational performance. The important point to remember is that any change to strategy, policy, process or tactics requires time to take effect. That is a given, so why not take the time to ensure that your actions will be the correct ones? If you know that you are about to be run down by a bus and needed to move out of the way quickly, having the information about which direction to jump is essential to survival. Jumping in the wrong direction constitutes action, but is not helpful if the bus still runs you over. Such is the case with strategic planning. No matter how rushed executives might feel to take immediate action, knowing the right direction to jump is still critical. When planning is done correctly, business leaders can take solace that they are doing the right things right, even if it took a bit more time up front to get there. This article addresses one of the most important and essential stages of strategic planning; one that some organizations make the mistake of skipping over. Don’t be one of them.
The Core Ingredient To Strategic Planning
The current-state analysis phase of corporate strategic planning involves gaining a “business truth” of where the organization is today so that it is possible to plan effectively for moving from the current reality to the desired results. The phase of planning yields many benefits, but because it proceeds the more exciting stage of defining the organization’s future…it sometimes feels like going to the dentist instead of the beach.
Picture yourself getting into a car, ready to begin driving. You have less than complete data on your current location and some of what you “know” is inaccurate. You press the accelerator and begin picking up speed quickly. You are steering the car in the direction you believe to be correct, but you are not certain about the point where you originated…leaving you uneasy. You might feel worse if you knew that only 100 meters ahead of you a sheer cliff awaits. You’ve counted on a set of assumptions that were incorrect and began driving in the wrong direction
This scenario, while disturbing, is not unlike the action some executives propose when they are impatient and not willing to focus in on where the business is today, wanting instead to jump straight into planning for the future. It is nearly impossible to plot the optimal course to a destination when you are not sure about your point of origination. Patience is required to get through the analysis and get the strategic plan on course from the beginning.
The Psychology Behind Impatience
So why the impatience? It is a common leadership characteristic and sometimes an Achilles heel. In business, all to often, decisions are made and actions taken based on emotion and not on critical evaluation. Call it “being decisive” or call it having a talent for being able to act fast; because you have trust your instincts. Regardless, it can be reckless and costly in business. Impatience is usually a direct result of the CEO’s need to achieve. Facing enormous pressure to perform and get results fast can lead to emotional and panicked action.
Psychologists believe the human mind has two systems for decision-making: intuitive and reasoning. The intuitive system, sometimes referred to as the “Reptilian Brain” is responsible for neurological response that evolved to help humans make good decisions in a limited amount of time (say, before getting eaten by a wild animal). Such decisions are based on survival and are intuitive in nature.
The intuitive system is emotional, fast, automatic but slow-learning, while the reasoning system is emotionally-neutral, slow, controlled, and rule-governed. Neither, of course, is always right, but there are definitely limits to what intuition can offer. Experts agree that it is important to distinguish between decisions that should be made by intuition and those that require careful analysis and calculation, such as mapping the course of a business during strategic planning.
Perhaps the primary factor involved is time. CEOs come and go much faster these days and have little patience to spend much time on the analysis behind strategy formulation or on the details of how to implement it. With the average tenure of a CEO being about two years, it is easy to sympathize with their desire to see change happen quickly. Regardless of the need to move swiftly, taking correct actions in such circumstances, are key to a CEO’s survival. Even under fire, CEOs must plot a careful but effective course to improve performance and meet expectations. That requires a level-headed approach and cool demeanor.
The Payoff For Doing The Upfront Work
The current-state analysis helps put everything about the organization into a singular context – with a holistic-360 degree, multi-dimensional view that allows for comparability and planning to occur effectively. Traditional planning practices usually follow a standard SWOT analysis format and provide indications of Strengths, Weakness, Opportunities and Threats. The current-state analysis as prescribed in this article provides far more relevant attribution of the organization and the environment in which it must operate (the business ecosystem) – inclusive of critical aspects, such as: the organization’s culture, structure and core values as well as the relationships with customers, partners, employees, suppliers. Likewise, current-state analysis is reflective of the economic fluctuations that occur within that system we refer to as the business ecosystem. The assessment yields a more complete picture of the organization’s strengths and weaknesses, and the same is true for the external assessment. Far more is understood and uncovered relative to opportunities and threats using this approach than when using the more traditional SWOT analysis.
The organizational profile resulting from the current-state analysis, as described, encapsulates key data that will feed the planning process with richer data – broken down into three major components:
1) Operating environment & business processes
2) Business relationships
3) Key performance categories. The comparison of the organizational profile to the challenges identified during this step result in the gap that serves as the basis for planning.
Conclusion: Current-state Analysis Brings Reality To Planning
The right way to speed up the strategic planning process is to have a solid foundation already in place upon which to build the plan. The wrong way to introduce speed in strategic planning is to skip a foundational step entirely or to rush through necessary steps. Cutting corners creates the type of plan that fails to deliver its intended results, as is the case with 90% of all corporate strategic plans.
It is truly a case where well begun is half done.
For more details on how to conduct a current-state analysis, see the article “The Current-state Analysis & Review in Strategic Planning”.
Additional Strategic Planning Resources
Free Strategic Planning Article Compilations and PDFs:
- Strategic Planning Monthly: September 2012 Edition
- Free access to the Strategic Planning Monthly: Archive
- Free Online Strategic Planning Articles Library
- Free Strategic Planning PDF Downloads