Strategic thinking can and does happen every day, but it is rarely adequately optimized. Here is why.
Strategic thinking requires a shift in mindset from the problem-solving, now-oriented skills relied on for the management of activities or decision-making to the non-linear, future-oriented frame of mind required for true strategic thinking. Because problem-solving practices are too constricting, discussions of more complex issues are often organized outside operational meetings and conducted less frequently.
A typical cadence for strategic planning is deep reviews and updates of long-range plans every 3 - 5 years with updates annually. However, in recent years there is a trend to label all non-operational meetings as “strategic planning.” While usually inaccurate, this practice is also risky as it could communicate changes to long-range goals or weaken commitment to the strategic plan as a whole.
So, how can you update your strategic thinking between long-range planning without invalidating the entire strategic plan?
Building strategic management capabilities means working out how to balance driving performance against long-range goals with an openness to responding to changes in market conditions. Today's reality is that assumptions are shifting continually and no matter how brilliant long-term goals are, they are under constant pressure.
Maintaining clarity and confidence in your strategic goals depends on regular structured, strategic thinking forums that work in concert with other management disciplines like annual planning, budgeting, and performance reviews.
In this two-part series, I will tell you how to gather insights necessary for strategic thinking and provide a framework so you can add an annual strategic thinking step to the management calendar. In this way, your team will leverage strategic insights to enhance goal setting each year and improve your ability to strike just the right balance between being vision-driven and market-responsive.
First, establish an annual Outside-In Assessment practice that leverages
- identified emerging issues,
- a scan of your market and competitive environment, and
- a high-level evaluation of performance against current goals.
This external to internal analysis seeks data and intelligence you may not have included in your planning thus far. This strategic management discipline quickly checks the accuracy of your current planning assumptions before the next annual planning cycle begins. It might also provide insight into potential gaps in strategy development for the next strategic plan update.
Next, schedule a strategic thinking session in the third quarter to briefly disrupt problem-solving and open the space for the exploration of new thinking months before you have to respond to this thinking with budget allocations.
Momentum accelerates in the second half of the year causing high performing teams to narrow their focus on current year goals just as planning for the coming year starts. Usually resulting in little to no time to think about how goals should evolve or how external influences could impact next year's plans — leading to plans that reflect only incremental thinking.
However, using a strategic management discipline that renews strategic thinking as the third quarter begins provides adequate time to explore before the year-end crunch hits. This practice will strengthen your management team’s ability to balance the demands of hitting performance goals and planning to respond to changing conditions.
If your organization has not engaged in strategic planning or does not have long-range goals, these two steps will not provide enough strategy development time to influence plans for the coming year properly. You should plan to engage in a strategic planning effort to create the right long-term goals for your organization's success and then adopt this strategic management practice the following year.
Renew and refresh your strategic thinking early in your fiscal Q3 to ensure the next year's priorities (and allocation of resources) are aligned with long-term goals and minimize disruption to productivity.