"Ideas are like rabbits. You get a couple and pretty soon you have a dozen." -- John Steinbeck
I like rabbits and I love ideas, but too many of either and you have a problem. Managers consistently struggle with how to encourage innovation without disrupting productivity and performance against current objectives.
In this post, I lay out how to renew strategic thinking as part of a regular discipline of strategic management built into the management calendar. Renewing strategic thinking differs from comprehensive strategic planning efforts in that it fits into the annual budgeting cycle.
As the Outside-In Assessment has a near-term focus, it will not and should not be as extensive as a full blow strategic assessment. Its purpose is to validate plan assumptions and provide insights into how priorities may need to change before setting annual operating goals for the following year.
Here are three steps to complete an annual Outside-In Assessment.Step 1: Start by gathering emerging issues identified but not yet integrated into planning. These emerging issues are typically insights or concerns brought up by folks during team meetings or group planning meetings.
- For firms in the first year of implementing a new strategic direction, I have outlined how to determine if issues identified during the first stages of strategy implementation are obstacles to be resolved or bona fide emerging issues that deserve broader exploration. To read more, click on the hyperlink in the previous sentence.
It is not unusual for issues to emerge during the first year of implementing a new strategic direction. The phrase is, “Plans are nothing; planning is everything.” Take care to listen for things possibly overlooked as you start rolling out a new strategic plan. Integrating them into your thinking is easier when planning discussions are free in everyone’s mind.
- For all other leadership groups and teams, issues emerge in discussions continually and organically. Ideally, you never want to suppress insights, new ideas, or topics, but they can be a distraction if they are out of scope when raised. By adopting a strategic management discipline of collecting and setting aside a specific time to review and evaluate them, you will have the best of both worlds. You will “aikidos” the creativity and passion of your team members by capturing it and putting it into a management process rather than deferring it indefinitely or to a time when you can engage it.
STEP 2: Scan your market intelligence for new trends, innovations, or shifts that could shake up your view of your market and your positioning in this market. These could be insights from a recent market trip, trade show, or customer discussion. What you are seeking is a quick scan of your market and the competitive environment to identify anything you have not discussed thus far in your planning.
STEP 3:Review performance against current goals to discover possible external factors that should be mitigated or leveraged in the months ahead. Explore where are you struggling and why. Did you miss something important when setting your goals? Where are you ahead of the plan? Is this progress due to a great team, or is there an external factor reducing barriers or driving results? What you are looking for here are not management issues to address or reward, but external factors that you need to reexamine as you turn to the next year’s plans.
This exercise is likely to produce a pretty long list. However, not all issues or insights identified are worthy of allocating resources to research or flesh out. Once again, our experience has shown that three questions can effectively evaluate which merit investigation.
How do you evaluate if an emerging issue warrants further exploration? There are three main strategic thinking questions to help determine if you should spend more time and money exploring any one topic.
- Does it change Planning Assumptions? To what degree does should critical assumptions be modified? Does this discovery or observation put pressure on a foundational element of your plan? A planning assumption can be financial, such as a growth index, or it can be a condition such as your regulatory environment.
- Is it a potential Market Innovation? To what degree is this new information on what you understand about the market, how it operates (its dynamics), and who are competing with you (directly or indirectly)?
- Would this cause us to Re-prioritize Current Goals? To what degree could this mean we should delay a goal or move a goal up on our strategic planning timetable.
If an issue ranks low, it most likely does not warrant research. It still may come up in the planning discussions, but you will now be prepared to discuss the evaluation of its impact on your plans and quickly refocus your time back to more important topics.
For the issues that ranked high (a potentially high degree of impact on your plans or goals), assign a person or team to explore the topic and prepare a briefing to kick-off your annual planning with renewed strategic thinking.
The objective of the Outside-In Assessment is to start your planning with discussions of external factors that could influence future success. It is to begin the next year’s plan with a confirmation or update to the context you operate in so that you are prepared to adequately evaluate your positioning within this context and develop a response. The response is what defines your goals for the next planning cycle.