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Â Innovation Should Form the Backbone of Your Strategic Planning
When I speak to executives regarding their strategic planning function, they often tell me about the methodology they have embraced for producing their strategic plan. There is nothing wrong with having a methodology for performing recurring tasks and strategic planning should be repeated at least annually and reviewed even more frequently, as market and other conditions change.
However, any methodology can become rote and a dangerous substitute for actually thinking. Therefore, any â€˜methodâ€™ must be employed carefully, lest it turn into a new â€˜BOXâ€™ that further limits your creative thought and problem solving abilities. I frequently tell my keynote speaking audiences that any business practice they are using today which is substantially unchanged from what it was five years ago, is probably outdated, outmoded and doing them more harm than good. We live in a world of rapid technical, social, political and scientific change. Given that our businesses operate in that rapidly changing world, do we really think that our methods, processes and systems can remain stagnant and yet be highly effective? I certainly hope that you do not.
Strategic Planning Has Only Two Components
The first thing to remember about strategic planning is that it has just two components.
First, it is merely a â€˜plan,â€™ not a lock-step â€˜do or dieâ€™ directive. Thus, it needs to be revisited frequently. The days when anything could be planned a year in advance and expected to remain constant for that period of time are long since past. Today, market, economic, geo-political, terrorism, even weather and other factors change outcomes quickly. A year, 365 days, during which oneâ€™s plans remain untouched by the external forces of reality is highly unlikely in virtually any business.
Secondly, the first word in the phrase â€˜strategic planningâ€™ is â€˜STRATEGIC.â€™ I often see carefully crafted voluminous â€˜strategic plansâ€™ that encompass everything except real strategies. The definition of the word strategy is:
STRATEGY: A plan of action or policy designed to achieve a major goal or overall aim.
Often contrasted with Tactics.
TACTIC: A carefully developed detailed plan designed to achieve a single specific end.
To begin with, if a strategic plan contains spreadsheets of sales projections and budgets, it is an operating plan, â€˜Tacticalâ€™. A truly strategic plan should be directed toward achieving â€˜a plan of action or policy designed to achieve a major or overall aim.â€™ Such plans are not primarily numbers based, but rather strategy, thought based.
Furthermore, in order to achieve long term sustainability, your strategic plan should focus on how open innovation will be employed to achieve strategies that create leap-ahead breakthroughs over your competition. For example, a few years back and immediately following the post Christmas retail season, the executive team of retail giant GSI Commerce, a unit of eBay, began working on how to extend the pre-Christmas online shopping period by just one hour.
Could a Single Hour FuelÂ a Strategic Breakthrough for Your Company?
A single hour you may ask? How could just a singe hour matter enough to be considered strategic? That hour translates into a 10% sales increase in the shipments for GSIâ€™s customers, companies like Timberland, Aeropostale, Nautica and numerous others, on the last and one of the largest volume internet retail sales days before Christmas. More than merely free shipping upgrades, major warehouse configuration and other innovative changes during the year made it possible to extend the time by a single hour for orders guaranteed for delivery by December 24th the following year.
Too often, when organizations are deep in the midst of their strategic planning initiative, they lose sight of the â€˜single hourâ€™ type strategic opportunities that can fundamentally alter the business. Gaining the precious â€˜hourâ€™ has led GSI to pioneer and adopt innovative approaches to warehouse flow, staffing, systems, procedures and other â€˜routineâ€™ operations, that are paying large dividends each and every day of the year.
Whether or not your organization has adopted a fixed methodology for strategic planning, make certain that your focus remains on ensuring that your plan is truly â€˜strategic,â€™ in that it focuses on the power of open innovation to create new opportunities for sustainable growth and profitability.
Real innovation should form the core of your strategic plan!
by John Di Frances
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Strategic Innovation Consultant StrategicInnovation.Consulting
Strategy & Open Innovation Keynote Speaker www.difrances.com
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