The Importance of Strategic Planning in Business

Paul "Bear" Bryant, Alabama’s legendary football coach, endured only one losing season in thirty-eight years of coaching. From 1958 to 1982, he led the Alabama Crimson Tide to six national titles, including the best won-loss record in the NCAA in the 60s and 70s. When asked to describe his winning formula, Bryant’s answer was succinct: 1) Surround yourself with people who love football, 2) Recruit winners, and, 3) Have a plan for everything.

Coaches - and business executives - universally understand the need to acquire talented players and staff, but the critical difference between winning and losing is often defined by the quality of their planning. Indeed, Bryant felt that good planning was the key to victory:

"Have a plan. Follow the plan, and you'll be surprised how successful you can be. Most people don't have a plan. That's why it's easy to beat most folks."

Peter Drucker, the "man who invented management", has written thirty-nine books on management and spent more than fifty years teaching and serving as a business consultant. He had similar thoughts regarding the impact of planning on organizational success. He formulated five questions that he felt every company should answer:

1. What is our Mission?
2. Who is our customer?
3. What does the customer value?
4. What are our results?
5. What is our plan?

These are critical questions. How would you answer? Do you have a written, detailed plan for your company; a plan that supports your company's defined Mission?

Unfortunately for most companies, if they actually do have a business plan, they often fail miserably to communicate the specifics of their strategies to middle managers and/or front line employees. If you think this might be an exaggeration, ask the next employee that comes into your office to describe your company's current strategic initiatives.

Did you get one of these answers?

"To sell more of our products."
"To cut costs."
"To take care of our customers."
"To be the best in our industry."

These aren't strategies; they are simply good ideas. An effective plan, on the other hand, is specific and created in support of an over-arching Mission. Each strategic initiative is sustained by a number of specific tactics designed to execute the initiative. The point is, even if you do have a detailed plan for your team, it is diminished considerably if it is not communicated effectively and consistently to the employees that are expected to execute it.

It is, perhaps, just as common for business people to fail to distinguish between business strategies and tactics. For example, in battle, one particular strategic initiative may be to control the airspace in and around a defined battlefield. How a commander accomplishes that one objective, or strategy, would be detailed in a series of tactical decisions: 1) knock out enemy anti-aircraft guns and surface-to-air (SAM) missile batteries with long-range Tomahawk cruise missiles and F-22 stealth fighters, 2) destroy radar installations with EA-18G attack aircraft, 3) attack enemy airfields with ground forces, supported by A-10 Thunderbolt attack aircraft, in order to limit the number of opposition fighters that get into the air, and 4) engage remaining enemy aircraft with superior numbers.

You will notice, in this case, that a single strategy required a minimum of four different tactics to be successful. Further examination reveals that the strategy was developed in support of a much larger "Mission", namely to defeat the enemy and capture the ground in question. Other potential strategies related to this Mission – to destroy communications capabilities, interdict enemy supply lines, and use ground forces to capture the objective – will necessarily involve multiple tactics for each of those individual strategies.

Lessons to Learn

1) If you don't have a strategy for your business (or team), then your employees won’t know how their work contributes to a defined objective. This means that they show up, work eight hours, go home, and start over tomorrow - ad nauseum – with little sense of how success is defined. Without a detailed set of tactics tied to a defined strategic plan, there is little hope that you will reach your business objectives. Sadly, a "wing and a prayer" seldom suffices as an effective strategy.

2) Specific tactics must always be preceded by a defined strategy. Sun Tzu, author of the ancient military classic, The Art of War, asserts that "Strategy without tactics is the slowest route to victory, but tactics without strategy is the noise before defeat."

Too often, business managers skip straight into tactical ideas without any consideration of a guiding strategy. Inevitably, this leads to executing ideas that, although good in and of themselves, have only tangential bearing on the long-term success of the business. As Peter Drucker said, "There is nothing so useless as doing efficiently that which should not be done at all."

3) Finally, every manager must understand that communication is the key to successful execution. The best Mission, strategies, and tactics will fall well short of the desired result if each are not effectively communicated and consistently reinforced. Telling someone what to do one time simply does not qualify as effective communication. To completely engage an employee, he or she needs to know the what, why, and how behind the strategy employed and the tactics devised to support that strategy.

When employees appreciate the company’s Mission, are fully aware of the strategies that support that Mission, and understand their role in executing the specific tactical requirements that support those strategies, then you can readily demand and expect their best work.

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