From Strategic Planning to Strategic Conversations
Filed under: Decision-Making, Leadership, Performance, Strategy
The McKinsey Quarterly (subscription required) just released the results of its latest survey on corporate strategic planning activities in an article entitled: Strategic Planning: Three tips for 2009.
Key results include:
- 47% of executives surveyed indicated that their strategic planning practices will be different this year than in prior years. 34% indicated that the activities would be “extremely different.”
- The differences tend to focus on increased emphasis on scenario planning, conducting a broader range of analyses, and as you might expect, focusing on more of a short time horizon.
- In what is likely good news for the malady that I described in my recent post, “Too many projects chasing too few resources,” one of the more widely reported changes for this period is an increase in the rigor of evaluating and approving capital projects.
- As for monitoring execution, 50% of respondents plan on scrutinizing their firm’s/unit’s performance against the plan somewhere between weekly and monthly.
The survey’s conclusion offers a cautionary tale on the potential for too much short-term focus, with the following:
“Important as these adjustments may be, their nature also raise a major question in the minds of many strategists: is the crisis atmosphere undermining focus on all but the immediate future? More than 50 percent of executives, in fact, express worry about not striking the right balance between near-term challenges and long-term strategic priorities. The perennial challenge of striking this balance has become particularly acute this year.”
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From Planning to Conversations
You can set your watch by the fact that just as opening day in baseball rolls around, the articles on strategic planning start appearing. I continue to rail at the notion that this is a seasonal activity, and am actually encouraged by the large number of firms that are planning on evaluating performance against plan monthly. Hopefully, this evaluation is more than a distribution of reports, and involves opportunities to truly gauge progress, capture lessons-learned and make real-time adjustments.
While there is no doubt that strategic planning done right is a valuable management process and tool, in my opinion, we need to change both the vernacular and the approaches to move from strategic planning to conducting strategic conversations. Frankly, I want everyone in my firm thinking, talking and relating their work activities to the firm’s strategies for creating customer value and thumping competitors.
There are many potential pitfalls and poor practices that can derail even the best of intentions for strategic planning, and one of the most fatal is restricting the involvement in this process to a select few.
And while I am neither naïve enough or idealistic enough to think that it is practical to have everyone actively involved in all planning sessions, I do believe that good leadership practices open up multi-directional dialogue about strategy and performance.
The best run companies that I’ve worked around ensure that employees pass the “Walk In the Door” test…they can connect their priorities to the firm’s priorities every day that they walk in the door. They also ensure that there are ample opportunities for employees to share ideas, capture lessons-learned, reflect on Voice of Customer and suggest adjustments to execution or even to strategy.
The people in these environments engage in strategic conversations that ensure that the emperor knows if he has no clothes on and that challenge potentially bone-headed ideas or the poor execution practices that derail good ideas.
Charan and Bossidy call this Robust Dialogue. I describe it as a healthy feedback culture, filled with leaders at all levels that get the fact that their chances of success are enhanced if they park their egos at the door and promote and encourage widespread involvement.
Realizing a culture where strategic conversations are prevalent and effective takes hard work on the part of those that lead. Of course, no one said that being a good leader was easy.
How healthy and frequent are the strategic conversations in your firm?
HR Has Yet to Establish Credibility As Weapon in War for Talent
The August, 2008 Issue of the McKinsey Quarterly Chart Focus Newsletter includes an interesting article highlighting the expanding perception gap between HR Professionals and Line Managers over HR’s role in Talent Management.
The article: Realigning the HR Function to Manage Talent, identifies three major challenges in the continuing war for talent:
- Minimal collaboration and talent sharing among business units
- Ineffective line management
- Confusion about the role of HR.
Additionally, the article offers up the latest survey results on what McKinsey describes as the declining influence of the human-resources function. Line Managers significantly differ with their HR counterparts over:
- HR’s capabilities to develop talent strategies aligned with business objectives (33 percentage point gap)
- HR’s accountability for success or failure of talent-management initiatives (28 point gap)
- Whether Talent Management is the responsibility of HR (22 point gap).
None of the gaps are favorable towards HR.
Art’s Quick-Take:
I’ve observed a few great HR leaders that really understand that they are key enablers of a firm’s talent management success and key participants in the strategy process. However, many others and many HR departments remain pigeonholed as compliance police and benefits administrators. An enlightened management team and CEO recognize the strategic value of HR. They also recognize that talent development and management is the responsibility of all of a firm’s leaders and not just HR.
As an aside, there are no excuses for the perception gaps highlighted above. Twenty lashes for the leadership groups that allow those gaps to emerge and sustain.
One suggestion if you are a manager or leader in a firm with a generally tactical HR function: ask for help. You might be surprised how anxious your HR professionals are to engage in something outside the normal bounds of compliance or benefits.
While not quick to throw stones as my own functional counterparts (sales and marketing) have plenty of their own challenges, it is time for HR to stand-up and be counted on as a key enabler of strategy. They can start by helping their firm institutionalize talent identification, recruitment, retention and development.
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