S9 E21-24 Strategic Planning: Essential or the Big Lie? with Jeremy Gray – The Geriatric Entrepreneur

Jeremy Gray – The Geriatric Entrepreneur
IBGR. Network. The World of Business at Your Fingertips
Is retirement not for you? Me neither! I have always known that retirement did not hold any attraction for me. Those financial product advertisement promising early retirement never resonated. 
As Elizabeth Queen of England, who is still active at the age of 95, says “If I stop, I will drop.”
In season 9 I will share with you my experiences running a consulting business that delivers the much targeted six figure income. I also invite you to join me, as I build my business plan to escape the tyranny of the clock which limits my earnings to the hours I work. Over the next five years I plan to build an income portfolio that will support my family into the future. Please join me as I plan that journey.
Strategic Planning: Essential or the Big Lie?

Episode 21. 3 Stumbling Blocks that get in the way of Strategic Planning Part 1
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Based on an article by Graham Kenny published by HBR April 28, 2022.

I have always believed in Strategic Planning for businesses large or small, but I keep my expectations quite modest. I have learned not to expect a strategic plan to provide a road map that will be followed by a business on its route to prosperity. In my corporate experience strategic planning results in a document that is extensively reviewed during the planning process but is then quietly ignored until the next strategic planning cycle. From Graham Kenny’s article I learn that my experience with strategic planning is far from unique. It seems to a common failing, with Mr. Kenny stating that strategic planning has been branded the “big lie”. One explanation given in his article that strategic planning is the so-called big lie is what really unfolds for an organization is not the same as the plan outlined in the strategic plan.

Business as usual takes over and the bold business actions described in the strategic plan get trumped by the day to day. This matches my personal experience.  With an international audience I know it is not a great idea to use a US sports analogy, but it is so appropriate here that I hope you will forgive me. When working in the US we would look for the big swing or grand slam that would propel our business to the next level, sadly we more than often struck out looking. We looked for that bold move that would ensure our success but too often just watched and did not have the courage to take action.  One of the reasons for this is that the risk reward structure for most corporate execs is skewed towards taking fewer risks. Some years ago, I was buying some land to build a plant for my employer at the time. It was in a country where the practices deemed appropriate in the West did not always apply. I had the opportunity to buy land at about 50% of the market price. However, there was some risk. If the other party renegaded on the deal after we had paid the deposit our chances of recovering that money in local court was low. My local partner in the deal could not understand my hesitation to jump at the opportunity. I explained if all went well the benefit of this cheap land would go to my employer. If it went awry I would get fired. In other words, if successful all the rewards went to my employer and a balance of the risks and none of the rewards went to me if we failed.  We did do the deal  despite the risk, and it went without any problems. In the years since then the land has appreciated in value considerably giving my then employer a fantastic return on their investment.  And no, no one has every offered to share those gains with me.

Despite my experiences I remain committed to strategic planning. My reason is that if nothing else the strategic planning process forces you to step out of the day to day running of your business, where you are making incremental improvements, fighting fires etc., to think about the bigger picture. Your goals and objectives for the next 3 to 5 years. To find the time to work on your business rather than in your business. As I said at the start my expectations of the strategic planning process are modest. Can the process be improved? Graham Kenny after interviewing several CEOs believes it can. He details 3 stumbling blocks that get in the way of successful strategic planning. 
Stumbling block number 1. Unrealistic expectations.

Way back in season 4 I did a series of three shows on the topic of strategic planning. During that season I said in an ideal world a strategic plan described how you were going to get from where you were today to where you wanted to be in 3 years’ time. That was the expectation of Mitch a CEO of a company under threat from low-cost competition from China and India. He says, “When I started strategic planning, I was looking for something that hit me in the face and said, ‘This is what you have to do to get to where you want to be.’”    Mitch was expecting a perfect plan that he could follow step by step. Sadly, events rarely unfold as we anticipate.  General Dwight Eisenhower said, “in preparing for battle I have always found plans are useless but planning is indispensable” What I believe he meant is that things will never go exactly as you planned due to external factors, in this case the chaos of war but without planning you will be less able to react to the reality of the situation as it unfolds. 

Change your mindset, Accept that you will never be able to come up with the perfect plan. Consider adopting what Carol Dweck, an American Psychologist calls a growth mindset compared to a fixed mindset. A fixed mindset believes that capabilities such as talent and intelligence cannot be changed. This is often the default in strategic planning, as plans reflect the current capabilities available to you. Therefore, you develop a rigid mechanical plan that is unlikely to deliver results over time. A growth mindset on the other had believes that you and your organization’s abilities can improve over time. You identify the talent needed to achieve your objectives and go about finding a way to obtain that talent. Either developing it in house or seeking it out externally. 

What does this all mean to you? Strategic plans need to change when circumstances change. Traditionally strategic planning is an annual exercise, but this leads to plans that are gatherers of dust rather than a living documents that provide you with a guide to what needs to be done and when. 

Many consultants advocate scenario planning. I have never been a big supporter of scenario planning. It is just not possible to foresee all potential scenarios. In early 2020 I was the Asia Pacific operations director for a US multinational. As 2020 began our plant is Ezhou China about one hour’s drive from Wuhan was responding the Corona Virus that was emerging in China, bush fires in Australia were disrupting deliveries from our plants in Sydney and Melbourne and the eruption of the Taal Volcano in the Philippines was forcing the evacuation of our employees who worked at our plant in nearby Canlubang. Only a few weeks before it would have been impossible for me to predict that scenario. However, our strategic plan that included the capacity and capability of our plants across the Asia Pacific region did provide a framework for making decisions on alternative supply chains that were available to us.

I am sure that as an entrepreneur you are an optimistic person and see many paths forward for your business. Even as a solo consultant when I jot down ideas on how I can grow my business I can fill a sheet of paper with a bullet point list of opportunities available to me. A strategic plan helps you and me narrow down our choices to those most likely to succeed with the resources we have to hand or can access.
 
Tags: Strategic planning, Business Plan, Roadmap to success, The successful entrepreneur, business common mistakes small business start-up;  Jeremy Gray, Geriatric Entrepreneur

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Episode 22 3 Stumbling Blocks that get in the way of Strategic Planning Part 2

In this episode I will continue to explore the question “Is strategic planning essential or is it the big lie? Sadly, too many strategic plans are forgotten almost as soon as they are completed. I always enjoyed the strategic planning process, even though I knew that the document I was producing would be filed away and gather dust until the next strategic planning cycle. Then it would be dusted off to see what we had said in the previous year and use that a as base for the current year’s plan. 

Why did I enjoy strategic planning if I knew that it would only gather dust? Because it was the one time in a year when we really stepped out of the day to day running of our business to think about the bigger picture, about where we were, where our industry was heading, what opportunities were open to us, what threats existed that might impact our sales, what our competition was up to. 

I used to wonder if the company I worked for was the only one that did not use the strategic plan as a day-to-day guide to decision making. But then I read Graham Kenny’s article 3 Stumbling Blocks that Get in the Way of  Strategic Planning, published by Harvard Business Review on April 28, 2022, and learned this is a common failing in strategic planning. In episode I looked at the first stumbling block unrealistic expectations, In this episode I will cover stumbling  block 2 Using the wrong model and stumbling block 3 The budget override.

Stumbling Block 2 – Using the wrong model. Graham Kenny uses an investment bank as his example of this failing. Julie and her executive team would meet annually to undertake a strategic review and develop a strategic plan. The results were usually disappointing, as each year they’d look at what they’d achieved against their plan and notice a gap. Her executive team’s conclusion was startling. “We’ve given up on strategy,” she said, “we’ve gone back to tactics.” While the conclusion may have been startling to Julie and her team, it comes as no surprise to me. We all tend to revert to tactics when faced with the day-to-day challenges of running a business. As boxer Mike Tyson put it “Everyone has a plan until they get punched in the mouth.”

Julie and her team identified a flaw in their strategic planning process that provides a useful lesson for all of us. They were using the wrong model. The model they were using one designed to produce a predetermined outcome, in this case a model from the construction industry that would result in a building.  Highly detailed in its content and designed to avoid miscommunication. Business outcomes are not certain and strategic plans need to be more flexible. If you have had dealings with the construction industry you will know that building contractors make their money via change orders. Change orders arise when you want to modify the previously agreed plans such as putting in an extra window or two. Change orders are expensive, you pay a premium for altering your plans. The same is true of strategic planning, if your plan is rigid changes will come at a high price.

To avoid this stumbling block do not get hung up on planning your business’s strategic development. A company mentioned in Graham’s article shifted its strategic planning process to resemble rounds in a boxing match. They appreciate that strategic planning is way to make sense of uncertain future. They recognize the future will not turn out as planned. But this does not mean no plan at all, since even an often-updated plan does increase your preparedness for the events that will befall you.

The company still holds an annual strategic retreat to act as a reset, but they also hold a series of mini reviews throughout the year. These meetings focus on strategy and not operations. They found, and my experience bears this out, if you do this operations will dominate. It is the default setting for most of us. Strategic thinking takes effort and focus. Setting the time aside dedicated to developing your business strategy will pay dividends. This may be a couple of days a quarter for the larger business to a couple of hours a month for a solo consultant.
Stumbling Block 3 The budget override.

This stumbling block arises because we are focused on meeting budget. Annual sales goals need to be achieved, margin targets met, expenses controlled, and profit targets delivered. 

I confess this was so fundamental within the business that I worked for that sometimes I would prepare the forecasted P&L first, then prepare strategies that would deliver that P&L over the next three years. It was not hard to do this, we had the typical expectations of an MNC. Sales growth at 2X market, profit improvement as 2X sales growth. If the market was growing at 5%, we wanted 10% sales growth and 20% profit improvement. 

Strategic planning experts will scoff at this approach. Quite rightly, they will say developing plans that meet expectations will achieve only that at best or more likely fall short. Better to aim high and miss, rather than aim low and hit the target. But I would bet that the P&L first and strategic plan second happens more often than many strategic planners would care to admit.

If I am right, why should this be? One CEO I worked for used to say budgets should be enabling, not restricting. He took the review that when developing plans, you should allocate and budget for the resources needed to deliver those plans. He was right but regrettably this is rarely done. Even if the resources are accounted for in the strategic plan, they are often eliminated at budget time when the aggregate P&L rolls up to number less than deemed acceptable. 

When it came to strategic planning and resources I used to keep in mind the Rolling Stones song “You can’t always get want, but if you try in time you might find you get what need”   

The other side of the coin is that there is no mileage in developing strategic plans that you cannot afford to deliver. Theoretically a solid business proposition should be capable of being self-funded, at least over time, if not initially. But there is always that risk element and if you cannot afford to take the bet on success then the idea should be dropped from your plan. Strategic planning is about choices, and that includes the choice to say no to an opportunity.

For the coach or consultant, I believe my P&L first approach is ideal. Decide on  your earnings and expense targets over the next 3 to 5 years and develop plans to meet those targets. Review progress on a regular basis, say every six months and adjust if necessary. I suggest six months because it takes time to determine if your earning strategy is working. Abandoning an approach after 3 months effort is probably too soon.

What do I take from Graham Kenny’s article?

Strategic planning is not the big lie, it is essential to all types and sizes of business.

Be realistic in your expectations. Your strategic plan is not a panacea to your business problems or a guaranteed pathway to success but a guide to the future.

Plan at the right level of detail for your business. Your strategic plan is a 30,000-foot view of your business. Your operational plan is there for more detail.

Budget the resources needed to deliver your plan. If they are not available modify your plan.

Strategic planning puts your company into proactive mode rather than reactive mode. You will make decisions based on a clear vision of the future which will lead to better decisions. This in turn will deliver a competitive advantage and improved growth and success.

Tags:  Strategic Planning, Planning resources, Operational planning The successful entrepreneur, common mistakes in business, small business start-up; avoid these common mistakes of business, mistakes in business, IBGR.network, Jeremy Gray, The Geriatric Entrepreneur
 
Episode 23 Strategic Planning for small businesses
Do you have a goal for your business? Do you want it to grow larger in the next year? Do you want to increase sales and expand your customer base? And, even if you do, do you know how your small business is going to accomplish these goals? It’s okay if you don’t. Doing some strategic planning can help put you in a better position to succeed.

While there are as many ways to do strategic planning as there are companies that engage in the process, the goals of many small businesses are pretty similar. In the 2017 Small Business Marketing Trends Report, small business owners stated their primary goals were driving sales, retaining and re-engaging customers, and building brand awareness.

Through the strategic planning process, small business owners can identify goals like the ones above and develop actionable strategies to achieve them.

Increased Organizational Alignment

With a properly made strategic plan, everyone in your business can be on the same page. They understand the direction of the business and what the goals and objectives are. They also get to know the strengths and weaknesses of your small business, as well as the opportunities and threats posed in your specific industry.

Strategic planning is an opportunity for you and your employees to exchange ideas. While you can provide your employees with an interesting view of the business, they can share their own unique opinions.

Because everyone is involved in the strategic planning process, it creates a sense of accountability for your employees. They will know what you want to accomplish with the business, and they’ll focus and work toward achieving the identified goals.

When you’re starting out with the strategic planning process, build a strategic planning team. Schedule a regular meeting with your employees to have discussions and brainstorm. You can keep an agenda to make sure discussions stay on track, but also be flexible and open-minded with the sessions.

Determining Your Small Business’s Direction

One of the benefits of strategic planning is choosing the direction the business is going toward. This in turn allows you and your employees to focus on working toward achieving your specific small business goals.

When the direction of the company is spelled out in your strategic plan, everyone knows where you’re going—and not just your employees, but also people outside of your company. The public, customers, clients, vendors, and investors will know how you want your business to move forward.

In your strategic planning meetings with your team, ask them questions about the business. Ask them what they think is working and what can be improved.

You also can speak to people outside of your company. Holding discussions with vendors and investors or analysts can shed additional light on your industry and competitors—and what changes may be coming down the road.

When you have gathered enough information, you can determine the best path to follow to help your business grow and succeed.

Setting Small Business Goals

Strategic planning also gives you the opportunity to set meaningful, realistic, and measurable goals and objectives.

A measurable goal includes a timeline and specific quantity. For example, one of your goals for your business may be to have retained 60% of your customers at year-end.

Don’t be afraid to have a mix of short-term and long-term goals and objectives. This allows people to see what you want the business to accomplish within a year, while also knowing what to work toward for the next two or three years.

Here are some examples of short- and long-term goals and objectives:

• Improve internal communication by sending out a weekly newsletter throughout the coming year
• Increase this year’s revenue by 10%
• Increase customer satisfaction by 25% over the next two years

When it comes to setting goals and objectives for your small business, it’s important to be realistic. While everyone wants to see their business grow in the future, it may be unattainable to triple the size of your customer base within a year.

Evaluating Progress

The strategic planning process doesn’t end when you create the first version of your strategic plan. In fact, an important part of the strategic planning process is to regularly review and evaluate your business’s performance against the plan.

Evaluating your business’s progress allows you to see if you and your employees are on track to accomplish your goals. It lets you see if there should be any additional changes made in the way your business operates to help accomplish the desired goals.

When you’re creating your strategic plan, consider putting in a section about how often the document will be reviewed and evaluated. It also may help to identify someone in the business—whether it’s you or another employee—who will be responsible for reviewing the strategic plan. Equally important is communicating with the rest of the business the current progress toward the goals and whether any changes were made to the strategic plan.

If you’re in a fast-paced industry, such as technology, you may have to review your strategic plan on a more consistent basis, like quarterly. At a minimum, it’s a good idea to evaluate your strategic plan once a year.


Helping Build a Competitive Advantage

When you’re in the middle of strategic planning, you’ll perform market research, which lets you examine the industry your business operates in. Looking at your industry and thinking about ways you can address challenges to your business puts you in a proactive position, which can offer a competitive advantage.

While you’re strategic planning with your team, you’ll look at whether there are any upcoming changes in the industry that can pose a threat to your company. And you’ll look to see where there are opportunities for your small business to grow.

When you identify any threats or opportunities, you’ll address them in your strategic plan. For example, say that—during the strategic planning process—you find out about a startup in the industry that may grow to become a competitor in the next two or three years. You can examine the startup now and see how you can update your products or services to better appeal to customers.

What’s important is that strategic planning puts your business in a proactive position. You won’t be making decisions with a reactive mentality, but rather you’ll be in an anticipatory mindset. This gives you a competitive advantage and a better opportunity to grow and succeed.

For a small business owner, strategic planning helps you create a document that details the current status of the company and the direction you want to take it in. It’s a process that helps your employees understand what the goals and objectives are and that contributes to the growth and success of your small business.
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Tags: Strategic planning, Business Plan, Roadmap to success, The successful entrepreneur, business common mistakes small business start-up;  Jeremy Gray, Geriatric Entrepreneur

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Episode 24 Mission and Vision Statements – The foundation of your strategic plan
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A well written Mission and Vision Statement will provide guidance and motivation to you, and if you have them, your employees. It will help to ensure your employee are working towards a common purpose. As an entrepreneur or business owner this is the why you started the business in the first place. 

What is a Mission Statement?

A mission statement is a short summary of an organization’s reason for being in business.  Ideally it should be one sentence that is easily remembered by employees, customers. and other stakeholders.
What is a Vision Statement?

A vision statement is a short description of an organization’s aspirations and its place in the world, while your mission statement should be easy to remember your vision should resonate with as many people as possible. It should help them align with your company’s values.

I am going to look at three well known and successful companies. How much of their success is due to their mission and vision statements I would not like to say but I am sure it does not hurt. These are three of the best mission and vision statements I have found on the internet.

Firstly, Tesla a company much in the news today.

Mission statement: To create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles.
Vision statement: To accelerate the world’s transition to sustainable energy.

Note the clever use of the word accelerate in the vision statement with its connection to cars and moving forward. The vision statement also allows Telsa to move beyond cars to power storage solutions. 

The focus on sustainable solutions using electric cars and sustainable energy will resonate with many people across the globe. It is this vision of the future that has made Elon Musk, the founder of Tesla among other futuristic businesses such as SpaceX one of if not the richest man in the world. 

Nike, the athletic wear company’s mission, and vision may seem plain in comparison to Tesla but with a clever twist they have made in applicable to everyone.

Mission statement: Create groundbreaking sports innovations, make our products sustainably, build a creative and diverse global team, and make a positive impact in communities where we live and work.
Vision statement: Bring inspiration and innovation to every athlete* in the world.

The mission statement may seem uninspiring, but it does provide guidance to their employees and communicates to the world their values. 

The phrase make our products sustainably will guide employees to find more sustainable solutions and to put sustainability high on the criteria list when making decisions. 

Build a creative and diverse global team; will drive hiring and retention strategies. Important in a company that sources from countries such as Vietnam and Bangladesh. Reminding employees from those countries that they too are an important part of the Nike team.

Make a positive impact in the communities where we live and work reminds employees and manager of the company’s social responsibility.

However, for me it’s the vision that is really clever. 

Bring inspiration and innovation to every athlete* in the world. 

Just behind the word athlete there is an asterisk, and a foot note explains If you have a body, you are an athlete. By the asterisk and footnote Nike shows it is there for everyone, not just for the professional or high-performance amateur. It also promotes a vision of equality. We cannot all be Michael Jordan but that does not mean we are any less important to Nike. 

The final example for today is IKEA the iconic and most successful furniture retailer around the world. 

Mission statement: Offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.

Vision statement: To create a better everyday life for the many people.
The mission statement does sum up what IKEA does. Design is key. It is their core competence. Although IKEA  company’s headquarters are now in the Netherlands the design studios remain in Sweden. There they focus on making well designed functional home furnishing products. The prices so low that as many people as possible will be able to afford them part of the mission statement is accomplished by outsourcing the manufacturing processes to companies’ skill at making products as economically as possible.

The vision statement – To create a better everyday life for many people must inspire IKEA’s employees. Who could not want to work with the goal of making peoples everyday life special?

I am sure almost every Tesla, Nike and IKEA employee knows and can repeat their respective company’s vision.

I will finish with a story I read which I cannot guarantee to be true, but if it is not true it should be. The story is set at a US NASA facility in the mid 1960’s at the height of the space race when America was vying to be the first country to put a man on the moon. The story goes that a Janitor was asked what was he doing? He replied he was helping man go to the moon.

The janitor saw his role in the big picture. Although some might see the janitor’s role as menial without clean bathrooms NASA would not be able to hire the best talent needed to launch a man to the moon.

That is what you want to be trying to achieve with your mission and vision. To ensure every employee to understands the mission and vision of your company and to understand the role they play in accomplishing those missions and visions. 

The key to using the strategic plan as a decision-making tool is to ingrain the strat plan into your company’s culture. When faced with a  decision employees should ask which solution advances progress towards the strategic plan objectives.

When discussing options with their employees managers should constantly refer back to the strategic plan

Tags: Strategic planning, Business Plan, Roadmap to success, The successful entrepreneur, business common mistakes small business start-up;  Jeremy Gray, Geriatric Entrepreneur
 
I am committed to helping entrepreneurs succeed. I can bring the experience of 30+ years of experience at the C-Suite level in an MNC from Europe, North America, and Asia. Combine this with eight years of helping a diverse range of businesses and I can provide you with practical solutions to any difficult problem may be facing. 

Please do not hesitate to contact me for chat via the following links:
mailto:jeremy@business-in-asia.org
Or schedule time via Calendly:
https://calendly.com/3-continents-consulting
My websites include:
https://business-in-asia.org/
https://thegeriatricentrepreneur.com/

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