Francis Wade | How to ensure your plan isn’t lacking a strategy

Sometimes strategic plans aren’t strategic at all. Here’s why and how to prevent this from happening.

Since joining the management team, you’ve expressed curiosity about the existing strategic plan. You ask for documentation because your new colleagues’ explanation is perplexing. Scanning the outputs from the last planning project might be beneficial, you think.

Your hope for answers is dashed when the materials exacerbate your problems. They consist of a large number of words and diagrams and, after some time reviewing them, you confess to feeling lost. You still don’t see the strategy emerging from the pages.

Relax, it’s not you.

Instead, the framers of the strategy weren’t clear themselves. More often than not, the process merely produced a wish list and a laundry list.

Their wish list is similar to what a child would write to Santa. It encompasses all the good things they could dream of – a pony, a helicopter and a 65-inch television. So does their strategic plan.

Conversely, their laundry list is a disorganised set of ad hoc tasks. The reason behind its contents remains a mystery. Even when items are grouped for readability, their source and purpose remain unknown.

But, maybe I am being too hard. After all, every strategic plan includes goals and action items, so what are these two lists missing?

In summary, they fail to convey the essence of the chosen strategy. Consequently, nothing separates it from plans in other similar organisations.

At the heart of the strategic plan should be a missing element - a strategic hypothesis. It may never be officially called that, but here’s how it can be formed.

Start by developing an essential hypothetical element.

While the term ‘strategic hypothesis’ may seem abstract, the idea behind it is simple. To begin with, understand that the only way to test if a strategy is sound is to implement it. Until then, you are essentially making an educated guess – a hypothesis, defined as a proposed explanation made on the basis of limited evidence as a starting point for further investigation.

Unfortunately, you can’t do any better. The unpredictability you face is inherent in all true strategic planning. Why?

All strategy discussions begin with incomplete information, first and foremost. Typically, valuable historical data is missing that can predict success.

Additionally, the human element plays a significant role. The collective understanding of a leadership group in your company far surpasses that of a single person. However, their communication with one another is likely to be flawed.

Furthermore, while implementing the plan, you face constant external pressures. The environment is always changing in ways that are unpredictable to you.

Strategic planning which extends more than two to three years is particularly challenging because of these obstacles. Consequently, a few executives are hesitant to give it a try. For them, leaving things to chance is easier than forging a hypothesis requiring multiple steps, millions of dollars, hundreds of people and several years.

Should your company give up before even getting started?

How to Use a Strategic Hypothesis

Fortunately, there are positive examples of companies who included game-changing strategic hypotheses in their plans.

For example, Steve Jobs and Apple computer formulated a 10-year strategic hypothesis in 2000. At the time, the dot-com bust was in its full throes, but they still had the courage to instigate a long-term transformation. Here are their old and new strategies, plus the switch they made to get there:

● Old hypothesis: success comes from selling high-end, sophisticated desktops.

● New hypothesis: success will come from selling an interconnected set of devices.

In other words, their new hypothesis was to innovate and connect devices like the iPod, iPhone, iPad, iCloud and Apple Watch. Together, these invented products could be fashioned into a fresh, interwoven experience. To receive this interconnectivity, they theorised that customers would pay a premium.

Did it work? Their intervention took the firm from near-bankruptcy to becoming the world’s most valued company.

But they weren’t the first. In the 1990s, food conglomerate GraceKennedy suffered from an inability to generate foreign currency at a time when exchange rates were in free fall. It crafted a 25-year vision, GK2020, to enter financial services and overseas markets, which saved it from disaster. It went on to produce monumental results.

In all strategic hypotheses, there are intricate links between proposed actions and hoped-for outcomes. Obviously, Apple and GraceKennedy could not guarantee success with the little information they had.

As such, there was no precedent for the course they embarked on.

But, take a pause and ask yourself: Can your executive team sit down to craft a game-changing strategic hypothesis? Does it have the motivation? And the skills to look past the short term?

While the creation of such a plan isn’t easy, it could make all the difference.

Francis Wade is a management consultant and author of Perfect Time-Based Productivity. To search past columns on productivity, strategy and business processes, or give feedback, email: columns@fwconsulting.com

_________ EDITOR’S NOTE: Francis Wade’s column of November 12, 2023 was published under an incorrect byline template. We apologise to Francis for the error.