Mastering Organizational Strategic Planning: Design, Align, and Democratize

We discuss what it takes to master strategic planning-- by bringing the right people together to find the best path forward in your organization, then keeping them aligned from top to bottom.

Transcript

Dr. K  0:03  
Hello, and welcome to the realm. I'm Dr. K, I bring the psychology

Dr. D.  0:08  
and I'm Dr. D, I bring the strategy. We are business psychologists and your guides to the executive realm where we bring psychology and strategy together so you

Dr. K  0:17  
can bring your best to your C suite, your teams and your customers. All right, today we are talking about mastering strategic planning, bringing the right people together to find the best path forward in your organization. So let's get to work. So dr. D, as you work with organizations on strategy, what indications do you look for on the health of an organization's strategic planning process?

Dr. D.  0:40  
The strategic planning process is almost the operating system of an organization. It helps guide decisions it helps inform where you want to go, it aligns your teams. And it really does provide a map and a framework to bring your entire organization together to achieve results. The things that I look for, does an organization have a multi year strategic planning process in place they rely on and that they trust and utilize? Is it clear? Is it flexible? Does it give guiding principles and allow flexibility over time to develop real goals in real action? Is it understood across the organization? Oftentimes, strategic planning is really well understood at the C suite level. But if you talk to mid level managers or leaders or elsewhere in the organization, they may not feel as connected to the strategic planet may be the sidereal thing that the senior leaders do. Is it integrated across the organization in that people know how to execute against the strategic plan are initiatives that are generated by the strategic plan funded appropriately? And how does the leadership teams govern the initiatives that are generated by the strategic plan? Are they actively engaged? are they learning from the process? are they bringing that back into learning so that they can adapt and adjust their strategic plan in subsequent years? Are they actively refining it? Right

Dr. K  2:04  
23%. So we'll just round up to a quarter of organizations actually have a formal planning process, my brain doesn't work exactly like yours does, I kind of just throw stuff against the wall and whatever sticks. Yeah, that's where I go, and you do a lot more planning and put things together. But I found that it was interesting within an organization that only a quarter have formal planning. And the other thing that was interesting, since I'm gonna bring all in all my stats, we talk especially you about the mission and values of an organization. And it was, again, a quarter of the employees only know what the mission of the organization is. And in strategic planning, the goal is to integrate the mission and the values of the organization within the strategic plan. The vision is what we're trying to get to, if people don't know they can't be engaged, they can't help they can't be a part of the process.

Dr. D.  2:54  
Yeah, it's tough for people to really understand what their goal is at work. And we talk about mission. So frequently, in our conversation, when I talk about mission, I don't mean that in terms of some lofty mission statement that a lot of organizations have when they create their mission and their vision, your mission is something that should be simple, it should be a call to action and who you're serving, I like to use the military example, we find that the mission of the military is to protect the country, the action is to protect who you're serving is the country is your community. Your mission should be as simple as that what you're trying to deliver to the community that you serve, and really keep it simple. People can relate to that people can replicate that they can communicate that your strategic imperatives that are critical to designing your strategic plan, what are those key things to be able to deliver the mission for me, the strategic imperatives are the next step in the building block of connecting your strategy to your mission?

Dr. K  3:54  
Well, you for our listeners, define what you mean by imperatives.

Dr. D.  3:59  
These are the minimum and necessary things an organization needs to accomplish. You can call them goals, you can call them targets. So when I think about strategic imperatives, I think of how are you going to actually deliver products and services to your customers? Do you focus on the customer? You focus on? What does your organization and your team need to look like to support those customers? How are you going to keep those customers from migrating to a competitor? Or how are you going to bring customers to you from a competitor? And then the last piece that you think about is what's the organizational health the outcomes of doing all those other imperatives properly?

Dr. K  4:36  
Right yeah, the stakeholders I would agree whether they are internal stakeholders meaning the employees are they external meaning the customers are the most important because if you don't have well first if you don't have customers you're not selling or you're not you No one's buying your product. So really, you're not gonna make any money anyways and then with the internal stakeholders, the the employees if they aren't a part of what's going on if they don't Know your values, if they don't at least somewhat believe in the values or the mission or the path that you're going, you're gonna lose money with them disengaged employees are costing just in the United States alone between 400 and $500 billion a year, if you are putting together a new strategic process and plan what needs to be done from our leadership position, that's who they're getting all of their information from that to they are going to model their behaviors after it would be important to get everyone engaged, or at least as many people as possible. And that isn't just the maybe lower level or mid level employees, that includes your upper management, they're just as important to have engaged in this process, believe in the process, or it's just gonna kind of dominoes kind of crumble along the way, you might

Dr. D.  5:48  
call it democratizing your strategic planning process. Most organizations, I love this statistics, say you're brought in early because only about 25% of organizations actually have a strategic planning process. And when that strategic planning process is executed, it's usually living within the executive team, the middle level managers, frontline managers, and the employees don't connect with it. And they certainly don't feel like they can contribute to the strategic planning process. It's really important that in organization strategic planning process is well defined and well understood and clearly articulated. But it also has to bring in the perspective from across the organization, not only ideas of how to achieve the mission, but also what is the capacity for change what areas where prioritization will yield the biggest benefit? How do you actually pick the right projects that are going to have people motivated, have people inspired and have people organized willingly around delivering on change? employee engagement in that process is really important in our strategic planning process, when I'm working with organizations on developing their strategic planning process, strategy does start with the executive team. But the next and most important step is engaging your leadership team across the organization at all levels to translate that high level strategy into executable strategies at each department level at each team level and getting team members to sign up for delivering on those results so that you can actually see that transformation, that delivery on that strategy at every level of the organization.

Dr. K  7:35  
Yeah, absolutely agree. Because I mean, yeah, it's great if the C suite knows what the plan is, and what the process is, if people below that don't understand what's going on, if they don't know what's happening, and then all of a sudden, here's all these changes, it can disrupt. It can disrupt the team cohesiveness, it can disrupt, psychologically, the team itself, and then if you throw a wrench, it can cause a lot of disruption along the way. So it's important to talk as much as it is transparency is important, because then they feel a part of the organization, they feel a part Yeah,

Dr. D.  8:10  
and people can connect with different parts of the strategy. Your strategic goals might include improving employee engagement or retention within your organization. Or it could be that you want to expand into a new market or offer a new product or service, how people connect with each of those, that knowledge allows people to internalize, reflect and build relationships with people on how to solve those problems. And it becomes much clearer in how a strategic plan translates into execution, who people should be working with and how they should be working together. Thinking about improving employee engagement, the team members are going to engage with that in a different way than they will if you want to expand a new product or service organizations, team members, leaders are wise and bring their perspectives to these initiatives. And they'll think about things that this senior leadership team hasn't thought of. They'll help expose risks or help expose opportunities. You just won't find it unless your strategic plan is more widely understood in your organization.

Dr. K  9:15  
Absolutely. You know, you sent me that one article about outsourcing what they mentioned was instead of outsourcing, it's in sourcing. So it's, I think it was IBM, they set up a system where they were able to and they were able to talk about different things. And so the organization was able to learn about people's concerns, different ideas, were able to be thrown out and then people were able to talk about it. Just because someone might be a lower level employee doesn't mean that they haven't thought about the products that are out there or they haven't thought about new ideas. You know, instead of outsourcing and spending more money outside of the organization, see what you have within the organization. The larger the organization you have, the more information the more ideas we always talk about communication. within an organization, and these are people that are already within your organization that already know the mission and the values, and that would be a great way to start instead of going with people that are just kind of looking in from the outside as well.

Dr. D.  10:11  
And the article that we're talking about is called democratizing strategy, how crowdsourcing can be used for strategy dialogues. And that's exactly right. The idea is how do you bring in more voices that you can't have your whole organization in the room when you're trying to design your strategy, but you can understand where the pain points are an employee needs, you can definitely understand how your customers engage with you in the right or wrong way, and how you can improve that experience what technology and infrastructure, you might need to be prepared for whatever's to come. Even more importantly, you have employees that came from your competitors, or know people at your competitors, you really want to understand how your competitors are thinking about the market. And it really is easy for organizations and common for organizations to bring in consultants and outside voices to help inform that strategy, like you said, but I think an organization once they have their strategic planning process set up properly and built in a way that can collaborate, communicate and collect information from across the organization, you don't need as many of those outside resources, you're really relying on the native intelligence within your organization and bringing that in a way that can help you make better decisions.

Dr. K  11:28  
And something that came to mind. All employees are important to an organization at a management leadership C suite level, there are a couple things that are crucial to get other employees engaged to make this process happen. And one is that we always talk about it's always communication, having a dialogue. However, that dialogue will look like we understand that this planning process will begin most likely in the C suite level. Once you have a thought or some ideas, you bring in the management or the leaders of the team so that it starts getting integrated. Because again, you know, there are times we talked about management needs to model what they want from their employees, they need to believe in this plan. They also need to be able to answer any questions that people might have around this planning process. As well as there's got to be a level of communication, understanding as well as patience and trust and trust. Absolutely. Traditionally, in organizations, it

Dr. D.  12:26  
is a top down evolution, the leadership team formulates a strategy, they go off for a couple of days, they formulated the strategy, and then they impart their wisdom out on to the organization. But really, the strategic planning process should be a bottom up approach. And then a top down approach. So you collect information, you collect understanding, you really try to get as much data and information you can from all parts of your organization and all parts of your market and bring that up together into a better understanding of where you can position your organization in the market that should help you understand where the gaps are, and being able to achieve your mission. And then you can translate those into how does that affect your strategic imperatives to achieve that mission, then it becomes distribution down into the organization. But it's not just a here's what our strategy is, it should be, here's our strategy, we want you to translate the strategy into your department and your team's understanding and how they're going to support delivery of this, then share that with your colleagues with leadership, there should be a process to bring that full circle so that you can evolve your strategy and make sure that people in the organization really understand how they can contribute to delivering on that strategy. Again,

Dr. K  13:48  
I bring it up all the time. But the communication the crucial part, because if there's no communication or minimal communication, that leads to people's interpretation of the little bit of information that they have, it leads to misconceived perceptions, they're going to take one little thing and set it out. And just and all of a sudden, there's going to be a huge narrative, but it might be completely off base. And with all of that leads to a lot of negative stress, a lot of worry, it's just the snowball effect starts to snowball, and it ends up in an avalanche with that lack of communication. So that's where again, it's important for leaders to communicate and ask questions so that they can better understand how to communicate

Dr. D.  14:30  
when we talk about communication. And we as we often do, because communication is at the at the heart of how people interact with each other at work. We talk about having a common shared language and at the beginning of this conversation, I said something along the lines of your strategic planning process can become your operating system for your organization. And the nice part about having a widely understood widely shared collaboratively developed strategic plan that is proliferated across your organization. It gives you the opportunity and your employees an opportunity to raise questions in a way that's constructive in developing and communicating a longer strategic plans if you have a strategic plan, and an executive or a team leader, or even a supervisor develops a roadmap or a strategic plan for their own department that aligns with that strategic plan, because you have the opportunity to just say, Hey, I don't understand this initiative helped me see how that fits into the broader strategic plan, or it gives an employee to say, I don't understand why we're doing this, we're spending all this time and money looking at Project X. And it just doesn't make any sense to me, you have a communication tool to allow a leader to say, look, this is how what we're working on fits within our strategic plan. And here's how our strategic plan fits within the larger organization strategic plan and our collaborators department strategic plan, people can say we're spending a lot of time doing this thing over here, I don't see how it fits into the strategic plan, your employees should feel comfortable. Your team leaders, your your executives should all feel comfortable saying I don't see how this supports our mission. I don't see how this supports our strategic imperatives. Why are we still doing this, it gives people the opportunity to say I think we should stop. And that is where brave leadership comes in and saying we're not going to keep doing the same thing that we always did, we're going to stop doing something that doesn't support our mission. any longer,

Dr. K  16:24  
you talked about flexibility at the beginning, it's important for the organization as a whole to have some flexibility, you know, and that that is a struggle for people because flexibility means change and changes can be uncomfortable. However, it's important to when you better understand why this process is being put in or why this initiatives being in, it's being open to that change. But like you said it, leaders need to create that space for employees to feel comfortable enough to be I don't understand this, explain it more. Okay, give me you know, give me a minute, give me a hot second to be able to rearrange how I do certain things. They're not saying that they're against it, or they're not gonna do it, but they may need a second to be like, Okay, I understand this process. Now, let me change my personal process. So my micro processes to be able to go with that with the next level process. And that's important for the for the leaders to be able to allow space for that this is over a period of time when I

Dr. D.  17:22  
think about flexibility whenever I see an organization's strategic plan, and it says it's our strategic plan from 2018 to 2023. And they have like these timeframes on it. It says to me, there's inflexibility and a lack of persistence in managing their strategic plan. So when you're talking about flexibility, you think about all the dynamics that can happen within a market within a two or three year period. Look at COVID it changed the way that we think about how we work might change many organizations, products and services that they offer changes the viability acquisitions are happening in your market all the time. And so the needs of the market, the needs for the customers, the technology that's available are transformative to your business all the time. Flexibility is critical. And your strategic planning process can be a once every three years or once every five year evolution. It has to be every year and it has to evolve as the market conditions change. You're absolutely right Dr. Kay, as an organization hits some external force, you have to bounce that change and the risks of what could happen against your strategic plan and evolve that plan actively

Dr. K  18:36  
right absolutely are not feeling like you are cemented in to whatever plan or process or way of doing things will allow so much more productivity, so much more imagination, if the organization as a whole and then in a micro and macro level, not allowing yourself to be cemented in this is the way and it will always be the way can dramatically change where an organization goes and where a leader can go where a team can go and where each individual can go within that organization.

Dr. D.  19:07  
100% important part of the process, when you have your strategic imperatives when you have these plans, they do have to be relatively open ended when you're talking about the health of your organization and you're talking about growth. Yeah, you have to say I want to grow this much by a certain amount or I want to have X percent of margin or to be able to sustain and invest in your business. A good strategic plan should look out beyond three years beyond five years, even beyond 10 years. It should be aspirational in nature, but it should develop momentum and initiative.

Dr. K  19:39  
Absolutely. So with everything that we've said, dr. D, what can leaders take away from this discussion,

Dr. D.  19:45  
it's important that your strategy is organized around your organization's fundamental purpose, your mission, your mission shouldn't be an elaborate ethereal statement, rather a simple, easily understood and memorable organizing statement that exemplifies who you serve and How you serve the ball strategy starts in the C suite it should live throughout the organization. Leaders of all levels should understand the organization's strategy, develop and aligning strategy for their department or team and articulate the actions and needs to meaningfully contribute to achieving the organizational ambition. your strategic plan should not start with financial targets. Rather, build your expectations around your customer then enable your team and then how to capture for your competition. Your last step should be to determine how these contribute to the financial health of the organization. For each imperative define your Keystone measurement. Be clear on the single measure for each strategic imperatives, your strategic plan will inspire an array of strategic initiatives have a process to evaluate and prioritize and approve fund and monitor progress have clarity on what makes an initiative successful and when inflight initiatives should be adjusted or halted how your organization brings people together in the planning process and empowers them to support the mission is something truly unique to your organization. It is the operating system for your team. Make sure you get it right Dr. K, what's on tap for next week?

Dr. K  21:06  
Well, next week, we will be talking about leadership styles, looking at the strengths and weaknesses of different natural styles, the biases that are introduced when a person with one style works with another style and how to flex your style to maximize and your team's success.

Dr. D.  21:22  
Yeah, this is something you're really passionate about.

Dr. K  21:25  
Absolutely. It is something that I do work with

Dr. D.  21:27  
should be a great discussion. And to all of you joining us on this journey to the realm. Thank you so much. I'm Dr. D,

Dr. K  21:33  
and I'm Dr. K And we are looking forward to your next visit to the executive. Yeah, get it right