On a weekly basis I read about four to five different blogs, one of which is the Harvard Business Review blog. As I was getting prepared for our upcoming seminar on February 29th regarding strategic planning, I reflected on a couple points I’ve learned over the past several years regarding strategic planning, work life balance, and a business’s financial performance.
- While reading business books and listening to experts can provide some great ideas, they should not be followed blindly nor should you expect dramatic changes in financial performance when you incorporate these ideas into your strategic plans.
Blogger Andrew McAfee recently wrote a great post on the skepticism that should be applied to ‘experts’ entitled ‘Managerial Intuition is a Harmful Myth.’ In the post, McAfee argues for a healthy dose of skepticism combined with good old fashioned number crunching in order to make business decisions.
I think a business book is analogous to taking a pill or reading a book about weight loss. At the end of the day you have to put in the work, thru proper diet and exercise, to maintain a healthy lifestyle. Business really isn’t that much different. It takes a lot of hard work and diligence in order to generate a consistent financial return. And, in fact, over time it is nearly impossible to consistently outperform your peers via profit margin / cost structure, and even growth rate. Therefore, while it is important to innovate, the consideration should be innovation for the sake of sustaining the business and increasing market share at a reasonable rate, not for determining the ‘killer long term blue ocean’ strategy, as eventually competition and markets catch up.
So, what can you do with strategic planning, experts, and business books? A lot, actually. But most of the good output I would postulate will come from solving structural financial issues that are causing you to potentially underperform relative to market leaders OR to resolve work life / quality of life issues which ultimately will yield the same financial results but with much less stress, and therefore a better quality of life.
- 2. Focus on the ‘Why’ when you’re thinking of strategic planning objectives.
‘Why’ is important to do anything in a strategic plan? Survival? Better financial performance (and why do you need better financial performance)? A great sales quote is ‘growth for the sake of growth is the goal of cancer.’ I think understanding and asking ‘why is that important’ at least two or three times as you are strategic planning yields a much better set of initiatives than just simply brainstorming ideas for the sake of ideas and then prioritizing a list of ‘stuff to do.’