Growth Insights for CEOs

Why Your Strategy Needs Specific Numbers

Posted by Guest Blogger, John Myrna



The Strategic Planning Process

The strategic planning process is simple in concept. You gather your planning team of five to twelve executives and over the course of two days, you answer three basic questions:

  • Where are you today? Pinpoint the key issues, identified by prioritizing weaknesses, opportunities, threats and strengths.
  • Where do you want to be in the future? What are your long-term vision, focusing mission and strategy?
  • What do you need to change to get there? What are the four to six strategic goals that will change the status quo and accelerate getting your company to where you want to be?

John Myrna Blog Graphic resized 600Think of that one-page visualization of your five-year strategy as the picture on the jigsaw puzzle box. Everyone in the company has a mental picture of the future they are building when they prioritize their daily actions -- their pieces of the puzzle. When everyone has the same picture in mind, there is a natural coherence, with individual actions creating synergy. (When people have dramatically different visualizations, individual actions clash and create frustration and cynicism.)

 

Is Being Specific Dangerous?

In one of my early strategic planning workshops, one of the executives in attendance pushed back when I explained that you needed to be specific when painting that picture of the five-year future. I explained that you need to indicate how big you want to be, how profitable, what markets you want to be in, what products you would produce and so on. Vague phrases like "grow bigger" and "be more profitable" aren't useful. The executive, a strategic planning officer from the Pentagon, was quite vehement, exclaiming: "Never be specific, never!"

When I asked him why, his answer gave me an "aha moment." He said, "Never be specific because your management will forget the context of those numbers and use them as a club. Only a fool creates a club that will be used against him." The other attendees nodded their heads, since they had all experienced the club at one time in their careers.

This resistance to creating a meaningful strategy with specific numbers comes up periodically in the planning meetings I facilitate. In addition to the concern that "management" will use numbers as clubs, there is a fear that being specific:

  • could prevent the company from taking advantage of serendipitous opportunities.
  • could lead to counterproductive moves, such as taking on unprofitable business just to hit the strategy's five-year revenue goal.
  • could keep the company from adjusting to new information and changes in the environment.

However, I remind planning teams that in order for their strategy to communicate effectively, it must include specific numbers, such as “grow to $15 million with a consistent pretax margin of 12 percent.” Vague statements such as “grow larger with a superior profit” aren’t meaningful. All numbers should be estimated to the “ballpark” level of accuracy, as close as the team's current knowledge allows.

The challenge is to create a specific strategy that won't be misused. Here's one tool that I've found really helps: taking "The Pledge."

Take The Pledge

At every planning meeting I facilitate, I ask everyone to put their hand over their heart and repeat after me:

“I will never do something stupid.”

Go ahead, trust me.

“I will never do something stupid because of something written on a sheet of paper.”

This pledge and utilizing the processes of strategic planning that incorporate ongoing adjustment will free you and your team to develop, implement and manage the right strategies for your company’s success.

Key Questions for Your Planning Team:

How long have you been saying that you will develop your strategic plan, but you haven't yet done so? Why? Don't let the fear of being specific hold you back.

Author

John Myrna Book Cover  resized 600John Myrna is a strategic planning facilitator. He has refined a practical, pragmatic, and proven original strategic planning process that is perfectly in tune with the needs and capabilities of small to mid-sized companies and Fortune 500 corporate divisions. He has been a national speaker for the Association of Computing Machinery, and the featured luncheon speaker for the CEO Clubs in Baltimore, Boston, Chicago, Los Angeles and Washington. In addition, he is a Vistage speaker, giving talks on strategic planning in Atlanta, Denver, Los Angeles and Toronto.

Topics: Business Growth Strategy, Business Planning