For some organizations, It’s time to depart from the “traditional” strategic planning process. Oh, don’t get me wrong. I’m not suggesting that the traditional, “tried and true” strategic planning process doesn’t work. For it does. In fact, I’ve successfully used the traditional process in my consulting work with clients for the past 20-plus years. It’s just that, in today’s “new economic reality” - the world of information technology, of networked organizations, of knowledge workers - the traditional process is, in many instances, a “force fit.” Yes, I'll explain…

Let’s first begin with a brief look at the traditional strategic planning process. Please see Figure 1.

The traditional strategic planning process consists of four fundamental steps… situation analysis, mission statement, objectives and strategies. The first step, situation analysis, includes a look at internal strengths and weaknesses as well as external opportunities and threats. It’s purpose is to answer the question “Where are we today?”

The mission statement declares what business the organization is in, who its customers are, and what specific benefit the organization provides to those customers. Objectives, of course, are quantified measurements of success. They address the question, “Where do we wish to arrive, and when?” As such, they characterize the management team’s vision of the desired future state.

Finally, strategies are the activities which the organization will implement to achieve its objectives (the desired future state). As such, strategies answer the question, “How do we get from here to there?”

Unfortunately, there is one major problem with the traditional strategic planning process. It simply isn’t suggestive of the timely strategic issues which the planning team must discuss. It doesn’t demand that the planning team wrestle with strategic issues of the 21st Century. For example, it doesn’t specifically recognize the significance of the knowledge worker individually and of all knowledge workers collectively - as a learning organization.

Also, it doesn’t directly point the planning team’s attention toward opportunities and threats outside of their current industry. Like threats from substitute products and services, or threats from new competitive entrants. As you know, threats from new competitors are especially dangerous. It is those new competitive entrants who, so often, can (and do) “change the rules of the game. Example: Dell Computer entered the industry with a brand new business model - a web-based custom ordering system - and thus redefined how computers would be sold profitably. This to the dismay of all of the “traditional” industry-insider competitors.

Yes, it is possible to overcome this deficiency in the traditional strategic planning process. But doing so requires not just a sharp mind for business, but also expertise in planning plus very strong process facilitation skills. Unfortunately, very few planning teams possess this combination of expertise.

And so, we need a new process, one which lends itself to the issues of the “new economic reality.” The realities of information technology, of the learning organization, knowledge workers, empowered employees, and networked organizations. Ideally, this new process would be strongly suggestive of content. That is, the very titles of the process steps should direct the planning team toward the strategic issues they need discuss - toward the strategic issues of the 21st Century.

And so, I propose a change. A reinvention of the strategic planning process. To a new form of planning appropriate to the strategic issues of the 21st Century. I propose a process which we call “Strategy 21™.” (Please see figure 2)

The strategic planning team, generally the organization’s senior managers, holds a series of strategy discussions… as follows…

• Examination of the current business model from suppliers through customers.
• Examination of the competitive environment.
• Trends (both positive and negative) among markets, suppliers, competitors and regulators).
• What core competencies have led to the company's success to date? How do these competencies translate to value for customers? Are these competencies truly of competitive advantage? Are they impossible - or at least extremely difficult - for competitors to emulate? And why?
• What are the “natural” constraints to growth? What’s holding the company back? What’s the weakest link in the business model?

• Potential new competitors.
• Substitute products and services.
• Substitute modes of marketing and selling (e.g. the Internet).
• Substitute modes of distribution.

• Choice #1:  Continue with the current business model only - Doing business “the same old way” (How can we strengthen the company's business model?)
• Choice #2:  Change to a new business model (What is that new model? What challenges do we face in managing the transition from the current to the new business model?)
• Choice #3:  Diversify to manage multiple business models (What are those multiple business models? What are the specific challenges to managing those multiple business models?)

• Develop a compelling vision of the future - one which employees will enthusiastic embrace - because it is worthy, and because it challenges them to grow.
• Communicate that vision.
• Nurture that vision.
• Empower employees to fulfill that vision (building trust, building relationships).

Once having decided on the Grand Strategy, and developed a compelling vision for that grand strategy, the planning team will need to satisfy itself that they have, or can obtain, all of the resources necessary to enable that strategy. This step - assuring necessary resources - is a great place to involve a selection of mid-level managers, both for their input and to build their commitment.

• Encouraging people to learn and grow.
• A process to capture and share collective knowledge.
• An especially tough question - Do we have “the right” people?
• If not, what changes should we make? (people, hiring and retaining processes)

• What processes are necessary to implement the chosen strategy?
• Do we have those processes in place?
• If not, how will we build those processes? When?

• Is the organizational structure correct for our chosen strategy?
• If not, what preferred structure should replace it?
• How should we transition into that preferred organizational structure? And when?

• What Technologies are necessary to enable our chosen strategy?
• Do we currently possess expertise in those chosen technologies?
• If not, how will we obtain that expertise? And when?

• What external relationships are necessary to enable our chosen strategy?
• Do we currently have those external relationships established?
• If so, what can we do to enhance them?
• If not, how can we establish them? And when?

• Do we have the funds to enable our chosen strategy?
• If not, how can we obtain those funds? And when?

Once having established answers to these questions - thus having written the company’s strategic plan - the senior managers must communicate their strategy, their vision, their plan, to key individuals throughout the organization… indeed to the entire organization.

The object is to communicate not just the essence of the strategy, but the enthusiasm and the vision as well… to build excitement, to rally the troops to action.

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For additional information, go to selection of planning team members and assuring successful strategy implementation.

Article adapted from Bill Birnbaum's new book, Strategic Thinking: A Four Piece Puzzle