Muhammad Ali had the capacity to land a telling blow.
None more so than when he said:
“The best-laid plan is forgotten the moment the first punch hits.”
In business, many strategic plans are soon forgotten, filed or sidelined when competition intensifies, cash-flows dry up, client and consumer confidence contracts and banking credit policies are tightened.
Long-term visions shorten to myopic perspectives. Expansive scopes narrow, and positive responses turn quickly to knee-jerk reactions.
Alligators, elbows, draining and swamps readily come to mind.
IT’S NOT ALL RISK MANAGEMENT
The current and recent business landscapes are littered with morsels and entrails of liquidations, failures, foreclosures, forced acquisitions and collapses.
It is an unseemly and ongoing calamity.
Retailers, fashion distributors, car dealerships, new-home builders, property developers, contract and digital/on-line service providers are well represented in the unenviable lists. Few sectors, professions and disciplines are precluded. What are the dominant common factors?
Among the public listed entities, it is apparent that the striking commonalities are in the composition of Boards of Directors. Lawyers, accountants, bankers, merchant bankers and fund equity managers are well represented, often being an overwhelming collective majority.
Understandably, the skill-sets that are foremost at those boardroom tables and in deliberations are financial prudence and risk management. Mitigation strategies can, and do save money. Sadly, they do not address the need to make money.
Rapid change, innovation, creativity, disruption, technology and encroaching artificial intelligence are unrelenting. The impacts are fast, widespread and accumulating. Customer-facing managers and service providers experience are sensitive to those dynamics. But sadly, are seldom or poorly represented on many Boards of Directors. Redundancy and obsolescence seem inevitable consequences.
Business is an art-form. Its language is heavily nuanced. That should be reflected in the wording and nature of documented strategic plans.
Sales margins, profits and market share can be very short-term.
“Good”, appropriate plans are a balance between financial prudence, risk management and strategic direction. The latter attribute and feature typically comes from the input of experienced, qualified practitioners who have specific industry/sector/profession skills. It is “They” who are so often unrepresented.
DON’T GET LEFT BEHIND
The broader retail sector represents a telling case study. Among the trail of high-profile, established public-listed retailing operations which have been subjected to liquidation in recent times are Maggie T, Roger David, Pay-Less Shoes, Toys R Us and Ed Harry.
In most instances, there was a noticeable lack of industry “street-smarts” among the board members. “Capital” ideas are not limited to funds and funding.
Fashion retailers around the world have been found to be floundering in the presence of fast-fashion operators, like Zara, H & O and Uniqlo. Productivity, velocity and volume among the latter-set have dynamic and appealing business models. Business operators and consumers win.
Laggards soon lose touch with the marketplace, and with previously loyal customers. Market leadership in past years and decades counts for little.
Those factors, more so than the intrusion of on-line sales and the distribution of digital marketing and AI (Artificial Intelligence), expose long-established businesses to the very real prospects of decline, failure and liquidation.
Conversely, many highly prospective start-up entities fail because of the time taken to formulate, document and implement an appropriate business model.
Inputs from accountants, patent lawyers, funds managers and passive seed-capitalists typically don’t address the very real need to plan for success, and are huge drains on scant resources.
BUSINESS, ACTION, TACTICAL OR STRATEGIC PLAN
Over four decades it has been apparent to us that many plans labelled “strategic”, fall well short of that benchmark.
A recent review of a local government strategic plan showed that, at best, it was an action plan. The emphasis seemed to be on “doing things” rather than addressing needs, fulfilling expectations and achieving desirable outcomes.
The response from the local government executive was direct, striking and disturbing. That plan complied with the accepted template, which determined structure, topics and essential focus.
Compliance was essential, to secure state government funding for the documentation of the plan.
So, from the outset and before any scripting, the plan was destined for failure, under-performance or non-performance. Some reassurance appears to be gleaned from the fact that all, or most, peer local government strategic plans would be identical, or similar.
Therefore, among many, not all, local government municipalities and involving multiple interest groups and people, expect a lot of activity. “Doing things” is the forte of the plans. Achieving outcomes seems to be outside the scope and the planning template.
PLAN TO PLAN
Planning is an imperative. Reducing visions, intent, opportunities and priorities to writing tend to contribute to the realisation of favoured outcomes – if formulated astutely.
Within the military context, an overwhelming majority of strategic plans (not battle plans, which are essentially tactical) are not about winning wars. Rather, most seek to avoid conflict and casualties.
When conflict is inevitable, casualties are minimised. The first Iraq War, during the 1990s, resulted in success for the allied forces and loss and destruction for the Saddam Hussein-led Iraqi forces.
Indeed, General Colin Powell and his field commander, General ‘Stormin’ Norman Schwarzkopf, caused fewer than 250 deaths, some 70 of which were “misadventure” from “friendly fire”.
AND THE POINT IS …
When the marketplace and economy at large turns tough, there is an understandable need to sustain income, competitiveness and strike a measure of stability.
That does not diminish the need for effective, genuine strategic planning.
Ready. Fire. Aim.
This is a dangerous, high-risk philosophy, which typically bears a high cost of casualties and failures.
Those with experience on the battlefields and shop floors have much to contribute. Analysing spreadsheets, with an emphasis on the bottom right-hand corner entry of “internal rate of return” are deficient.
Sting like a bee. Float like a butterfly. Don’t retreat to your corner, and throw in the towel. Above all, remember, not everything goes to plan.
Facilitator – Strategic Planning
M: 041 983 5555