Strategic planning: 4 myths unraveled

Strategic planning: 4 myths unraveled

The strategic planning of a company starts by deciding which opportunities are worth investing time, people and money and which ones should be abandoned. However, how do you know which are the best and the worst opportunities? According to Michael Porter, writer and professor at Harvard Business School, “the essence of strategy is choosing what not to do.” In the day to day, it’s all about leaving some initiatives background in order to focus resources in a key area. The problem is that some misconceptions can hinder your understanding of what’s really strategic for your company:

Myth 1: Productivity is the goal

Productivity means doing as much as possible in the shortest possible time, while a strategic productivity is about doing well only the right things – and let others to do. The point is that you have to sacrifice the sense of confidence after reaching a goal, when you leave projects incomplete. You will have fight against your risk aversion and say goodbye to a project that has already taken much time and money. You may have to go through the pain to tell your team or someone you really care about that their great idea or a whole area have been cut off in favor of a more efficient idea. After all, without strategy, being productive doesn’t make sense. It’s like Peter Drucker says: “There is nothing so useless as doing efficiently that which should not be done at all.” So, your next challenge is to figure out which are the right things.

Myth 2: The leader’s job is to identify what’s important

A quick exercise for you: List all the projects and tasks that your team is now working on. If you do it by hand, it may be long, and that’s why we recommend Runrun.it, a task management software. Then, scratch all the tasks that you don’t consider important. And don’t be surprised if you can scratch none. That’s because all projects your team is working on are important to someone, somehow. They all seem to add value – even vaguely – to the company. So, your mission is to decide where to focus. Most teams work bewildered, accumulate overtime to complete a project after another, productive and strategic teams decide which projects most contribute to meet the company’s strategic planning. The others, although also important, will wait.

Myth 3: Being more efficient is a strategy

According to the professor Michael Porter, learning the latest thoughts and adopting the most modern technology is very important but it’s only the beginning. “If there is a machine or system that can change our work, we should buy it. If there are new ways of organizing our sales force, we should also adopt it. We have to learn, bring it to our company and deploy it. This is operational efficiency and, fortunately, the whole market can reach it – including your competitors. Therefore, to be successful, a company have to go further and understand who it is and why it’s different from the others”, he concludes.

Myth 4: There’s only one way to compete

Many companies try to figure out the perfect way to compete: the best product/service, marketing, customer interaction, supply chain etc. However, that winning formula doesn’t exist and, worse, thinking that way feeds a destructive competition, in which no one can win. “It’s a zero-sum competition: you and your competitor are offering the same. Consumers don’t care about that, they want to make a choice. If you don’t offer something different, he chooses on the basis of price and it essentially reduces the profitability of a business”, he says. Porter advises creating a positive-sum competition: “You offer something, your competitor another thing and both can win. Your success doesn’t depend on another’s failure”. Then, the whole market grows because different needs are efficiently met.

As you just saw, creating a strategic plan requires choices. Do you have time to make your decisions safely? Try Runrun.it to manage your customers, projects and tasks and save time with automated reports of activities and costs. Also increase your productivity the equivalent to take a vacation three months before. Try it for free: http://runrun.it

Leave a comment

Your email address will not be published. Required fields are marked with *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>