Seven Rules of Strategic Guessing

A few years ago I stood facing a group of well-heeled executives and CEOs at a conference to deliver a talk on strategic planning.

“Which of your companies plan on an annual basis?” I asked.

Only a quarter of my audience raised their hands. I opened my eyes in shock.  

“To those of you who don’t plan on an annual basis, why not?” I pressed.

In one way or another, they answered that they were too busy fighting fires to have time for that. This same group of executives then complained about low growth and no profits. They blamed the economy for their problems. With that, I suddenly understood: clearly, they were nincompoops. These CEOs did not make the connection that planning helps you deal with the economy and the issues that challenge your business.

Before we go further, let’s define what we mean by strategic guessing/planning. Rework, a book written by successful software entrepreneurs Jason Fried and David Heinemeier Hansson, declares that planning has been replaced by guessing. There is something to this. The past two years have presented a very uncertain climate for most businesses. If guessing has become “as good as it gets”, then you absolutely need a process by which to look at the future and make educated and measured calculations about creating a bright organizational future. However, while tactics are a part of this process, strategic guessing/planning focuses executives on the strategy and future moves that the company will take to achieve its health and growth.

The fact is that many small- to mid-sized companies do not have a structured process from which to conduct strategic planning. This is like many adults who do not exercise, despite knowing it’s good for them. Perfect health isn’t guaranteed by regular exercise, but the likelihood of attaining good health is dramatically increased. Strategic breakthrough business guessing/planning works for businesses in much the same way as exercise works for the individual.

Over the next few weeks I will present a streamlined list of my company’s most critical rules for strategic guessing/planning. There are only 120 of them. So, music please! What? Okay! Take it easy! (You get overwhelmed so easily.) We will go over just seven rules of planning. Is that better?

Building a G.R.E.A.T. Company

Components of a G.R.E.A.T. Company III

E: Entrepreneurial. Great companies engage in proactive and creative actions and activities. They focus on cutting costs and thinking about ways to improve efficiency. They create a culture where employees proactively make things happen rather than standing around waiting for orders. Great companies know their destiny is in the hands of their employees, and they get them actively engaged in creating a bright future.

Interested in taking control of your company's future?  Visit the CMI Website.

The fourth rule of planning

By far my favorite rule is el grandote numero quarto. Start big by creating a vision of the future of the company. Then narrow the focus as you get back to present and address what to do immediately and how to implement.

Establish where you want to be in the next five years. As the Bible says, “without vision the people perish” The Bible does not say that you have got to attain the vision. It is saying that people need one to live into. This is critical. When you have a vision you are creating a future for the company that the employees can live into and fulfill on.

It is important that the breakthrough guessing/planning process allows for dreaming, visioning and looking at what is needed for a bright future to be realized. Typically we do this by asking the group to go three to five years into the future and recording the results on a flip chart.

The following questions need to be asked to arrive at a future vision. If you were already standing in 2016, what would the world look like? What are the important trends affecting your industry? What is your industry dealing with and what does it look like? Once a futuristic scenario has been developed, the group then looks at what they would like the organization’s image to be.

The planning team then asks what customers are saying about the organization. Why are customers loyal in 2016? What goods, services and new products have you brought forth? The team speculates on how big the organization is and how many employees are there.

This part of planning can be used to run growth scenarios. Have at least one for aggressive, medium, sluggish and no growth. Play with the numbers and have some fun with what could be. The planning team should get familiar with the possible territories and futures.

For more information about CMI's planning process visit our website: www.cmiteamwork.com