The misnomer of strategic planning

If you want to increase your lifespan, you need to increase your flexibility.

This is true for individuals. A recent study showed that more ‘flexible’ people have a 2 to 4 times higher chance of overcoming critical illnesses.

It’s true for buildings. The top floors of the Burj Khalifa can move back and forth by as much as 2 meters.

And it’s true for companies. There are countless case studies of how business models change to adapt to an evolving environment, from Kodak to Blockbuster to Microsoft and others.

An increase in flexibility increases longevity because it creates the ability to adapt to unforeseen or rapid changes in your environment.

How do we increase organisational flexibility?  

We’ve always thought of OKRs as a strategy execution methodology. Until someone said it’s not as much a strategy execution methodology as it is a strategy effectiveness methodology.

Whilst we still believe in the “strategy execution” part of it, we can’t disagree that it creates the ability to test strategy effectiveness.

And to increase organisational flexibility, you need to be able to test the effectiveness of your strategy.

To really dig into it comes down to interrogating the difference between strategy and planning.

Strategy vs. Planning

People often talk about strategic planning. In my view, this phrase is a misnomer.

Strategy is based on a hypothesis. The exact path is unknown, but we have to make a guess. It requires faith to pursue a picture of what we believe the future might look like.

Planning is based on a defined deliverable. It requires detailed steps and thinking to ensure alignment and action.

Strategy, therefore, will look more like this:

• A defined outcome that is aspirational
• Actions within a framework (which is flexible)
• Decisions in the face of uncertainty
• An approach that is held loosely
• Curiosity to find solutions

Planning, on the other hand, looks more like this:

• A defined deliverable that is specific
• Actions within a methodology (which is more rigid)
• Decisions based on data
• An approach that is held tightly
• Discipline to keep on track

Executing a strategy and executing a plan will, therefore, look quite different.

Running experiments to test effectiveness

Executing a strategy requires experiments.

When running experiments, you allow for flexibility. You know that some will work and some won’t, which means you will have to run a range of different experiments.

If there are too many that don’t work, iterate and try again.

It also means you need to be comfortable with failure. A failed experiment isn’t failure; it’s just a learning.

“I have not failed. I’ve just found 1000 ways to not make a light bulb”. 

– Thomas Edison

From experiments to execution

Here are 5 steps we take our clients through to help them run experiments:

1. Set the strategy annually. It might not reset every year; the intention is for it to survive for 3 to 5 years. We also typically pick it up every 6 months to ensure it’s still relevant.
2. Break it down into quarterly goals. Goals need to be outcomes-based to ensure teams aren’t simply launching projects, but rather reaching outcomes (i.e. OKRs).
3. Decide on a range of experiments to run. To execute on OKRs, we need to try different things. In effect, we are running a series of short experiments and seeing what works.
4. Create a plan for those experiments. These are detailed action steps with accountable individuals and deadlines.
5. Meet weekly to check-in. Here we gauge whether the experiments are working. If it’s not working, we need to find something else to test.
6. Winning at strategy execution lies in the integration of strategy and planning. It requires a good mix of curiosity (experiments) and discipline (plans).

Many companies love strategy, and they thrive on it. There is a certain level of adventure in running experiments.

Adventures are fun. But so is winning.

Happy experimenting!