A real life situation: board directors are finishing off their monthly board meeting when a number of directors begin to discuss strategy. There is never enough time, they say, to really discuss the big strategic issues facing the organisation.
So an agreement is quickly reached to spend some quality time on the future strategy of the organisation and they ask their CEO and his senior management to plan an offsite session to undertake this very important activity.
Dates are set, an agenda established, a location decided upon and expectations are high.
Unfortunately, when the Board looks back on it afterwards, there is general agreement that it had materially failed to deliver.
What went wrong and what lessons can be drawn from exercises like this, which unfortunately are only too common?
Successful strategic planning sessions inevitably have a number of critical elements in place:
1. Allocate the time
Trying to fit the future of the company into a half day is never going to work – directors and management need to be prepared to put in at least a day and a half so that all of the big issues get sufficient time and clear actions developed to address them.
A really solid first day is vital so that by the time the group convenes for dinner there is a general consensus that the key items have been nailed with the following morning left for wrapping up all the loose ends.
2. Get an external facilitator
Using the CEO or the Chairman as the facilitator rarely works; these individuals should have as much input on the critical issues facing the organisation as anybody else in the room, and it’s almost impossible to do this at the same time as facilitating the session. It is usually worth the time and the cost of obtaining a good facilitator who understands the major issues, can draw out the key actions necessary to address them, involves all participants, and keeps the entire process moving forward.
3. Involve the senior management as well as the Board
Board only and/or management only strategy sessions are usually a recipe for failure; all parties with a legitimate interest in the future of the organisation need to be present and actively involved. Apart from the obvious advantages of enhancing teamwork amongst the leadership of the company, everyone involved will have strong ownership of the outcomes of the session.
4. Put in the hard yards prior to the session
Analysis, assembling the data and facts, developing the agenda, and ensuring all participants arrive having thought about the major strategic items are all vital aspects of a successful session. Turning up with the view that the session will run itself is simply not good enough.
5. Focus on the few big items
Experience suggests that many strategy sessions end up biting off more than they can chew; there are usually no more than five or six strategic areas which will determine the success (or otherwise) of the session and more importantly, the organisation itself. Keep the agenda to this number – in this case, less is decidedly more.
6. Avoid the operational and hone in on the strategic
An issue is strategic if:
• It has a material impact on the balance sheet and/or profit and loss statement
• It has a medium to long term perspective
• It involves risk
• It provokes healthy debate.
If it doesn’t fit all of these criteria, leave it off the agenda.
7. Ensure follow through
Departing the session without an agreed set of actions, with specific accountabilities and timing, is leaving the job half done. It is critical that all participants have a clear understanding of what’s required of them – both individually and collectively – before the session wraps up.
8. Monitor performance
Having developed the strategy and the actions that will deliver it, directors should ensure that management reports back on a regular basis on performance. This should be an essential element of the normal Board meeting process.
9. Keep it simple
The compelling vision that comes out of a successful strategy session should be capable of being articulated in twenty words or less to somebody who wasn’t at the session – staff, members, regulators, and suppliers will all have an interest in the strategy of the organisation and unless it can be described in simple to understand terms, they won’t sign up for it.
There’s no particular magic in the points raised in this article; as with a lot of things in business, it comes down to adhering to a disciplined process in a logical and consistent manner. As Woody Allen once commented – 90 per cent of success in life is turning up!
Paul Lahiff is a company director and consultant to the financial services sector; he has served as Managing Director of Mortgage Choice, Permanent Trustee and Heritage Building Society.