Strategic planning can be a valuable tool for organizations of all sizes. Done properly, a strategic plan provides a solid roadmap for the organization, outlining the vision and detailing the key objectives to be accomplished within a given timeframe that should enable progress toward the vision. A strategic plan also provides clarity and alignment for the stakeholders, ensuring that everyone is headed in the same direction.
Strategic planning takes different forms in different-sized companies. Strategic planning in large, complex organizations might take months and involve some combination of top-down and bottom-up efforts. Typically, a high-level strategic vision is shared from the C-suite and the various functions within the organization develop a localized plan to realize the vision in addition to achieving current period operational objectives. The degree of top-down and bottom-up contributions differ across organizations with alignment being an elusive but critically important outcome. Strategic planning for smaller organizations could take days to weeks, but the process of cascading the strategic plan is equally important.
Ultimately, a good strategic plan should provide a framework for decision making within the organization.
Any organization with more than one stakeholder needs to ensure there is general alignment among the stakeholders when decisions need to be made. In large corporations those making decisions at the point of impact might be as many as six to eight levels removed from the executive leadership team. While all decisions are not equal weight with regard to strategic impact, every decision should be aligned with the strategy of the company.
What is not as obvious to many is the need to avoid making strategic plans overly prescriptive as they cascade down and across larger organizations. Even in smaller organizations, one must be careful not to overly constrain the organization. Guard-rails are necessary, but one needs to be cognizant that there can be many paths to success and the best path often is not always obvious from the top or at the beginning of implementation. Good strategic plans should enable organizations to learn as they progress. With learning comes better decision making, and with that comes a higher probability of success.
The Inverse Funnel of Strategic Planning: From C-Suite to Employees
In reality, the best strategic plans are most prescriptive at the highest levels and get less so as they cascade across the organization. Every function in an organization must be aligned with the strategic vision and must understand its role in achieving the strategic plan, but the manner in which the function pursues its own objectives should be flexible enough to allow for those operating within the function to adapt to unexpected obstacles. One might view this as an inverse funnel, where the neck of the funnel represents the solution set at executive levels and the farther one gets from the C-suite the broader the solution set becomes.
For smaller organizations, the same approach applies. The only difference is there are fewer levels and therefore the solution set never gets as broad as it does in larger organizations.
The biggest mistake any organization can make is to make their strategic planning funnel too long and narrow for larger organizations or too short and wide for smaller organizations. Both approaches significantly increase the probability of failure. A long, narrow funnel might be described as “tunnel vision” where the organization fails to recognize and respond to market dynamics that impact its business model. A short, wide funnel manifests itself as chaos in a smaller organization and is typically viewed as having a “lack of strategic vision.”
In the end, the role of a good strategic plan is to enable the company to clearly articulate its longer-term vision while ensuring the near-term objectives enable progress towards realizing that vision. Ironically, a great strategic plan is rarely ever achieved—as the plan itself should be dynamic, reflecting the learnings of the organization from one period to the next. An organization that is not learning and adapting is destined for failure because no single business model survives in perpetuity.
Clarity brings confidence, which leads to commitment. A strategic plan should provide clarity throughout the organization, enabling each stakeholder to understand the vision for the organization and giving them the confidence to make decisions that are aligned with the realization of the strategy. The lack of confidence is the single biggest contributor to a misshaped funnel. When leadership doesn’t have confidence in the organization, the funnel becomes overly long and narrow. When the organization doesn’t have confidence in leadership, the funnel becomes overly short and fat. Recognizing the shape of one’s strategic planning “funnel” provides great insight into the psyche and health of any organization and should give all stakeholders insight into the probability of success of the strategic plan.
