Strategic Planning: Sitting in the Left Hand Lane
As a consultant, I spend a considerable amount of time on the road and in New York State – that means driving the Thruway. I often wonder why, when there are no other vehicles nearby, some people will just drive in that left hand lane, whether faster or even slower than the rest of the traffic. While not bothering anyone at that moment, if another car or truck comes up behind them, it means that either the slower vehicle needs to shift over or the faster car needs to move right in order to overtake the slower vehicle.
Even the NYS DMV has signs along the highway that say “Slower Traffic Keep Right” yet these signs are often ignored. So what is the big deal about happily hugging the left side of the road? Most people are unaware that the number one reason to get back into the right lane is to reduce traffic congestion. While this process may only speed up your drive time by milliseconds, those milliseconds can add up over time. Check out this website to see for yourself: http://www.slowertraffickeepright.com/
While in most cases I view these drivers as mostly an annoyance, I have my theories why people like to be in that left lane: (1) they are uninformed of the rules of the road, (2) they aren’t paying attention and like where they are at that moment, (3) they are too lazy to move over, (4) they don’t care about other drivers, (5) they feel safer away from the busier lane, (6) or they are preparing for “eventually catching up to the slower cars”.
For companies who don’t focus on Strategic Planning, their businesses can be very much like sitting in the left hand lane. Large and small companies alike often have good intentions but fall short of recognizing the benefits of spending the time and effort of creating a thorough, documented roadmap for their future. Intellectually, people know that planning is extremely important in almost every facet of their lives, by determining where they are and where they want to go. But for many it is hard work and “best laid plans” can go astray.
Strategic planning is an organization’s process of defining its direction and making conscious decisions on allocating its resources to pursue this idea. This may involve various individuals, research sources and analysis in order to set goals, define the means and activities to obtain specific results, and implementing the steps in order to achieve the expected outcomes.
There have been hundreds of books written on this topic along with numerous videos and a host of consultants whose sole practice is to help companies identify and implement strategic plans. But what are the reasons many organizations don’t begin this vital process?
1. For many organizations, especially family owned or start-up businesses, owners aren’t informed of what produces a successful business. They may not recognize the significance of strategic planning and perhaps deem raising capital, obtaining customers and analyzing a one year budget comparison is adequate. According to the U.S. Bureau of Labor Statistics, “approximately 50% of small businesses will fail within the first 5 years” with one of the top reasons for this failure being an inadequately developed business strategy with proven long-term revenue streams.
2. Similar to being in the left lane, owners and managers of organizations, especially in the US, are focused on today and feel comfortable with what they know. Venturing into an area that is far into the future, it is difficult to comprehend the value of committing precious time and resources. Management would much prefer to concentrate on raising profits instead of attending meetings and writing strategic planning documents. According to Bill George, a professor of management practices at Harvard Business School, “To prevent future crises, we need a new generation of leaders that recognizes the pitfalls inherent to practicing short-termism.” If your eye on the prize is for your company to make money, then isn’t it worthwhile to pay attention to the successful companies around you, get out of your comfort zone, and learn from others’ mistakes?
3. Management may view strategic planning as a slow and laborious process. Documenting your company’s strengths and weaknesses, determining what is of value to your customers, obtaining industry opportunities and threats, and setting long term expectations does not sound glamorous. Generally, financial planning is a sexier approach to business success since it can be measured and more easily explained. Even once an organization documents and develops the strategic structure, implementing the changes may seem sluggish and mundane.
4. Some business owners or managers solely focus on personal profits or only on shareholder value. Golden parachutes can protect senior executives from a catastrophic business failure without a thought to the company’s dedicated personnel, who may lose their jobs due to managements’ inability to successfully plan for the future. In an article written by McKinsey & Co, a global management consulting firm, “We believe that companies dedicated to value creation are healthier and more robust—and that investing for sustainable growth also builds stronger economies, higher living standards, and more opportunities for individuals.”
5. There are so many business risks to owners and managers on any given day. Competitive threats, retaining qualified employees, regulatory and environmental constraints, debt and financing struggles, as well as cash flow and profitability pressures can all take their toll and require attention. Risk vs. return tradeoffs are always a concern for business owners. Keeping a focus on the company’s long term goals as well as the short term hurdles will help achieve higher rewards.
6. For those vehicle drivers who find it acceptable to be in the left lane with the “I’ll pass someone eventually” mindset, they can become content in nature and be unconcerned with their surroundings. According to Forbes magazine, “Leadership is in danger; complacency is becoming the new normal.” Owners and managers may fear the unknown or of making wrong decisions, they may lose attention to the details of the business and prefer playing golf or taking extended vacations, or there may be tension among the top executives. Executives may also prolong decisions until a situation becomes out of hand or they lose respect from others within the organization due to inadequate leadership. Recognizing complacency within your business is the first step towards overcoming it.
Keeping your eyes on the future with strategic planning is one tool to assess and measure your successes and downfalls. Acknowledge that your business is in it for the long haul “road trip” by being in the right hand lane, yet prepared to pass in the left lane when required. Set long term goals of where you want to be as an organization, determine the time you and others need to devote to your future, dedicate the resources whether financially or in personnel. It may be difficult to see the forest through the trees and to maintain momentum in your strategic planning. But if the outcome is the reason you are in business to begin with, doesn’t it make sense to pursue a process which has brought success to many top companies? Stay on the right hand side of the road in your business but understand the appropriate time and importance of moving into the left lane of the road yet returning to the right side. Sitting in that left lane for too long may create unintended roadblocks or congestion. So be one of the 50% business success stories rather than one of the 50% failures.