Let’s face it, in almost all circumstances, strategic planning has proven to be a time-consuming and cumbersome burden. Even worse, it rarely yields the results that might make up for the painful process. But it doesn’t have to be that way.
By streamlining the process and flipping the typical approach on its head, you can make strategic planning a breeze and ensure it has a positive impact across the whole business.
The immediate result will be a more engaged workforce, greater alignment and a huge amount of time and money saved.
How much time and money could you save?
Let’s imagine you’re a 100 person SaaS business.
Your average CxO is likely on >$175k each, and there could easily be 8 of those for a $1.4m payroll.
You might have a further 15 leaders on >$125k each for $1.875m.
Then there’s 77 individual contributors, with maybe an average salary of $75k for $5.775m.
Knowing the salaries at some VC-backed startups, this is probably conservative!
Now let’s consider how much time an exec, leader and IC will take each year on planning.
- 2-3 day annual offsite (sometimes execs only, sometimes with leaders too)
- 1-2 day quarterly offsite/planning sessions (usually execs and leaders)
- 3-4x 2-3 hour follow-on meetings per quarterly cycle (execs and leaders)
- 2x Strategy & Planning focussed 1:1s across the whole team per quarterly cycle
- 2-3 hours of individual planning time per cycle
How does that shake out into costs?
Assuming execs are on $673 per working day
Leaders are on $480
ICs $288
- Annual offsite = $16,000 (3 days, execs only!)
- Quarterly planning sessions = $75,504 (6 days, execs & leaders)
- Follow-on sessions = $24,184 (8 hours per cycle, execs & leaders)
- 1:1s = $29,376 (leaders & ICs totaling 1 day per year)
- Individual planning = $52,140 (everyone, totalling 1.5 days per year)
- Total = $173,020
This is very likely CONSERVATIVE and nor does it account for the OPPORTUNITY cost of lost productivity and time spent away from their day job.
If you’re a 300 person business, you probably need to more than 3x those costs as even more complexity and multi-layer management calibration will kick in, whilst senior salaries will likely be materially higher too.
You could easily be looking at $750k+ per year.
And even worse, for that time, money and effort…how many strategic plans actually get implemented, stuck to, tracked and delivered?
So, how do you streamline this and save your business over $150k a year (whilst increasing the chances of it sticking and being delivered)?
Before we can prescribe a solution, we need to look at the issues…
1. Too many competing priorities
The number one issue that plagues most businesses is too many competing priorities, and they’re rarely force-ranked so folks can understand which one takes precedence over the others.
As Jim Collins, author of the excellent business classic “Good to Great” wrote: “If you have more than three priorities, you don’t have any.”
This leads to immense complexity, horse-trading and misplaced ambition during the strategic planning process, where subtraction almost never happens…but ambitious execs and leaders will be more than happy to put forward new priorities.
Then when it comes to making them work in practice, they’re doomed from the start thanks to a phenomenon called Gall’s Law, which states:
“A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over with a working simple system”
One of the main reasons for this in a scaling organisation is a lack of focus and clarity, meaning the team simply won’t know what’s actually important, which may well change depending on which exec they’re speaking to or which way the wind is blowing that day.
2. Cascading comms lead to Chinese Whispers
Most strategic planning ultimately aims to cascade down to the ranks of those who actually need to execute the work.
Those individual contributors can’t start to plan until pre-approved strategy reaches their direct line manager, who then relays it to them…only for their on-the-ground context to potentially contradict the ‘ivory tower’ plans that have been constructed, because they’re unworkable or unrealistic.
And so a tug-o-war begins between those on the front-lines of execution and those leading a more academic exercise from spreadsheets and business books. (No prizes if you guess who wins that debate…or what happens when the battle plan makes contact with the enemy, which is reality.)
But it’s hard for it to work the other way around, because how do staff make reasonable suggestions and input on strategy, without having context or a strategic framework on which to base their planning? Hence the chicken-egg problem.
Another related issue with the casting waterfall approach is that a natural Chinese-whisper effect kicks in, where each layer of the org gets a marginally different interpretation of the original priorities filtered through the prism of the leaders above. So by degrees, what individual contributors are asked to base their plans on is slightly, but meaningfully, different to the top-level strategy.
3. Language ambiguity
A seemingly small, yet often impactful issue with strategic planning is reaching an agreement on the semantics of what different terms mean.
If you’re using EOS or Scaling Up, then how do you define a Quarterly Rock? Should it be SMART or not? If it it’s smart, how is it different to a SMART Goal?
If you’re using OKRs, there’s often a disagreement over what should constitute an Objective or a Key Result.
In 4DX, I’ve seen debates around where something is really a lead or lag measure, or if it shouldn’t be considered ‘part of the whirlwind’.
The upshot is that a lot of time gets wasted as smart people try to pin down definitions, instead of their cognitive energy going into thinking about the more substantive issues of strategy and planning.
Or, where the points aren’t debated, there’s arguably an even worse outcome – everyone leaves thinking they’re aligned – only to find out they were thinking about very different types of outcomes because those terms were open to interpretation.
4. Data paralysis
This is huge. I see so many organisations that spend days of back-and-forth trying to get the perfect data on which to make sound decisions.
Of course, where there is good data to be had, it makes absolute sense to use that, look for patterns and insights, then use those to extrapolate towards a future goal.
For example, let’s say you can see overall revenue is growing 100%, but as you dig into the data you notice a declining win rate for your SMB segment, which coincides with a new competitor entering the market targeting that size of business. Assuming they’re still a focus of your business, you may set goals around defending this segment.
However in many cases, data is a mess. Different data sets conflict. Or they’re incomplete. But instead of accepting this and using some hard-won experience and logic to set a best-guess goal, days and even weeks are lost as they scramble to try and pull the right data out of a hat like a magic trick where the rabbit doesn’t exist.
5. Fixed v Growth Mindset
This final point is related to the one above. There’s a great irony that in most startups, curiosity and the concept of a growth mindset is frequently sought after in interviews and cultural values.
Yet when setting priorities and goals, they tend to look to the past for answers, as though their universe is fixed and they can control the outcomes based on a small number of knowable variables.
The reality is far from this. Any number of variables crop up, or in the infamous words of Rumsfeld “there are also unknown unknowns. There are things we don’t know we don’t know.”
My guess is that most business leaders prefer to sweep these under the carpet – because who wants to say they haven’t a clue what’s around the corner? But just because you close your eyes and hope they don’t exist, doesn’t mean they don’t.
And this is why despite weeks of meticulous planning, it usually goes up in smoke a few days into the next execution cycle, but because the leadership’s mindset is fixed, both challenges and opportunities aren’t properly addressed.
As Tyson noted, “Everyone has a plan until they get punched in the face.”
The solution…
These are some meaty challenges, I’m sure ones you’ve seen in most organisations you’ve worked in. So is there a solution? I believe there is, and it involves radical simplicity (remember that ‘simple’ is very different to ‘simplistic’).
1. Focus on the Big 3
Let’s start with a question.
If you could end every year – and every quarter – with more revenue, higher profit and a greater strategic advantage in your market…would that be a huge win?
Of course it would, that was rhetorical!
So stop fucking around with a load of other priorities, and focus on the Big 3:
- Revenue growth
- Operational efficiency
- Strategic differentiation
Even better, every single one of your teams and every individual in them can impact those priorities. They can help to generate more sales, operate more efficiently or with greater impact, or help the company create space between you and the competition.
In fact if they’re not working on one of those 3 things most of the time, you might wonder if they’re focussed on the right things.
Broadly speaking, you can see how the major functions of most business align to one of these priorities:
Revenue growth: Sales, Marketing, Account Management
Operational efficiency: Finance, People & Talent, Ops & Delivery
Strategic differentiation: Product, Engineering & Design
Of course, these are all ultimately cross-functional priority areas that require collaboration…and that’s a good thing as it helps to drive alignment.
If you’re happy with throwing the full weight of your organisation against these three priorities, now you just need to agree on the measures of success you want to strive for in each of them.
This creates a far narrowing focus for your planning sessions, and one that you know can be embraced by everyone in your organisation.
2. Verify contextual understanding, then go bottoms-up
Once you’ve set your top level Big 3 Priorities, it’s super important to get the whole business up to speed on what they are, why they’re important…AND check they understand your broader strategy too, which sets the guardrails and context as to how they should go about hitting your B3P.
That ‘AND’ is super important and so frequently missed. This is often the root cause of many points of friction and misalignment. Because everyone starts to chase the number, but not everyone is on the same pages as to how to get there.
You need to be confident that everyone – from product and engineering to sales and marketing to people and finance – are reading from the same hymn sheet when it comes to things like who your ICP and buyer personas are; what pain you’re solving; the commercial model etc.
This doesn’t mean you present it once in an all-hands and assume everyone’s internalised your every word (spoiler alert: they haven’t!). It means you need to certify their knowledge and understanding of your strategy, priorities and the why behind them. It’s simply too important not to. It would be like handing the keys of an Airbus to a pilot without a formal exam.
Unfortunately, in the vast majority of businesses it’s 100% routine.
Now for the second part of this step: go bottoms up.
This means actually trusting your employees – having verified they have the context for what, how and why you want to achieve your particular set of priorities – that they’re competent enough to align their own goals to the interests of the organisation.
Rather than spending weeks of painful ‘cascading’ down the ladder, get everyone to set their own SMART goals, share them with their manager, and have them flow up the chain.
There are 4 major benefits to this way of working:
- Those executing your strategy will feel far closer and more connected to it, with a lot more ownership
- There’s much less chance it can be even subtly miscommunicated
- The leadership team will have a far, far better understanding of the businesses overall capabilities and where the collective consciousness is
- You’ll save days of time
3. KISS the language
The less words and phrases that need to be defined in a system, the better.
Keep It Simple, Stoopid.
My suggestion for achieving that? Ditch the ‘systems’ that just so happen to sell very expensive ongoing consultancy services alongside them; don’t reinvent the wheel…stick to a classic, like ‘SMART’ goals.
Almost everyone is familiar with them, and if they’re not, they take about 10 minutes to convey and are very easy to grasp.
Of course, it’s still possible to go wrong – user error is every present – although if you use a dedicated tool (*cough* like GTM works) then you can also avoid that issue too.
4. Track qualitative feedback & inputs
How do you overcome the issue of wonky, incomplete or incoherent data? Stop looking at the rearview mirror and create a process for tracking the right data going forward.
There are two things to consider here.
The first is that almost every business has become obsessed with data that tells them what has happened…very few ever focus on consistently capturing feedback and insights that allow them to understand how and why certain actions have had a particular effect on the business.
You should really start to systematically gather this richer data set alongside your existing quant data.
The second is that because every tool out there likes to sell the range of metrics and analytics it can provide, most teams are awash with data, to the extent that they can’t see the wood for the trees. They’re data rich, insight poor.
An antidote to this is to not rely on every vendor telling you want to track, but instead asking your capable team to input the most important things they’re working on each week, how well they’re getting through these activities, and if they’re having the expected impact on their goals.
Not only does this help create focus, momentum and accountability…a wonderful offshoot is that you’ll have a ton of data on which inputs move the needle for the organisation (and which don’t).
5. Select the right goal types
When it comes to setting SMART goals, most people assume there is just one variety, when in fact there are 3 types, and each requires a different way of thinking about reporting progress.
Type 1: Absolute goals
These are the most common goal types, and require you to set an absolute target for you to hit e.g. 100% increase in conversion rates or £10m in ARR.
Progress is recorded in a linear way, where you can see what % of the way to target you are each way.
Sales quotas or lead targets are often good candidates for absolute goals.
Type 2: Relative goals
Far less common, these types of targets are all about incremental improvements where divining the right absolute goal may take more time than it’s worth.
These may be to improve customer satisfaction scores as far as possible or arrest the rate of churn in your product.
The power of these goals is that:
- a) they’re simple to set and help to create absolute focus on what actions can be taken to move the needle in the right direction;
- b) they set no limits on the impact those working on them should strive for; and
- c) they help to build early momentum, where linear progress to an absolute target can initially be demotivating (especially if they’ve been set incorrectly)
Type 3: Binary goals
Generally unfavoured by leadership, these targets are simply a ‘done/not done’ scenario.
For example ‘launch x product on y date’ or ‘create a podcast’.
Now I have a lot of sympathy for why most executives don’t like these goal types – there’s seemingly no substantive measure of success. You could launch the product or create a podcast…and they both stink, costing the business money without any upside from users.
This is why most prefer to turn them into absolute goals e.g. launch x product on y date which z # of active users within the first 30 days’ or ‘create a podcast with x followers in the first 90 days’.
The challenge with this approach is that in most cases, there’s a baton handed over across teams, between the binary goal and the absolute one kicking in. And this starts to complicate and obfuscate where responsibilities lie.
Take the product launch for example…if it’s shipped late, the GTM team now has to scramble to still hit the active user number. Maybe they do or don’t, but let’s say they’re successful, should the team who shipped it late be equally celebrated, given it’s a shared goal?
Or flip it – perhaps the product is shipped flawlessly and bang on time, but the users don’t materialise…whose responsibility is that? Perhaps the product doesn’t work as well as anticipated, or maybe the messaging and channel approach was weak?
By breaking down the binary side of the goal, then setting up a separate absolute goal once it’s been achieved, you can more easily isolate where issues and responsibilities sit.
Implementing your strategic planning
Now we’ve explored the major challenges to strategic planning, and the solutions you can take to significantly simplify and speed it up…you can’t forget this CRITICAL next step…to operationalise and monitor your plan!
All too frequently, the days and weeks of strategic planning a business invests, are simply an academic exercise. It’s the equivalent to torching $150k in cash.
The challenge is that engaging people in the week-to-week process of aligning their actions to the plan is tough, as is tracking progress to it.
This is partly due to the challenges highlighted above, such as the wrong goals being set, ambiguity in language or a simple lack of focus where ‘everything is a priority’ and so nobody knows how to make good choices on where to spend their time.
But it’s also down to tooling and motivation.
Let’s consider tooling.
Can all the above be done on spreadsheets?
Yes of course it can. Just like you can technically walk from London to Istanbul. But most folks would elect to fly.
Similarly, you can wrangle an excel spreadsheet to do almost anything, but it’s unlikely to be the most effective way you can achieve the outcomes you’re looking for.
Instead, you should opt for specialist software that’s been developed from the ground up to get you from A-B, in this case from your initial strategic planning to achieving your company goals.
Motivation
When it comes to motivation, everyone responds differently. But it’s generally accepted that the lower the friction and higher the rewards, the more likely you are to motivate someone to take an action.
In the case of executing against a strategic plan, some of this is around how it’s set in the first place. The more employees feel like they’ve set their own objectives, and therefore have ownership over them, the better.
But they also don’t want to feel like they’re being micromanaged with daily check-ins or having to take unnecessary time out of their day.
The optimal approach is to lower the friction, requiring just 15-30 minutes per week to check in and document progress.
And then you need to ensure there’s a payoff to this input. This can come in many forms, from coaching moments (offering consistent feedback and development), a little friendly competition (through leaderboards and gamification), or public acknowledgement that their inputs are helping inform the strategy.
All of these provide near immediate feedback and rewards, whilst also building up to longer-term achievements and career enhancing positive reinforcement loops.
By setting up a low friction, high reward system, good habits start to form and the whole organisation begins to move towards a culture of high performance and execution, that’s entirely aligned with your business priorities.
Next steps
Imagine a world where you can do less, save money and achieve more…why not make it happen?!
If any of the above resonates with you, whether you’re a senior executive or an individual contributor…let’s set up a time to talk, and explore how GTM Works can support your future success.