Thursday, September 25, 2014

Does your strategic plan survive when it first contacts reality?

ASQ CEO Bill Troy’s September 2014 post on strategy 101 was his take on what is being taught in both the military and in most MBA programs regarding strategy.  I did not do a literature search but there are probably a number of Harvard Business Review articles that echo Mr. Troy’s thoughts.  
Helmuth Karl Bernhard Graf von Moltke is often considered to be one of the world’s finest military strategists.  Paraphrasing Wikipedia, “…Moltke regarded strategy as a practical art of adapting means to ends…”  Von Moltke is attributed to the following: “No operation extends with any certainty beyond the first encounter with the main body of the enemy.” What organizations and people find is that the best laid plans often fail at the first contact with reality. 
Which drives my thought of, if your strategic plan is going to diverge once it is exercised, what is the value in expending energy in its development?  Which of Mr. Troy’s five elements are the ones we need to concentrate our efforts?
So why plan?  I have two reasons.  The first comes from a popular quote of Dr. George Box attributed to statistical models:  “All models are wrong, but some are useful.”  You may never have perfect knowledge of the future but 80% accuracy is better than 50% accuracy (fair coin flip).  When those times require prognostication of the future, definitely develop a plan.  There are situations where developing a plan may not be the best use of time, for example, personal development.  Please consider the following question:   Twenty years ago, did you predict that you would be in your current career position? Question is a little tongue in cheek, but it goes to timing.  What is the proper time horizon for the future that you are trying to plan for?
My second reason for developing strategy is focus and clarity.  Plans often involve more than one person and for its efficient execution there needs to be a plan to communicate the strategy.  If the strategic plan is the script what are the required communication channels?  At the senior leader level there is a lot of energy expended on strategic plan development; the communication strategy is often assumed.  Communication drives clarity and plan refinement.   Strategy often fails because of poor communication planning.
Which leads to the second question I proposed--which five of Mr. Troy’s elements should we concentrate on?   The first two points (key facts & assumptions, and theory of victory) are crucial because it states the map, the route, the start and the finish point of your journey.  It also describes necessary resources and time frames.   Without these details, your plan does not offer the necessary flexibility of surviving reality.  Von Moltke stressed flexibility and adaptability and without a firm understanding of where you are starting, where you want to finish up, and what you have on hand to accomplish it, your chance of success is diminished.  
Communication drives Troy’s elements 3 and 4.  Senior leaders do not have perfect knowledge and they need lower level input to develop alternatives and test them against the current reality.  The best people to do that are those closest to the front lines. Successful military planning often involve small unit leadership in sandbox sessions to understand nuances and the commander’s intent.  Along with reconnaissance, these elements form the basis for element 3.  The sandbox sessions will also talk to capabilities which drive to element 4 and determine if the units have what is needed to execute plan.
Businesses consider element 5 a luxury but the military have integrated this concept as part of their training strategy.  In the 1980’s, the Army realized element 5 was crucial for success so they created a realistic training environment that tests strategy with the reopening of the Fort Irwin training center.   The Army improved leaps and bounds, which led to other training centers being built in Fort Polk and Fort Carson. Technology can drive increased use of element 5 for business. With the latest concentration on “big data,” sophisticated models that better reflect reality can be developed.  Again, it all circle’s back to Dr. Box.  Don’t rely on these models as the absolute truth. 
So how do we improve our chances that strategic planning can survive first contact with reality?  Expend most of your efforts on the basics (Troy’s elements 1 & 2) and COMMUNICATE, communicate, communicate the plan.  The more that people understand the intent and their own capabilities at execution time, it will increase their ability to be able to respond to contact (reality) and execute the tactics necessary to drive towards success.