How to Get Started on Strategic Planning

Is it time to initiate a strategic planning exercise for your organization? If so, you might be looking for a source of inspiration or momentum. But what is the genesis of strategy? How do you get going from a standing start? Is there only one way to come at strategic planning? No, definitely not!

Over morning tea, Craig and I reflected on how each of our current consulting clients has a different starting point for their strategic planning. It might be helpful to outline the various scenarios in case one suits your organization and helps you come to strategic planning with more clarity.

What is at the Heart of Your Strategy?

When I say “what’s at the heart,” I mean what’s driving your strategy. What comes first?

Another way I often talk about this is: “What’s the tail, and what’s the dog?”

Strategy has a flow where you need to make the most important decisions first and then use those early decisions as the lens through which you view (and constrain) the proceeding answers. If you start with a question that doesn’t belong at the heart of your strategy, you’re letting the tail wag the dog. I don’t recommend it.

That said, there isn’t only one answer to what could or should be at the heart of your strategy. Here are some options.

Mission-driven Strategy

Our 3COze strategic planning process traditionally starts with an organization’s purpose or mission. Establishing the center is as straightforward as asking, “Why does our organization exist?” Using a mission-driven approach, your answers should focus on your organization’s value from the perspective of your beneficiaries (customers, patients, community members, etc.). In this type of strategy, the demand exists, and you’re there to meet it. Does your organization exist to protect a coastal watershed? Are you helping businesses store, protect, and use their data? Do you make vacations affordable for more families?

A mission-driven strategy means you’re compelled by something you must accomplish, and the answers to all the other strategic questions flow from that purpose. Your strategic goals are framed primarily in what you will achieve for your beneficiaries. For example, you will have protected more square kilometers of coastline, enhanced the ease of access to petabytes of stored data, or sent thousands more families on their first international vacation.

For a mission-driven strategy, ask, “Why do our beneficiaries need from our organization?”

Vision-driven Strategy

Another organization we’re working with is pushing beyond the existing industry and envisioning a future different from today. This type of process begins by asking, “What’s possible?” Then, using a vision-driven approach, your answers should focus on providing something that no one has ever asked for. In this type of strategy, you’re not responding to demand; you’re creating it. Your beneficiaries might not recognize themselves as your customers because they haven’t yet imagined your innovative service, experience, or product.

A vision-driven strategy rejects the status quo and incremental improvement in favor of radically shaking up existing models. Your strategic goals are framed primarily in what you will build and how you will start to develop a market for it. For example, you’ll have a working prototype, a group of beta testers, or early evangelists for your brand.

For a vision-driven strategy, ask, “What does the world need?”

Shareholder-driven Strategy

While mission- and vision-driven strategies can be enthralling, a slightly more pragmatic version focuses on financial stakeholders. A shareholder-driven strategy centers not on what your customers want but on what your owners need. For example, we’re working with a publicly traded company that needs to consider where the company fits in its investors’ portfolios. They are highly successful because they are a solid, reliable, low-risk investment that meets the needs of institutional investors. Assessing the attractiveness of strategic options through an investor lens can lead to different answers than considering from the customer’s point of view.

Lest you think that shareholder-driven strategy is only about capitalist stockholders, I once facilitated strategic planning for a digital animation company that artists owned. They didn’t want to capitalize on many of the avenues open to them because it would have required them to compromise their artistic integrity. As the owners, they were happy to say “no” to strategies that strayed from that core.

In a shareholder-driven strategy, your strategic goals are framed in terms of criteria aligned with the interests paramount to your stakeholders. That might be a modest rate of return with little variability, or it might be the chance to pioneer a new form of digital animation. Still, either way, the goals of a stakeholder-driven strategy start with understanding the owners’ needs and then finding the market opportunities that allow you to meet them.

For a shareholder-driven strategy, ask, “What do our owners want from us?”

Competence-driven Strategy

One other option for where to dig in with your strategic planning process is to try a competence-driven approach to strategy. In this version, you’re starting with a core competence and finding the markets, customers, and situations where this competence is of outsized value. A competence-driven strategy begins with the question, “What are we better at than anyone else?” This is a great approach when you’ve demonstrated excellence in one space, and you’re looking for new places to apply your strength.

For example, perhaps you’re a pharmaceutical company, and you’ve pioneered an mRNA vaccine platform during the Covid-19 pandemic. Now your strategy shifts to finding new diseases or even other health domains that might benefit from your technology (I just read about Moderna taking mRNA technology to non-virus-based forms of cancer.) Of course, it doesn’t have to be a technology that’s your core competency; it might be a particular demographic (your company has a strong tie to seniors, accountants, or HVAC installers), a valuable skill (better at billing, recruiting, or graphic design), or unique relationships (ties to municipal government, influencers, or corporate CIOs).

In a competence-driven strategy, your strategic goals are framed in product or market mix and your ability to transpose a skill that’s working in one market to an adjacent one. For example, you might measure the percentage of accounts or leads in your new target industry, brand awareness with a new stakeholder group, or the revenue from new products.

For a competence-driven strategy, ask, “Where else could we apply our unique competencies?”

Strategic Planning Needs Energy

A great strategic planning process needs a spark to overcome the inertia of existing strategies and tactics. One great way to light the fire is by finding the starting point that’s most compelling to your organization. Is there a problem that the world needs you to solve? Is there an opportunity no one but you has seen? Are your owners counting on you to deliver something specifically suited to them? Do you have something special that can be applied in new ways? If you can enthusiastically answer one of these questions, the rest of your strategy will follow. You can even start with one of these four approaches and then use another as the second filter for your opportunities and threats.

What’s at the heart of your organization’s strategy?