The word “strategic” is one of the most overused in business. It’s often used as a synonym for a good decision or being successful at some part of your job. Managers exhort their teams to “be more strategic,” investor reports might bemoan executives not taking a “strategic approach,” and so on.
Vague definitions are never good for business, and are especially bad for corporate strategy teams who spend a lot of their time trying to get their company’s most senior managers to make the right decisions about a future that’s more distant and uncertain than that covered by their next set of quarterly or annual targets.
Among senior execs, what constitutes strategic depends on who you ask. CFOs might well say it has something to do with reorienting budget to support long-term growth bets, whereas a head of sales will say it all starts with hiring the right people for commercial teams. And while some issues are easy to categorize as “operational” or “strategic,” there is also a considerable gray area. This ambiguity is one of three major obstacles to the strategic planning process, as it can lead to a conversation dominated by operational issues.
Most strategists attempt to provide clarity in two ways, and each has its drawbacks. The first is through planning templates that define exactly what is or is not strategic. These, however, usually end up being too rigid or too loose, providing limited practical guidance on what issues should be discussed during planning.
And the second is to allow the meeting’s attendees to collaborate on setting the agenda. Unfortunately, this allows executives to direct the discussion toward issues and pet projects important to them, potentially omitting what is right for the long-term health of the company.
Find a Shared Understanding
The strategy team at one global software and technology firm in CEB’s member network of corporate strategists set out to fix this problem and found a better way to help executives concentrate on strategy at the right time and place.
To develop a shared understanding, the strategy team began holding sessions before strategic planning meetings that usually began with probing questions about potential topics. These included things like:
- Is this issue about anything aside from performing against our financial plan (one-year outlook)?
- Is this issue tied to one of our major strategic initiatives?
- Does this issue have cross-functional impact for multiple businesses and functions across our organization?
In this way, executives themselves recognize what types of issues deserve attention during planning. The firm also put in place a separate operations council that meets regularly to address issues deemed “operational” during the pre-planning qualification meetings. That way, general managers know that even if an issue does not qualify to be discussed during strategic planning, their most pressing issues will not be ignored.
A Renewed Focus
This new protocol drastically improved the productivity of the company’s strategy council meetings. The strategy team estimates that overall, the change increased the amount of time talking about strategic topics by 75%.
The separate meetings helped participants focus on the right kinds of issues. As one executive noted, “It can be very hard to switch your mind-set back-and-forth between a strategic topic and a tactical topic within the same dialogue.”