CEB Blogs


Corporate Strategy

Managers’ 3 Mental Blocks to Strategic Planning (and How to Overcome Them)

Challenging executives' short-term outlook is the best way to improve the results of the strategic planning process

Corporate strategists have long bemoaned the fact that short-term, operational thinking is obstacles to getting their job done. Recent CEB research backs this up too.

The typical solution is to spend a lot of the corporate strategy team’s time and money on streamlining the strategic planning process and clarifying the accompanying instructions. This does make a difference, but strategists will be much more likely to help managers consider the long-term – and so help the firm make good long-term decisions – if they spend less time on planning process and more on counteracting executives’ operational mindsets.

CEB data show that this is six times more successful in terms of improving long-term thinking during the strategic planning process.

Three Sticking Points

CEB data also show strategists can boost long-term thinking by up to 89% in their companies by preparing themselves for three common executive responses to the strategic planning process (as well as making the process as efficient and effortless as possible).

  1. “I’m not really sure what ‘strategic’ means”: Strategic planning means different things to different people. CFOs will be more interested in how they can structure their budgets to support growth. General managers (those that head up business units) more focused on how production will support revenue targets. A CMO may concentrate on digital ways to connect with customers. But none of these will necessarily be a strategic priority for the company as a whole.

    To establish a common language, meet with these types of stakeholders before strategic planning sessions begin. Use probing questions to help them distinguish for themselves which topics are “strategic” and which are “operational,” to prepare for a productive session.

  2. “This discussion is abstract and doesn’t seem relevant to my business, or even most of my goals”: Your best bet to counteract this reaction is to present the future in operational terms.

    Where strategy frameworks (like 2x2s) and outside experts at the planning sessions may seem simplistic or irrelevant, connecting long-term goals with more concrete actions and metrics better suits an operationally-focused mind.

  3. “This is a good opportunity to talk about our recent success at x”: The group dynamics of strategic planning sessions can breed a conversation more about highlighting past successes than about long-term thinking. For example, participants often seek to defend their choices by citing recent revenue numbers, or may quickly bat down ideas that — at first blush — appear too unrealistic or ambitious.

    The answer here is to include the identification of influential peer role models as part of a communication strategy, and to ask them to make presentations that can display and encourage strategic thinking. This will inspire other executives and help transform long-term thinking into a new norm during planning.

Why Long-Term Thinking Matters

Broadly speaking, executives who are good at thinking about long-term growth during strategic planning yield better results. In fact, companies with this sort of leadership are three times more likely (than industry peers) to deliver top quintile financial performance.

These results are based on a measure of readiness for unexpected events and business conditions — called VUCA (for Volatility, Uncertainty, Complexity, Ambiguity) — which emphasizes the ability to effectively anticipate the speed of change, consider all options in the face of uncertainty, develop innovative solutions to complex challenges, and confidently implement the plan, despite ambiguity.

The VUCA concept is a basis for CEB’s long-term thinking index, which is an objective measure of executives’ ability to think about the long-term during strategic planning (see chart 1).


CEB long-term thinking index

Chart 1: CEB Long-term thinking index  Source: CEB analysis


More On…

One Response

Leave a Reply



Recommended For You

Corporate Strategy: Overcome Executives’ Short Termism

On average, strategists devote 21.9 hours per week to planning but many aren't satisfied with...