Some executives are surprised when I talk about strategy in terms of creativity and insight. While business professionals are comfortable discussing their products or services from that perspective, they’re generally unfamiliar with the role these concepts play in strategy formation. They associate the powers of imagination and intuitiveness with the right-brained thought process common to their marketing department and product development team, not with the seemingly “logical” world of strategy and planning.
It’s hard to fault these executives given the lack of consensus on a single definition for the word strategy. As you can see from the rotating quotes on the right-hand side of your screen, strategy is defined in many ways by many different people. Among the individuals quoted on this website are prolific writers and thought leaders in the field of strategic management. Note that none of their quotes mentions creativity as a component of strategy or even includes it as part of the term’s definition. Generations of executives have honed their skills in a milieu that depicts strategic thinking as a logical, sequential, planning process. It’s not surprising for confusion to ensue when that assumption is challenged. Continue Reading
The Greek philosopher Heraclitus once said, “Nothing endures but change.” He was pointing to the rather obvious fact that our world is in a state of continuous motion. And at times like we’re experiencing now, the process of everlasting change becomes unmistakably clear.
However, in what many consider more “typical” economic conditions (although there’s really no such thing), it’s easy to ignore the fact that nothing ever stays the same. For instance, we believe that our customers will call because that’s what they’ve always done. We believe that our suppliers will always be there for us because they have been in the past. And we believe that growth is inevitable because it’s what our history has told us to expect.
I never get an argument when I point out that planning is a future-oriented activity. In fact, an extended planning horizon is a key factor that differentiates strategic planning from an organization’s annual operating plan. The complex, resource-intensive nature of strategic initiatives may dictate a time frame that spans a two-, four-, or even seven-year planning cycle. Although far less common, some organizations maintain a vision that can span ten years or more.
As you might expect, timing is relative and specific to the organization and industry in question. For a software company, then, an appropriate long-range plan might encompass eighteen months—and possibly fewer. But if you’re an electric utility and plan to build a nuclear power plant, four to seven years is certainly more realistic. For most organizations, a two- to four-year planning horizon seems to be the sweet spot: It provides a time frame that allows for specific decision making without being overly speculative. It also allows for a sufficient buffer against changes in the industry or economy that might necessitate a minor or more drastic change in direction.