Almost every growth-minded company has a strategic plan. Unfortunately, the vast majority of strategic plans we see are lists of projects that don’t comprise a strategy. Worse, they place heavy demand on resources while potentially creating new operational systems or solutions within functional areas, which may not work seamlessly with the new direction of another department. Together, this can add work, undermine results and cause companies to spend lots of money with little to show for it.
The odds that strategic planning will improve your company’s growth performance are pretty dismal. Consider these statistics:
- Approximately 90% of strategic plans “fail” in the execution stage — meaning they either don’t finish what they start or don’t get the results they intended to get.
- Only 13% of US companies are able to achieve modest growth and sustain it for a period of five or more years.
- Only one in four strategic initiatives create value. (That is a bet you wouldn’t place in Las Vegas.)
There is a better way, and it’s called “strategic engineering”.
Strategic engineering is distinct from strategic planning in several ways. First, strategic engineering is not a process; it’s an outcome. Processes don’t generate results; people do. Second, it is not accomplished in a day. It takes some work to figure out the best option that will drive real results, but the payout is worth it. Third, strategy implementation becomes dynamic in that after the strategy is created, the delivery of it is the fundamental work of the organisation and is not just an overlay of projects. Strategic engineering promotes focus and alignment, which in turn increases the speed of change.
To drive growth, companies should focus on strategic engineering rather than strategic planning. Here are three reasons why.
1. Strategic planning encourages companies to look inward, while strategic engineering promotes an “outside-in” mindset.
One of the biggest inhibitors to growth is the “business gravity” born of habit that blocks our ability to see potential opportunities. To overcome that, the management team needs to use an outside-in mindset, asking what the market needs rather than what the company wants to achieve. Strategic engineering starts with a deep dive into the market space to determine relevant trends and opportunities.
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