My newsletter – relaunch
This is a new version of my weekly newsletter
Every week I will send you a new article on strategic thinking. And there will be a lot of content on the topic, including materials available only here – one weekly video, some tweets, and many other things (find it at the end of the message). Just a kind reminder that you may download the first brief presentation on customer needs and value here.
Next week I will send you a useful template for brainstorming about your customers' needs, so don't miss the message the following Tuesday.
So, let's get started.
Why Strategic Thinking and Action Outweighs Strategic Planning
Be careful with your long-term plans
How do you build your long-term plans?
The theory teaches us that we need to follow a classic formula:
Set long-term goals
And it rarely works when it comes to business strategy. Some sources show that up to 90% of strategic plans never fully launch. Many researchers blame bad execution for that. But from my experience, the approach itself is flawed.
Different kinds of planning
Let’s say you’re planning to go hiking with some friends. You collect some information about the places you will visit, consider the weather conditions, etc. And if you work out your route carefully, chances are high that you’ll go to your target alive and well.
The same formula works pretty well if you, say, build a factory. Of course, some unexpected things will inevitably happen. But if you’re an experienced project manager, you’ll foresee most of them.
But when you elaborate a strategic plan for your organization’s development, this logic isn’t applicable. As soon as you begin to act, you’ll change the conditions you analyzed at the previous planning stages.
A new solution for the old market
Imagine you are about to launch a new product. It is software that allows customers to reduce their production costs. You collect tons of data, conduct customer research, and study your competitors’ strengths and weaknesses.
And you learn that:
– Some of the prospects take the production cost very seriously (your “hot” potential customers);
– Some of them believe they have some more critical issues (your “cold” prospects);
– And some can’t afford your solution (your non-customers).
You build up plans, allocate resources, and make other arrangements to prepare for the future battle.
But as soon as you launch your product, the situation starts changing.
– Some competitors offer their customers discounts to prevent them from switching to your software;
– Some try to copycat;
– Some build collaborations with the equipment suppliers to make their solutions more efficient;
– A new competitor enters the market being attracted by your success;
– A part of your “cold customers” change their minds and are ready to buy your product.
And six months later, you discover that the landscape around you has changed beyond recognition. So, you need new research — and new plans.
And it happens not only because we live in a “fast-changing” and unpredictable world. We amplify the external uncertainty factors through our own intervention in the situation. And, thus, we increase the ambiguity.
There is a difference between planning on hiking and strategic business plans. When you go to the mountains, you don’t influence the external conditions. If it must start raining, it will, whether you go or stay home. But when it comes to the market, you’re not an independent observer, and you’re an active doer.
Open AI launched ChatGPT in November 2022. Since then, many companies have begun to think about using AI as a part of their products. So, the world will change quicker than the guys from Open AI might have anticipated.
Strategic thinking vs. Strategic Planning
Some people believe that if we can’t predict the future, we don’t need strategic thinking at all. I would disagree. If a company’s leaders don’t think of the future, they behave reactively rather than proactively.
But we need to make some changes to the classic formula:
Set long-term goals
Strategic thinking and strategic acting don’t imply building long-term plans.Instead, this means making short-term plans and acting quickly. But we have to align short-term programs and action results with long-term goals constantly.
Some more food for thought:
There are two basic approaches to strategic thinking.
The first one:
To analyse the current situation
To build strategic assumptions about the future
To choose a perfect place to your business in this estimated future
To set long-term goals and to find a way to lead your business to this place
The second one:
1. To analyse the current situation
2. To do foresight and create some plausible future scenarios
3. To choose one of them
4. To set long-term goals and to find a way to make this scenario happen
I always opt for the second one.
Some tweets from this week:
VUCA, BANI, TUNA world – journalists claim that the world is changing fast. It makes us all FOMO Sapiens. But: 1. The world isn't changing that fast and unpredictably 2. Human productivity remains the same So: 1. Stop reading news 2. Stick to your strategy and stay focused.
The true purpose of a business is not to earn profit. It is attaining and retaining customers by fulfilling their needs and creating value for them. If you do this consistently, money will follow.
Asking customers for feedback is a great way to learn what they think. But by using it as the only tool, we'll deprive ourselves of understanding the opinion of the ones who could be our customers but decided against it. Asking for non-customers feedback is invaluable