Yes, according to some pundits, who argue that long term and strategy focused enterprise planning has lost its meaning and relevance in a new world order defined by constant turmoil, change, and chaos. Some suggest instead that organizations should focus on preserving operational flexibility and maneuverability, and on being opportunistic – keeping their options open. Others argue that the economy and markets are today too volatile and unpredictable for developing an effective strategic plan. One ‘consultant’ I know has even characterized strategic planning as little more than a fad whose time has now come and gone – just like so many other management infatuations of the past [hard to reconcile though with history, where the development and execution of strategy has been an integral part of organization development – in particular military organizations – for centuries (often attributed to Sun Tzu and his The Art of War, compiled in the 6th century BC, and later translated into French in 1772 and English in 1905)].
I’ve worked with dozens of AEC client leaders – and spoken to hundreds of others – on issues of strategy development, implementation, execution, and strategic planning over the last several years. And indeed, there was a noticeable pause in planning activity associated with the Fall 2008 economic collapse, and lasting to about the midpoint of 2009. Frankly lots of firm leaders/owners were I think stunned by the magnitude and velocity of the downturn, and many struggled simply to stay in business. Other companies chugged right along, seemingly immune to the downturn (though many of these firms have now seen a thinning of opportunities and backlog in 2010). Since this time, a large percentage of these firms and their leaders have now got themselves ‘back on plan – pulling themselves and their teams out of the doldrums, off of the mat, and back on the road to success. Execution timetables have been revised, tactics refreshed, budgets recalculated. And I’ve been particularly heartened by those who, despite the economy have not conceded their dreams and aspirations as meaningless or irrelevant – simply because some or all of their objectives may now prove to be more challenging or difficult to achieve.
Perhaps you’ve wondered about the meaning, relevance, or usefulness of strategic business planning in today’s crazy world? If so, take a look at the following list of common AEC firm issues – and strategic planning’s key areas of focus and outcomes – and ask if your firm wouldn’t benefit substantially, through addressing opportunities to improve in these areas:
1) Vision – the ultimate objective, and planned destination for the firm; a compelling picture of the organization’s main aspirations, one that energizes and excites staff. The vision helps sort out and make sense of the firm’s alternatives, and provides unapologetic clarity to all staff: this is where we’re heading. Firms focused on a future of sustainable success will shift their strategies (how) for achieving the vision, but rarely change the vision (where) itself.
2) Leadership consensus – a big issue in AEC firms today – consensus among the most critical, senior leaders – owners, principals, key managers – of the firm. Without a strong agreement on the big stuff (vision, mission, values, and strategy) the firm acts like a round inflatable boat manned by the leadership team – and each with a paddle. Even in the best of times it’s hard to make the boat do anything but spin; add in a recession, market anxiety, deteriorating firm performance, and implicit message to the troops to “paddle faster.” You get it – not good. Of course leaders don’t have to (and can’t) agree on everything – this sort of consensus leads to lowest common denominator aspirations – but they must agree completely to full pursuit of the plan they’ve designed together.
3) Growth – though it’s been easy to lose sight of the importance of growth, the only thing that’s really changed (for some) is the relative scale and scope of growth. Objectives have been resized, teams restructured, timelines shifted – indeed. Still, there are opportunities available everywhere now, in most all client markets. Marketing and business development capabilities, strategies, plans, and actions are frankly more important today (not less so). It may require a bit more courage than before, but the fundamental premise remains: if you’re not growing, then you’re dying. [But keep in mind that if the firm’s trend line suggests shrinking by 5%, then holding the company to flat is itself a growth strategy].
4) Operations effectiveness – one benefit of the downturn has been the concomitant improvement in some operational areas. Born of necessity, companies have cut out less capable staff, reduced overhead expenses, and improved collections on outstanding invoices. But these welcome improvements have addressed only a part of a very large opportunity for bolstering the firm’s operational productivity. Many areas of waste, rework, and inefficiency remain – in areas such as project management, client relationships, marketing communications, and leadership. And other issues – resulting directly from the downturn itself – have further exacerbated the operations challenge – including (for example) falling utilization rates and firm “de-leveraging;” inattention to employee development, welfare, and motivation; and deteriorating internal communications and connectivity within the staff. Attacking these key issues of operational effectiveness often yields itself a significant payback, with improvements to the bottom line in excess of the real costs of the strategic planning effort.
5) Transition planning – many AEC firm leaders have over the last two years been forced to rethink, postpone, or otherwise set aside their own plans for transition and retirement. Some feel they must focus all of their attention on the firm’s short term prospects –with transition left for tomorrow. Others are holding back because they’d like to sell, but don’t believe they’ll get the price they want or need in today’s market. Still others just don’t want to face the issue at all (feels a bit like planning one’s own funeral), and are using the recession as an excuse to postpone the task. And yet for most AEC organizations the most challenging issue ahead is planning for leadership transition, not ownership transition. Not to suggest that transfer of the ownership (whether internally or through an external sale) is not important – of course it is – but because the transition of leadership to those who’ll run the firm next is at once both the more difficult effort, and also a primary factor in setting the real and intrinsic value of the company itself. Despite this truth, too many AEC firms are today still not investing the time and effort they should with next generation leaders – training and development, mentoring, OTJ experiences – and in practical succession planning for the firm.
Effective strategic business planning builds strong consensus among the organization’s senior leaders – and then across the organization itself – towards achieving big, important, and often difficult objectives – all together the vision or destination of the firm. Through this process leaders decide what they want, and the path they’ll pursue to accomplish the goal. Leaders commit to the plan – what they will do and what they will let go of; how much to grow and how to purse that growth; how to build and enhance the organization’s operations; and how to select, develop and lead the staff and team forward.
Done right, strategic planning is not just a ‘touchy-feely’ team-building session; an amorphous, directionless, and unaccountable exercise; a meaningless Q&A session tacked on to the end of an exhausting day long operations meeting; or an excuse to go golfing at a fancy resort destination (who needs an excuse for that)? Strategic planning can (and should) be a disciplined and focused process, involving a discreet set of process steps, expected outcomes, accountable managers and leaders – and most importantly(!) – a tangible, detailed, clear, concise, action-oriented, and schedule-focused action plan that can and will be implemented by committed team members.
And yes, there are some new tricks and twists in the process of strategic planning– adjustments and enhancements that top organizations are using to improve the relevance and success of planning today – managing planning process costs, balancing short and long term successes, addressing downside scenarios and contingencies, among others. If you’re interested in how these and other adjustments are working today to deliver continued strategic planning returns to AEC firms both large and small – give me a call and let’s chat.
Also, I’d like to hear from any of you who are leveraging strategic business planning in your firm today – what you’re doing and how you’re making out, what’s working well and what isn’t, and how you’ve changed or adjusted the process (if any) during the economic downturn. I’m gathering feedback and perspectives now for a forthcoming whitepaper/e-book on the subject -and would enjoy adding yours into the story.
It’s time. Right around the corner (at least where I live) we’ll have cooler weather, autumn colors, apples to pick, and youth soccer games. And the fall business planning season – a traditionally active period of thinking and planning for our firms, for the coming year and beyond. And especially this year, it’s an ideal time for AEC leaders and owners to rekindle, refocus, and recommit – to dream and create anew an exciting and extraordinary future for the firm and for themselves. As one CEO recently shared with me – “we’re tired of the recession – and we’re planning on growing again next year.”
Yes. I couldn’t have said it any better. Cheers!
