Strategic planning involves making decisions to allocate time, money and focus in the present to achieve an outcome in the future.
Resource constraints make strategic planning necessary and useful.
If you had unlimited funds, people, and time to invest, you don’t need strategic planning. You would simply decide to pursue all options simultaneously without any negative consequences.
Good strategic planning faces the reality of these tradeoff decisions in a brutally realistic way.
Poor strategic planning denies this reality.
Stated differently, good strategic planning involves agonizingly difficult TRADEOFFS.
If you’re not agonizing over the tradeoff decisions, then you’re probably not doing strategic planning correctly.
Let me give you two examples — one in corporate strategy and another in career strategy.
Let’s say your client or company faces five potential market opportunities. After much careful analysis, all five opportunities are excellent.
Which one do you choose?
Let’s say initial pilot projects for all five opportunities show that all look very promising.
Which one do you choose?
Let’s say you have friends running each of the five pilot projects and their skills are such that they can’t be reassigned to any of the four other projects.
For any project you don’t approve, you need to fire four of your friends.
Imagine your four closest friends. Now imagine having to fire each of them.
Which project do you keep?
As the late Steve Jobs said, saying “yes” to a good idea is very easy. Saying “no” to the other 999 ideas is hard.
Sometimes there is no single best opportunity.
Sometimes all the opportunities are excellent for very different, but equally valid reasons.
Sometimes you lack incomplete information but you have to decide anyway.
I call these types of decisions “the burden of leadership.”
Many executives and executive committees choose to not choose. Rather than make the hard choice now on which projects to say “yes” to and which to say “no” to, they say “maybe” to all of them.
The nice thing about saying “maybe” is you never end up being wrong about anything.
If an opportunity doesn’t work out, you can say “ah ha, I knew it. It wasn’t worth investing in fully. I’m glad I didn’t fully commit and waste my time.”
If an opportunity works out well, you can say “ah ha, I knew it. It’s a good thing I invested somewhat in this project.”
While this thinking works in theory, in practice competition exists. If your competition commits fully to a good opportunity and you pursue it half-heartedly, they have an enormous advantage.
In practice, when you pursue a good opportunity with a “maybe” level of commitment, sometimes it’s not the opportunity that leads to a failure, it’s the lack of commitment.
While it’s useful to do market testing, prototypes and pilot programs, with every opportunity there comes a time when you reach a point of diminishing returns on doing more analysis, homework and research.
There comes a time where you have to decide: Are you “in,” or are you “out”?
Having the courage to face these decisions and actually DECIDE and COMMIT makes good strategic planning tortuously difficult.
A similar tradeoff decision occurs when recruiting for management consulting jobs.
It makes sense to gather information, learn about the field, and get a preliminary assessment on whether or not you’d be qualified (Click Here for information on my consulting resume assessment score card calculator).
To prepare well for the case interview takes time and energy.
Initially, it makes efficient sense to intentionally not prepare for the case until after you secure an interview.
In practice, this poses two problems.
First, the typical lead time between when a firm notifies you that you have the interview and when the interview takes place is 5 – 7 days. This doesn’t leave you much time.
Second, amongst my readers, the average amount of case preparation and practice time among those who received job offers from MBB is around 50 hours.
In other words, the most time-efficient approach of deciding to prepare for the case only after you’re guaranteed an interview doesn’t leave you with much time to prepare.
A minority of people in this position pull off an offer. Most do not. The lucky ones are ones who learned their lesson and are able to prepare fully the next academic year. (I get a LOT of emails to this effect.)
In such a competitive field, the decision to commit to preparing for the case interview occurs BEFORE you find out if you have secured an interview. It’s a lousy time to make a decision because your information is incomplete.
But guess what, this is what strategic planning is all about — making high impact decisions in the absence of perfect information.
Welcome to the real world.
Now you know why good strategic planning sucks.
If you fully commit to preparing for the case (reading my book Case Interview Secrets, practicing cases often, using my LOMS program to hear what an excellent case performance sounds like, or practicing with former MBB case interviewers, your odds of success go up considerable.
Conversely if you take the “maybe” approach, your odds of success drop like a rock due to insufficient time to practice. If you don’t succeed in this scenario, it’s far too easy to draw the erroneous conclusion that “ah ha, I knew it. It wasn’t worth the effort to prepare more.”
There’s an element of a self-fulfilling prophecy when it comes to making strategic choices.
Choosing to commit is a choice. You will definitely improve your chances of success. If you succeed, that’s great. If you fail, that stinks tremendously.
Choosing to definitively not commit is also a choice. Your chances of success will be definitely zero. There is no hope what-so-ever.
Choosing not to choose (a.k.a saying “maybe”) also happens to be a choice. You do just enough to keep hope alive, but not enough to achieve definitive mastery or competence. If/when you fail, you have a nice excuse built in as to why you didn’t succeed – you didn’t practice enough.
In a highly competitive market, all else being equal, the committed will nearly always outperform the maybes.
The question is: What choice will YOU make for YOUR life and YOUR career?
Do you go “all in” and risk major failure?
Do you go “maybe” to get close enough to success to see it, but never close enough to achieve it?
And now you know why good strategic planning sucks.