The Four Strategic Questions Everyone Should Ask
The motto for strategic planning used to be “Think long-term!” —five, ten, fifteen years out.
Throw that old adage out the window. It never really worked, and now we don’t even have the illusion that it might. No one can predict that far out anymore. If weather forecasts are relatively unreliable more than three DAYS out, what makes you think you can predict global markets, the vagaries of customer tastes, the pace of technology change or the moves of competitors?
Energy firms and those building huge capital projects like dams, nuclear reactors, and refineries are forced to run scenarios that allow them to make money even if the chaotic future weaves from side to side like a drunken sailor. Pity pharmaceutical firms who have to invest in a drug pipeline that could take a decade to pay off, if ever. Who knows what might happen in the meantime?
For faster-moving industries, such as electronics or autos, the cycle of change is much faster, on the order of months or a year. Even shorter, if you are planning for change inside your own organization, such as starting a new function like knowledge management or process improvement or analytics, your horizon might be as blisteringly short as three months. You better get a quick win before the attention span of your superiors and colleagues wanders off to the next shiny object of hope.
So the first question a strategic planner needs to ask him or herself is “What is my time horizon?” This according to Peter Korsten, Vice President and Partner, IBM, and a new member of APQC’s Board of Directors. I recently interviewed Peter for my Big Thinkers, Big Ideas series. We discussed the challenges of building strategy in a fast moving world and what the role of benchmarking might be.
Carla: Peter, what questions should CEOs be asking to prepare for the rapid pace of change?
Peter: If you’re a CEO—or for that matter, if you’re a marketing, operations, finance, information, human resources, or supply chain officer—you have to set a horizon. The first question you have to ask is, “Where is my horizon?” That is, “How far can I plan ahead?”
Now, the timeframe on the horizon that most leaders are talking about is approximately three to five years. They know what’s going on this year and they know what’s coming around the corner in the next year or two, but it starts to become very blurry at the three-year horizon.
The second question is, “What do I want to achieve?” That might be, for example, market share, the product proposition, a certain kind of innovation, a group of partnerships, or geographic expansion.
Once you know when you want to go and what you want to achieve, the third question is, “What technology am I going to deploy to get there?” Five years ago, people were not including technology in every single decision. Since we started the C-Suite Series (at IBM), we’ve been asking CEOs to pick which factors are most important for the future of their companies. Of the 11 factors we asked about, technology used to come in at No. 6. But in the last two years, it’s become the No. 1 factor for CEOs. Everyone understands that if they don’t have the right technology, they’re not going to get where they want to be.
The final big question is, “What can I learn from other industries?” Very often, people say, “I’m in the automotive industry, my competitor is doing this and therefore, I’m doing that.” But an automotive company could gain so much insight from the telecom industry, the retail industry, or the banking industry. The lessons around the corner are often not within your own industry, but within another industry.
To recap, my four questions are:
1. What’s your time horizon?
2. Where do you want to go?
3. Which technology do you need to involve?
4. What can you learn from other industries to get there?
It is this final question that positions benchmarking as critical to cutting the risks of investing for an uncertain future and what promise that future holds, read more from my interview with Peter.
You can go to the APQC Knowledge Base to read more of my Big Thinkers, Big Ideas interviews.
You can connect with me on Twitter @odell_carla