Not too long ago, I featured Rich Horwath, the author of Elevate: The Three Disciplines of Advanced Strategic Thinking here to discuss the common mistakes of strategic planning. Rich has helped thousands of managers with the strategic process.
After the interview, I decided to follow up with him to ask when leaders need to abandon or re-evaluate a strategic plan. I have seen executives stick with a plan and others modify or abandon a plan. Most leaders don’t want to open up the plan over and over because it shows indecisiveness, a lack of confidence or it creates confusion. That said, there are times when a major review or rewrite is important. So, I asked Rich:
When is revisiting the plan the right thing to do?
The ability to modify strategy at the right time can literally save or destroy a business. Here is a checklist of five moments when it is critical to evaluate your strategy.
1. Goals are achieved or changed.
Goals are what you are trying to achieve, and strategy is how you’re going to get there.
It makes sense then, if the destination changes, so too should the path to get there. As you accomplish goals and establish new ones, changes in resource allocation are often required to keep moving forward. In some cases, goals are modified during the course of the year to reflect changes in the market, competitive landscape, or customer profile. It’s important to reflect on the strategy as these changes occur to see if it also needs to be modified.
2. Customer needs evolve.
The endgame of business strategy is to serve customers’ needs in a more profitable way than the competition. But, as the makers of the Polaroid camera, hard- cover encyclopedias, and pagers will tell you, customer needs evolve.
The leaders skilled in strategic thinking are able to continually generate new insights into the emerging needs of key customers. They can then shape their group’s current or future offerings to best meet those evolving needs.
3. Innovation changes the market.
Innovation can be described as creating new value for customers.
The new value may be technological in nature, but it can also be generated in many other ways including service, experience, marketing, process, etc. It may be earth shattering, or it may be minor in nature. The key is to keep a tight pulse on your market, customers, and competitors to understand when innovation, or new value, is being delivered and by whom. Once that’s confirmed, assess your goals and strategies to determine if they need to be adjusted based on this new level of value in the market.
4. Competitors change the perception of value.