There Are Three Key Components Every Strategic Plan Must Have
Building a strategic plan is one of the most important things you will do as the leader of an organization. In this episode, Thor talks to Afterburner’s strategy expert, Will Duke, about the key areas you need to focus on to build a successful strategic plan.
Your plan needs to be:
- Long-term and aligned
- Focused on the critical few goals and objectives
- Fully communicated to your team
[Below is a transcript of the episode.]
Thor: In today’s episode we’re gonna be talking with Will Duke from Afterburner and Will Duke has been working with Fortune 500 companies to help develop their strategic plans and to help identify the critical few priorities for them for the past decade on behalf of Afterburner. Today we’re gonna talk about how to build an aligning long-term plan. Once that plan is built, how do you identify the critical few, those prioritized objectives that make up your strategy. And then last, how do we communicate and disseminate that plan and those priorities across an entire organization.
Thor: This is a topic that’s near and dear to my heart. We’re gonna talk about strategic planning and it’s one that’s just so important and it’s in my opinion the most neglected item in the corporate world, is building out that long-term vision for success. And I can tell you from my experience as a trainer pilot and a fighter pilot, it was imperative that we had that unified vision for success, that unifying strategy along the way. It played into everything that we did. The best example I can give you is, when I graduated from fighter pilot training as an F-15 pilot, I did all of that training down on the beach in Florida.
Thor: So we’re in Panama City, Florida at Tyndall Air Force Base. I spent the first year of flying F-15s at that location. We’d go out and fly every day and our biggest threat, our biggest challenge, was the fact that we’re flying in extremely high humidity, hot temperatures. We had to be concerned about sea states because we could only fly over the water and then take the chance of ejecting into the water when the sea states were at a certain level; and really focused on flying as low as we could over the beaches and doing that great fly by. But then, very quickly after I left Tyndall and went to my operational unit up in Idaho, they sent me to go fly in Alaska and so I moved to the other side of the country and in an environment that was completely different. So no longer hot temperatures, beaches and humidity and sea states, now I’m focused on the fact that the mountains go up to 20,000 feet and I’ve gotta be concerned about even if I’m in bad weather at 15,000 feet I can’t just put it on auto pilot, I got to make sure that Mt. McKinley isn’t right in front of me. And it’s freezing outside, and it’s a very different environment, and I’m flying with people that I’ve never flown with before. But what’s interesting about that experience is that I fit right into my role. And the reason I fit right into my role as a pilot with this team up in Alaska, is because we had a unifying strategy above us that allowed us to execute as one team. It didn’t matter that we were globally dispersed, it didn’t matter that we were remotely dispersed teams across the globe. We had a strategy that started with national defense: It started with the president, that went then down to an air force strategy, and every service had a strategy. We knew clearly how our F-15s played into that strategy. And that provided the common mental model for execution. So that even though I’m flying in a totally different environment, with a totally new group of people, that unifying strategy and long-term vision for success was clear enough to me that we can go out and fly every single one of those missions with 100% clear understanding of what our role was gonna be in a long-term strategy.
Thor: And having now worked with corporations for the past five years to help develop their long-term strategy, I can tell you that that is unique. Most corporations do not have that unifying long-term strategy clearly communicated to the team. Even if they’ve got a good long-term strategy, they very rarely make it succinct enough and very rarely clearly communicate it to the team so that you can go ask anybody in the organization, “What are our priorities this year?”, and you get the same answer. And that’s the big challenge. It’s a challenge because it takes up front work. It’s a challenge because you’ve gotta set aside time to build out that long-term plan to act as the North Star for your organization.
Thor: And today, I’m excited to introduce Will Duke. Now, before we get to Will Duke I’ll give you a little bit of background information on Will. So we call Will, “Q,” that’s his call sign on the team. And the reason we call him Q, was because if you’ve ever seen the James Bond movies, Q, the character and really the Q division, was where all the research and development took place. So that was the brains behind the 007 operation. We had 007 and the secrets agents running around using all these neat toys and gadgets, when it was really Q behind the scenes that was providing that. And that’s exactly what our Q will give to us behind the scenes at Afterburner. So he stays in all the most recent strategic books, he stays in all the Harvard Business Review articles, he stays in all the academics, so that he can translate that for us and we can capture all of the new most current ways to help out clients. So without further ado, I’d like to welcome Will Duke to the Business Thorcast.
Will Duke: Thanks for having me, Thor.
Thor: Yeah, absolutely. Now, you have been doing strategic plans after you had a career in the Navy as a nuclear aircraft carrier engineer for many years. You’ve been doing strategic plan building for the past decade for Afterburner. How many strategic plans do you think you’ve built out in that decade?
WD: Oh, lost count years ago. [chuckle] That’s not an easy question to answer.
Thor: So you are certainly an expert at helping to build out these strategic plans. And it’s interesting because you’ve seen a lot of market changes take place over that timeframe. And things come in and out of vogue, and finally in a place where we are today where there seems to be the focus on customer obsession and creating strategies that support an ever-changing marketplace. So based off that, let’s start our conversation around where you think the major issues reside with creating that long-term plan.
Three Reasons Your Current Strategic Plan Won’t Be Executed
WD: Absolutely. So in my experience, and that experience is from pretty much every kind of industry, from oil and gas, to healthcare, to banking, you name it. We see some of the same basic issues arise from client to client to client. And I really put it into three buckets, three main things. There are issues around process, around priority, and around sustainment. Those are kind of the three big things if you don’t get right, strategy just doesn’t get executed.
Thor: So let’s start with process, then, Q. As you’ve looked at companies over the past decade that have made the attempt to build out long-term strategic plans, what are they missing in their process? Where would you emphasize if you were to give our listeners a couple of takeaways for how they can emphasize process?
WD: Well, this is one of the things that excites me most about working at Afterburner for a decade is, and I like to inject a little bit of humor in these three processes. And one of my favorite Saturday Night Live skits of all times starred Dan Aykroyd back in the early ’70s. And it’s the Bass-O-Matic ’76. So after you listen to this podcast, please go Google, whatever you need to do, the Bass-O-Matic ’76. Basically, what you’ll see in the Bass-O-Matic ’76 is what I call “everything in a bucket.” And what we do at Afterburner is we create process around known good practices, the science of planning, so forth and so on, so that anyone can follow it in a rational way. We don’t leave things out. And the reason I say that is there’s a lot of wisdom out there on the bookshelves, and in the magazines, and from gurus. The issue is there’s no structure around it. So if you can put structure around process, well, then it does become good process, right? And one of my favorite examples is a really wonderful book, and I recommended any leader in any organization read it and it’s the handbook of the Center of Creative Leadership. Wonderful book, great wisdom in it. But again, it’s kind of everything in a bucket. You don’t know where to begin, “Where do I put this step here and that step there?” Well, we do that for you. So really it’s about getting the process right. And if you have a process for strategy, then the product, the strategy itself, leads to the other thing: Priority. And you have to prioritize your strategy. I use another humorous kind of story, I call it, “Henry Porter and the Binder of Paralysis.” ‘Cause this is what I’ve seen more and more and that’s my Harry Potter reference, but I changed it to Henry Porter because two of my favorite business guru strategists are Henry Mintzberg and Michael Porter. Many of you listening to this podcast have probably read something from either one of these business gurus. Here’s what we are seeing more and more often: A company will hire an outside consultancy or go forth and find someone to help them or some group to help them analyze their market and decide what their primary strategic priorities should be.
WD: How should they change their business, what markets should they go after, so forth and so on. Great work is done and the product there is a binder of things to do. And I’ve seen that to be 26 things, I’ve seen it to be 96, maybe even 100 different things. What inevitably happens is that great work sits on a shelf and the executive team thinks about, “Well, just everybody go out and execute this,” without any real prioritization, so a year later they come back and realize they’ve done none of those 96 or 100 or 26 things. So this great work and the great advice just ends up being a paralyzing dart that just drops them dead in their tracks. And it’s over with and they wind up executing on nothing. So you’ve got to prioritize because we know in our experience and in other great business gurus and gurus of business strategy will tell you: The rule of thumb is you can really only tackle about three things at once.
WD: If you’re trying to do four things, yeah, you might get four things done; you might just get two. But three is the rule of thumb. If you’re trying to do six or 10 you’re probably making a huge mistake. You’re gonna have to decide what it is to tackle first, and part of that process is making that determination. What are the truly most important priorities and strategy? And the third thing is Sustainment. So, great. Once you’ve got a great strategy that’s been developed through process, once you’ve prioritized the things you need to tackle, how do you actually sustain that energy? And I don’t know if anyone’s like me, but when I worked in a Fortune 500 company, we did this every year. Get together, and we strategize, and in January we’d walk out of the room all energized about the awesome things that we’re gonna do. Then February hits and we’re all depressed because we’ve done none of it again. ‘Cause we’ve lost that inertia. There’s another wonderful story that I’ve read over and over again in business articles and strategy articles, and it’s the Nearsighted Rhinoceros. And it’s actually true that rhinoceroses, and I don’t know if that’s the correct plural form of rhinoceros, they are actually near-sighted. They have been observed in the wild to be startled by just about anything, including a tree or a boulder, and they will charge after that object because they can’t see it very well. Once they realize it’s not a real threat, they’ll just stop and go back to eating grass again. And this is very much like what happens after the startling event of creating strategy in December or January of every year. The rhinoceros charges very quickly, then kinda loses interest and just stops and goes about its old habits of fighting fires and getting stuck in the tactics.
WD: So that is a leadership problem. The leaders have to set the goals, communicate it frequently and ultimately set, as you know, “execution rhythm” is what we call it, that’s going to actually drive the frequency and the urgency behind executing strategy effectively. Those are kind of the three things that we’ve seen over a decade of working with our clients.
Thor: Wow. So now all the listeners can tell very easily why we call him Q, and how he brings a much more cerebral academic approach to the application that we call flawless execution. He really equips us behind the scenes, with a lot of the “why” and the background information that allows these practices to succeed. So let’s kind of break those down one by one. You talked about the process first and you said the Bass-O-Matic, feels like we’re trying to chop up everything into that strategy. So for the listeners that are saying, “Alright. Well, what do I do?” If you were to leave them with just a few key takeaways on the process that they are going to use to build out their long-term strategic plan, knowing that they don’t have three weeks of the leadership’s time, that this is gonna have to be very succinct in the short period of time that they are together, and you and I both know we typically only get about a day and a half with these strategic leaders within a company. And in that short period of time we gotta build that plan. What are a few takeaways you’d give a group that is looking to undertake that process?
WD: First, you have to start with the end in mind. Where are we going? And we call that, of course, the HDD. Many companies will call that the vision. They may have things like a BHAG, a Big Hairy Audacious Goal, which is 25 years out. If you’re trying to run in a sprint for 25 years to get to a BHAG you may want to draw it in a little bit more. So one of the things is building what we call the HDD, that vision, on a little shorter basis. So you can put some more granularity around it, and really determine and measure where it is that you wanna go. Because until you have that in state and mind, how do you work backwards from that future to really determine what the first steps are? Then you develop the strategy: What are the main things, those prioritized things that you need to tackle? And that’s a collaborative effort. There’s really two important pieces of this: The process of developing the plan itself, and the process of collaborating to put that plan together with the stakeholders that are gonna be involved. ‘Cause you want… Remember that sustainment’s a problem, so you’ve got to be able to build the energy, the interest, and the buy in as part of the process, so that the sustainment carries itself through further. And everyone understands well and clearly where they’re going, so the communication effort from leadership is a lot easier.
Thor: So it goes back to the fact that just merely having that long-term plan is not the objective of that planning session, right? You’re building in the fuel that you’re gonna consume during execution, and the fuel is the buy in and the motivation and the alignment with the rest of the team members. It goes back to that quote that you and I have talked about many times from General Eisenhower. He said, “Plans are nothing, planning is everything.” And here’s the general who’s in charge of our Allied forces during World War II, obviously our most challenging period in US history. And he’s saying plans are nothing. Are you kidding me? Plans are nothing? Well, planning is everything. It’s the fact that you’re getting your team together and planning as a group, and putting their fingerprints on it, and getting their insights and their inputs, so that they feel like that the plan is part theirs and they have ownership of it, so they’re more likely to go execute it. Is that right?
WD: Absolutely, and they understand what’s in that. Now it’s not a binder of paralysis, it’s a much more condensed, easily understood, aligned document, so that everyone can carry it out. And the really important part there, Thor, is that a plan is truly nothing; it’s just a piece of paper. It’s the alignment and the understanding that leaves that room after that document is created that’s the most important thing. Because that plan, in a turbulent environment like we live in today, will have to change. It will have to be adopted, or adapted. You’ll have to iterate around it. So it’s not gonna be the same, we’re gonna have to make some pivots before we get to that in state, that HDD.
Thor: And you and I have both gone to organizations that had another consulting firm come in, one of the big five, and they’ve basically given them a plan and they’ve handed over, we call it the White Binder, and you get to see this huge binder that sits up on their desk, and it’s a great plan because it has all of these industry insights, and trends, and great analysis, and it’s very prescriptive in what they need to do. But the big challenge we see in that is it wasn’t built with the inputs from the team members that have to go execute it. And so very often that plan just gathers dust, right?
WD: It’s not owned.
WD: It’s not owned by anyone, it’s given. And that goes usually nowhere.
Thor: Yeah. Now that we have the process to go after, it still feels like we’re eating the elephant to some extent. In other words, what would you tell a team that’s looking to build out their long-term strategic plan? Where should they focus their energy if they only have a day and a half together as a team and they wanna build out that HDD? By the way, that stands for High Definition Destination, that’s our long-term vision for success, long-term in about three years is the timeframe we typically use. Where should they focus their attention on how to create those details for that destination?
WD: One of the things is before you come together in that room, one thing that no process can answer is the strategic insight that the individuals in any company have intrinsically, that they understand and they’re coming together, they achieve sometimes epiphanies. It’s the sharing of that information that insights often come about. So the process can, it can help them see those things. But the information has to come from the individual. So if we don’t have individual or we don’t have strategic insight when we come into the room… So we have to think about our market. We have to think about what’s going on. So it’s not just about the old SWOT model, Strengths, Weaknesses, Opportunities and Threats, but also trends. What is going on in the environment and what does that mean to us? Let’s think outside of our company for a little while, ’cause you have to think about your environment. You’re a unique species, what’s your niche in the environment? Because if you’re just eating fish all day and you forget about the river you live in, then you’re not truly thinking strategically.
WD: So when you come in and that’s a main input to the process, you’re better able to define your HDD and then determine through some rigorous analysis, like we provide, threats, resources and inside analysis, some other process, constructions that you ultimately will get to that prioritized list of strategic objectives which really becomes your strategy. Those few things that you’re gonna pursue.
Thor: So when you get your team together, and you only got them for a short period of time, and you need to define what success looks like in the long-term, in three years, as you’re building out this destination… I know the approach that you and I typically take with the clients is to bucket that destination into specific categories, and those come from both Michael Porter, as well as the military examples of building strategy in the past. Do you think that helps to visualize that future in mutually exclusive areas so that we can help to define that more cohesively?
WD: Right. Part of the process is looking at your organization and its place and its environment from every major angle. It’s about perspectives. Because if you enter the process in a limited way of only looking at it one way, right, you’ve got to think about it from all the relevant angles so you truly can build that three dimensional and four-dimensional, three dimensional in space and another dimension of time, of where you’re going and what that pathway to the future looks like.
Thor: Yeah. Love it. Once they’ve got, we call them the key areas, once they’ve defined what success looks like in three years according to their culture, according to their brand, financially what have they accomplished… How do we then take that destination and start to identify the strategy to get there? In other words, how do you recommend that a team goes about figuring out those critical leverage points?
WD: Absolutely. When you know where you’re going, the landscape between you and the destination becomes a little more clear. It’s not perfectly clear, but you have a lot more clarity than before. Then you can begin to look at, “Hey, what do we expect the potential obstacles to be?” based on what we know now. We can’t foresee the future, but we can have a pretty good idea of what’s gonna stand in our way. And what resources? Not only that we already have, but what kind of resources or capabilities are we gonna have to develop in order to get to that destination? Very, very important piece of the process. And then looking at, “Hey, what else is happening with other industries or competitors? What are they doing? What are the lessons learned maybe coming from them to add and enrich that process in that better understanding of the pathway?” And then it’s also looking at your own organization. How is it structured? How does it function? How does it create value for its customers? How would you map that out? Very, very powerful process to think about how your organization creates value and how it must create value in the future. So how is your system going to have to change in order to get to that HDD? So now you start looking at externally and now you’re gonna start looking internally at what needs to happen.
WD: And those are the inputs that really develop an extraordinarily precise insight into the strategy.
Thor: So we know where we’re going in the form of our destination: It’s crystal clear, it’s high definition, it’s broken up into mutually exclusive areas, we’ve defined that. Now we start to say, “Well, that’s our destination. We all agree on that.” Everybody looking around the room nodding heads, yep, okay. Then what are the biggest threats? What are the biggest obstacles on our path to get there? What are the biggest resources? We whittle that away down to the critical few, though. This is where you come up with your top three elements to your strategy to go pursue that destination, is that right?
WD: Right, and everyone has a different idea. So, part of our process helped everyone provide a little bit of personal input and insight and judgment so that we can assess those priorities in a holistic way, because wisdom of the crafts: Everyone knows better than any one person is the premise, right? So, if we get everyone’s evaluation, and that’s exactly what we do in our process, we’ll come up with a more accurately and appropriately prioritized list of strategic objectives. So, it’s a lot of fun.
Thor: So, here’s the biggest pushback we get in this conversation, by the way. The client will say, “Hey, we love the idea of coming up with those initial first strategic objectives, those critical few, those top three things that are prioritized that we’ve got to do, but we’re not gonna build out a long-term vision for success, because you don’t understand our industry. You don’t understand the market we are in. It’s moving so fast that it would be silly to plan something out in the long-term because things change so quickly around us.” What do you say when somebody pushes back and says, “I don’t have time to build up the long-term vision for success. Doesn’t make sense.”
WD: Well, part of it is not getting too specific. It’s about getting specific in terms of all the different ways in which a business defines itself, and we do that in the HDD. But identifying the different strategic priorities is about focusing on a few things but not excluding anything, because as we execute on any one of those few priorities, we’re going to realize, “Hey, we either got them done, we were successful,” or, “But you know what? The environment changed and now number seven or number eight or number 12 that we identified in the process, it makes sense that this should be number two or number three or maybe number one now.” So, all of that work, it isn’t in vain, because now you have a better aligned understanding of your environment and as that environment changes, you’re more informed about the adaptations that you need to make to your strategy.
Thor: Yeah. What’s fascinated me is that, like I said, we got that pushback all the time, “Our market moves too fast,” “Three years is too long to think about,” “I don’t know where this is gonna be in three years.” What we’ve found, and you’ve seen this as well, is that when they plan out that long-term vision for success, even amidst the turbulence and the change that takes place in the market today, that destination really doesn’t change.
WD: It doesn’t.
Thor: And you can plan it out in detail, in high detail, and define it clearly for that group and it’s not gonna change. Now, something does have to change, ’cause the market obviously is moving around you, things are changing every single second. The thing that changes from our perspective is the terrain around us, the current environment that we find ourselves in. So, even though the destination doesn’t change, that strategy changes, so those top three things are gonna change over time and you’re gonna find you have new resources that you hadn’t anticipated, that you got new threats and obstacles that you hadn’t anticipated, and you’re gonna have to adapt for those. But you have a unifying constant vision anchoring, North Star-like, high definition destination that the entire team is focused on and you can adapt and react in relation to that destination as the inevitable changes to the current environment take place.
WD: Yeah, perfectly said, and as a great example, one of the things that we do, it’s a simple example we often use when we’re talking about the HDD in financial terms. An HDD doesn’t say, “We will be a $10 billion company in three years.” That’s not what we mean. We might say instead, “We wanna be a financially healthy company in three years.” Because if we said we’re gonna be a $10 billion-year company, in three years, what if there’s a market crash? What if there is something that we have absolutely no control over? But we’re still successful in that market, we’re just not at $10 billion. Would we consider ourselves unsuccessful? No, not necessarily. And then if there’s a boom in the market which makes $10 billion easy to make, will we pat ourselves on the back and say, “Hey, we made $10 billion!” No, we still wanna be a healthy and competitive company in three years. And we call that intent. We’re not talking about necessarily specifics, not necessarily highly objective measures. We’ll include that too, but it’s not primary. We want subjective, so that it doesn’t matter what happens in the world, we’re still describing our HDD in terms that are unchangeable.
Thor: Yeah. And we know that we’ve helped out a large tech company build their high definition destination and then they underwent the largest tech merger in history, and even through that turbulence and change, they changed very little in their destination because it was still far enough into the future that even with the additional resources and challenges that came about as this huge merger took place, it still kept their destination the same.
WD: Right. Often the only change is, “You know what? We should’ve said an A instead of a B.” Or just a small word change, a little bit of the meaning to it, but there’s never really a major change to the HDD.
Thor: Change happy to glad. And the one that sticks out for me the most, the best example of this is when we went to the moon in the ’60s. And if you read the history on this, they defined the real estate on the moon that they were gonna land in, down to half the size of a football field, and they figured out where they’re gonna land on this giant moon in 1965. So, four years before they ever made the launch, four years before they ever were considering going up into space, they knew exactly where they were gonna land. It seems like that would be the last thing they’d figure out, right? Why have a conversation about that specific destination upfront? Why not figure everything else out up until you’re getting to the moon and heck, you pick it out the day you’re there, right? But that was important to them because every decision was made in relation to that destination from that day forward. Once they all aligned to that small piece of real estate on the moon, they were able to work backwards from that and figure out what steps they needed to take today. What are the critical few things that need to happen right now? And their path changed, and they had to re-vector themselves even up to the day that they were flying, in flight on the way to the moon. They had to change their vector to made sure they hit that destination, but it aligned their vision for success.
Thor: Let’s close out with your thoughts on, now you’ve got the plan in hand, this high definition destination. It’s a strategic plan, it’s prioritized, you’re thinking to yourself, “Gosh, this could really work. We’ve got alignment to it, we’ve got commitment, we’ve got insights that we wouldn’t have gotten otherwise.” You’re really excited about it. How do you create that execution rhythm towards it now? How do we establish that cadence to actually get it done?
WD: Yeah, that’s a great question. So, execution rhythm, it’s going to vary from company to company, market to market, industry to industry. But when you’re dealing with strategic rhythm you’re probably gonna wanna get together at least on a monthly, if not at a minimum, quarterly basis to evaluate your strategy. The question is where does that come from? Well, for anyone that understands the basics of Flawless Execution, we talk about debriefing a lot as part of the basic Flawless Execution Cycle: Plan, Brief, Execute, Debrief. Well, debriefing isn’t just a tactical thing. Debriefing occurs when it occurs at every level, really the tactical or mission or project level. It also occurs at the strategic and the organizational level as well, and it cascades up. So we bring that front line learning, because who is learning the most about the market? It’s the people on the front lines, the people that are interacting with the customers. When that information gets cascaded upwards in the organization to those quarterly or monthly strategic debriefs, that informs the whole company about, “Where are we? Is our strategy effective?” Because at this level you’re asking in the debrief, “Is our strategy effective?” And if the answer is “no”, that’s your cue to change it.
WD: And that’s one of the tragedies of many companies: They set that strategy at the first of the year, January or in December. And they look at it at the end of the year and they realize they didn’t get there because they didn’t make the pivots that they needed to make on a more frequent basis. They didn’t have an execution rhythm that was faster than the rate of change of the market and that’s the key. Your execution rhythm at the strategic level has to be faster than the rate of change of the market.
Thor: And I also think it’s why Afterburner gets really busy, around the August timeframe, because all of a sudden companies are realizing, for those that have the fiscal year aligned with the calendar year, they’re starting to realize, “Uh-oh, we’re not making enough progress on those annual objectives around the August timeframe.” They wake up from the summer and call us because now they need to hurry up to catch up and make up a lot of lost ground because they didn’t revisit that strategic plan on multiple occasions prior to that.
WD: Absolutely right.
Thor: Well, great stuff. We’ve just scratched the surface on this conversation. It’s the toughest thing that we help clients to do and that’s build out long-term strategic plans, but I would also argue it’s the most valuable thing that we can do as well. It’s the way that you anchor a team on success, and you help a team to identify what’s that common mental model, that common vision for where we’re going as an organization of the hundred things we could do and you could even argue we should do. What are the three things we must do to start marching in that direction, how do we prioritize. And then finally, how do we communicate that to the team in a succinct way that allows them to capture it and live out that strategic plan over the next year.