Innovation Should Form the Backbone of Your Strategic Planning

When I speak to executives regarding their strategic planning function, they often tell me about the methodology they have embraced for producing their strategic plan.  There is nothing wrong with having a methodology for performing  recurring tasks and strategic planning should be repeated at least annually and reviewed even more frequently, as market and other conditions change.  However, any 'method' must be employed carefully, so that it does not inadvertently squeeze innovation out of the outcome.

The first thing to remember about strategic planning is that it has just two components.

First, it is merely a 'plan,' not a lock-step 'do or die' directive.  Thus, it needs to be revisited frequently.  The days when anything could be planned a year in advance and expected to remain constant for that period of time is long since past.  Today, market, economic, geo-political, even weather and other factors change outcomes so quickly that 365 days during which one's plans remain untouched by the external forces of reality is highly unlikely.

Secondly, the first word in the phrase 'strategic planning' is 'STRATEGIC.'  I often see carefully crafted voluminous 'strategic plans' that encompass everything except real strategies.  The definition of the word strategy is:  

• A plan of action or policy designed to achieve a major or overall aim.

 Often contrasted with Tactics. (emphasis added)

To begin with, if a strategic plan contains spreadsheets of sales projections and budgets, it is an operating plan (read Tactical).  A truly strategic plan should be directed toward achieving 'a plan of action or policy designed to achieve a major or overall aim.'  Such plans are not primarily numbers based, but rather strategy (thought) based.

Furthermore, in order to achieve long term sustainability, your strategic plan should focus on how innovation will be employed to achieve strategies that create leap-ahead breakthroughs over the competition.  For example, immediately following the  post 2011 Christmas retail season, the executive team of retail giant GSI Commerce, a unit of eBay, began working on how to extend the pre-Christmas 2012 online shopping period by one hour.

An hour you may ask?  How could just a singe hour matter enough to be considered strategic?  That hour will translate into a 10% sales increase in the shipments for GSI's customers, companies like Timberland, Aeropostale, Nautica and numerous others, on the last and one of the largest volume internet retail sales days before Christmas.  More than merely free shipping upgrades, major warehouse configuration and other innovative changes during the year made it possible to extend the time by a single hour for orders guaranteed for delivery by December 24th.

Too often, when organizations are deep in the midst of their strategic planning initiative, they lose sight of the 'hour' type strategic opportunities that can fundamentally alter the business.  Gaining the precious 'hour' has led GSI to pioneer and adopt innovative approaches to warehouse flow, staffing, systems, procedures and other 'routine' operations that are paying large dividends each and every day of the year.

Whether your organization has adopted a two step, three step or no fixed methodology for strategic planning, make certain that your focus remains on ensuring that your plan is truly 'strategic' in that it focuses on the power of innovation to create new opportunities for sustainable growth and profitability.  Real innovation should form the core of your strategic plan.

John Di Frances is a business author, executive advisor and professinal keynote speaker specializing in business innovation.  He is also the founder of the Red Door Innovation Center