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Wall Street’s fear gauge, the Cboe Volatility Index, is up 75%. Conventional approaches to strategic planning are no longer agile enough to respond to this volatile, complex and uncertain business environment we find ourselves in. The usual methods lead to a no-man’s-land that is disconnected from the day-to-day reality of the organization, and, ultimately, the planning process becomes an exercise in ticking management boxes rather than a path to high performance.
Applying lessons learned from an unlikely source
Enter the United States military, a highly effective and efficient machine that can strategically plan and execute a mission in any corner of the planet.
You might ask, are business and military strategic planning techniques at all similar? To address this question, I had the privilege of connecting with General (retired) David Petraeus, who commanded coalition forces in Iraq and was the former Director of the Central Intelligence Agency.
General Petraeus’ credentials in leading thousands of people across borders while navigating extraordinarily complex and challenging situations delivers an excellent case study for today’s business leaders. Here are six takeaways on strategic planning insights, opportunities and overlaps between the military and business that we exchanged on.
1. MISSION: Using the power of why to engage people in something compelling
The military is resolute on their why. It’s all about the mission to protect and defend the United States Constitution. Ask any service member why they fight, protect, or serve, and they will give you the same answer. According to Petraeus, stand-out leaders don’t dictate the tactics; they establish the mission, the direction and the boundaries.
Similarly, business-related research by EY found that leading organizations optimize the benefits of strategic planning by ensuring that the exercise is grounded in an organizational purpose to galvanize employees and create a case for action. The research found that enterprise-wide activation of purpose provides 900% more in shareholder returns over ten years in comparison to other S&P 500 firms. Furthermore, purpose-led companies outperformed the S&P by 500 times.
2. SIMPLICITY: The sole of efficiency
In the military, it’s essential to prepare clear, uncomplicated plans and concise orders to ensure thorough understanding. Petraeus explains that “simplicity is key; identifying the 3-5 big ideas is critical, and they must be easily understood, even if there are enormous details in the operationalization of the big ideas.” Simplicity contributes to successful operations. Simple plans and clear, concise orders minimize confusion. Other factors being equal, the most straightforward plan is preferable—allowing better understanding by troops at all levels.
This simple approach to strategy and planning is also wholly applicable in any business environment. Strategic leaders need to make several decisions every day as they plan for the future. Research firm Gartner explains that strategic plans need to remain clear, succinct and easy to understand if they are to be zeroed in on by employees without issue.
3. SITUATIONAL AWARENESS: Being conscious of surroundings and potential threats
Situational awareness is achieved after military planners have deliberately assessed an environment from various vantage points to ensure that all potential perspectives have been captured from the field of operation. According to Petraeus, “situational awareness is everything; military leaders who achieve that can feel a situation changing and understand what needs to be done.” Furthermore, the RAND Corporation specifies that one of the military’s central lessons is that operations are driven by a deep use and understanding of intelligence.
If you ask leaders in a company whom they feel their top five competitors are, what their competition is planning to do next, and what customers think about the competitor’s leading services, you’ll probably get various bootstrapped answers and inconsistencies. In contrast, a regularly delivered and in-depth intelligence assessment for the military focuses the entire organization on the competition, and their most likely next moves. Great intelligence understands what the competition is currently doing, what they will do next, and the most significant threats, so the entire organization can focus uniformly on ensuring that their plan succeeds.
4. SCENARIOS: Visualizing potential futures and developing strategies for each one
According to GP Strategies, the military learn to expect the unexpected. When most people think about the military, they believe that it’s all about the structure of following orders. While clearly you need to follow orders, most people never see that the military teaches you to think and act flexibly so that if your plan doesn’t work, you pivot immediately to a plan that does.
The U.S. military has a deep history of leveraging foresight, with defence planning scenarios continuously evolving, helping build flexible contingencies given the more uncertain and diverse threats faced. Petraeus adds, “the military is generally good at developing detailed plans for various contingencies, which can prove enormous value when one of those contingency situations materializes.” Furthermore, on strategic flexibility, he said, “there is almost always a need to refine the contingency plans in response to the specific circumstances that evolve; however, that is much easier than starting from scratch in the middle of a crisis.”
In business, strategic plans should be informed and stress-tested by well-thought-out scenarios. My new book, Disaster Proof, outlines how scenarios help challenge business leaders on potential, possible and probable risks, uncertainties and opportunities, building agility in the planning process. Good strategic plans incorporate a foundational core but elements that can adapt based on changing market conditions.
5. INTEGRATION: Bringing unity of effort among various organizational subsystems
In dealing with uncertainty, the U.S. military develops plans across several time horizons (short and long term). There is a clear separation between running current operations and planning future ones. In planning future operations, the role of the planning team is to coordinate and leverage expertise from the working groups in an integrated way. Petraeus adds, “tactical have to be nested within the operational and the operational within the strategic, and constant efforts to keep synched and aligned.”
A well-developed strategic plan in business also includes tightly integrated components of the business management cycle, including the strategy and long-term plan, the annual plan, business reporting and analysis from the front lines, budgets and the forecast. Integrating these subsystems makes each component work in concert with the others to tell a consistent story.
6. COMMUNICATION: The bridge between confusion and clarity
Effective leaders communicate to inspire. Wartime leaders know that communicating transmits vital information and strengthens resolve. Churchill mobilized the English language and sent it into battle during World War II. Napoleon sent pithy, frequent, rousing dispatches to the troops, building morale. Overdoing communication, however, can also be a problem, resulting in confusion rather than clarity.
According to Harvard Business School, the significant task for every business leader is to excel at communication. When thinking about the organization’s strategy and plan, whether it’s one-on-one meetings, emails, town halls, voicemails, or team meetings, a multi-channel approach to communication is essential.
In the military, Petraeus says, “communicating the big ideas is an effort and process that uses every possible medium and opportunity.” The primary goal is to help people see where the organization is headed and what they need to focus on to ensure it achieves its mission successfully. He adds, “you need to communicate with them effectively through the breadth and depth of the organization.” Furthermore, communication has to be done systematically and have a rhythm to it. Petraeus shared, “it’s not just down, and it’s also out and up.”
The parallels between the military and business are numerous. Ultimately when it comes to strategic planning approaches, you’re trying to get large groups of people marching in the same direction. There needs to be clarity regarding why, what, how and who. Introducing the analogies of the military into the business environment is complex. It may arouse emotions, but there is much to learn and share between these disciplines. As humans, we are almost unique in our ability to learn from the experience of others. However, too often, we seem disinclined to do so. Let’s challenge the norm as if our business depended on it.
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