It is nearing the end of the year, and some organisations may be reflecting on recent performance and wondering how they strayed so far from their strategic plan. What happened? But, typical five-year strategic planning forecasts are about as accurate as throwing darts, blindfolded. Too often, strategic plans are anything but strategic. The challenge is to create a plan that actually works.
How can you accurately forecast in increasingly unpredictable times? By not doing what so many organisations do—making a plan based on instinct. Going with your gut is the worst way to craft a path forward for the next three to five years. It nearly guarantees that you will fall victim to cognitive bias—dangerous judgment errors that can trap you on the wrong course. For instance, you may resort to planning fallacy, where you assume everything will go according to plan; or optimism bias, where you are sure the future will be brighter; or sunken costs, where, despite red flags and mounting expenses, you wind up throwing more money at projects that you really should terminate instead.
When the time comes to gather everyone in a room and create a strategic plan, avoid such traps by following these 10 steps:
Establish scope and strategic goals.
Determine the scope and strategic goals of the activity you will evaluate. Determine a clear timeline—from six months to five years—but consider this: the longer the timeline, the more forecasting deteriorates and the harder it is to reach concrete goals. If you have a longer time horizon, then be sure to include additional resources, flexibility, and resilience.
This story is from the December 2019 edition of Indian Management.
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This story is from the December 2019 edition of Indian Management.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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