Images: Courtesy of Music Philosophy (Mico, you rock!)

Strategic Planning was born around 100 years ago when the first cars went into mass production: The lack of product was vast and the economic landscape easy to oversee, making it easy for companies to adjust to changes immediately. Markets were slow and people believed humans can achieve anything, supported by Strategic Planning. This mechanical view of the economy and an enterprise left the role of Strategic Planning almost untouched and its importance has even grown over time.

Problem is: The world enterprises operate in has dramatically changed. In a world of saturated markets, educated people playing their consumer role rather unwillingly, globalization, terror attacks, ash clouds, etc. Strategic Planning becomes a farcical endeavor. Maneuvering an enterprise has become an illusion. But we continue to plan.

Strategic Planning is a waste of time

Successful companies are highly flexible and adaptable in an ever-changing world and market. That’s the opposite of a plan: focusing on getting something done in a certain amount of time.

Let’s just have a look at the US government: Every year they plan on paying down the debt – and every year they face  new surprises: high unemployment rate, a Supreme Court decision, an oil spill. Immediately, all the Strategic Planning is out the door and projections have to be adjusted. Planning is not forward-looking, Planning is static and reactive.

Same is true for enterprises: The performance of a company is more often than  not influenced by factors out of their influence sphere: price of commodities change, currencies fluctuate or a banal law changes somewhere in the world and affects the performance of the enterprise – once again, projections have nothing to do with reality. This results in permanent frustration. And, companies develop the tendency to find someone to blame: Purchasing, Sales, Product.

Anyone who still hopes to control the future with numbers has no clue how markets work nowadays, doesn’t know how you can get optimal performance out of all stakeholders or just lives in a perfect world, fueled by selfish wishes and hopes.

Executives don’t like change

The idea that executives don’t maneuver the enterprise through the stormy seas (Actually, it’s the other way around.) doesn’t fit in their MBA-fueled pipedreams of being the sole savior of this struggling ship. A myth born in the Industrial Age. In addition, executives believe they need Strategic Planning to control their employees. At its core, most managers believe their employees are lazy bums that can’t be trusted. (Honestly, without me they just wouldn’t do anything all day.) For that reason, employees need to get clear goals and constant observation.

Peter Drucker’s Management by Objectives (MBO) gave executives more fodder for their bizarre prejudice that people without objectives have no clue what to do. People wouldn’t work efficiently without planning goals. This resulted in an enterprise world gone crazy: Increase revenue by 13%, reduce costs by 12%, service has to increase their number by 10% for the next 5 years. Totally absurd. We call it: Management.

Shift power from executives to all stakeholders

This absurdity we call management has to be replaced with a new paradigm:

• Focus on relative goals
• Empower your employees by trusting them 100% and allow them to react individually to demands of stakeholders
• Focus on culture

Don’t stick to numeric goals: Would you want a NASCAR driver to win a race or plan for him to drive the race in 2 hours and 32 minutes? Foster a culture where it’s about winning not making numbers.

If a department/division/branch has problems, don’t let the executives take over. Stakeholders have to find their own way out of the mess and don’t need the savior from headquarter. This might leave the executives with less opportunities to congratulate themselves but will increase team morale dramatically. The role of leadership has to be be redefined: It’s not about controlling people. That breeds resentments. And crushes spirits.

It’s about inspiring people. Engaging them. Executives need to lead, not control.

Redefine enterprise success

Executives have to throw away their outdated Org charts, their hierarchy thinking and the focus on their selfish goals. The new enterprise places stakeholders on the pedestal, makes humans not plans their focus. Once you place your trust in all your stakeholders and empower them, goals like shareholder value, executive salaries and bonuses will fall into place.

Enterprises need less goals, not more. Goals are overrated. Real success metrics are an organic byproduct of a real corporate identity. It shouldn’t be about corporate goals determined by a few, it should be about corporate identity lived each and every day by all stakeholders. Focusing on corporate culture will help enterprises to develop a congruent group of like-minded people. Forget the performance review. Lean on peer pressure as the guiding force.

Strategic Planning vs Being Prepared

Strategic Planning means: Derived out of an executive vision of the future and assessment of the present, the company develops a plan that everybody has to follow blindly. Enterprises based on this belief try to manage the future.

Being Prepared means: We’re trying to be ready for any eventualities, we prepare, we’re staying intellectually fit, always question everything – never separate acting from thinking. Being prepared is an attitude. This attitude will allow companies to be successful in the future. Strategic Planning dooms them.

Strategy has its roots in the military. Even the military doesn’t need mindless warriors anymore

The idea of Strategic Planning was based on the thought construct that there are two kinds of people: The thinkers, the directors, the controllers. And the mindless workers that do their task and don’t ask questions. Strategy is a tool to keep the doers from thinking and under tight control.

Since the markets control enterprises more efficiently than managers, what’s the value of managers hiding behind strategy decks anymore? Instead, every stakeholder has to think, adjust and do. What company still can afford to employ non-thinking people, happily entrenched in operations? That’s what automization is for.

Perpetual Test Mode

Enterprises need to ask themselves constantly “How could I do this better?” even when everything works out fine right now. Once enterprises believe they’ve found the perfect model, they will switch into the mode “Why change anything?” And die.

Enterprises need to follow two paths:

• Implement perpetual, incremental improvements. Why not improving a dozen of little things? Can you improve your website daily outside of the yearly refresh? Can you change the way customer service interacts with people? Are your key employees fully invested on Social Media Channels, always ready to reply? How can you move your company from good service to utter delight?
• Think big: Some problems can’t be solved with incremental changes. They need significant innovations. How can you leap ahead of your competitors by rethinking how a problem can be solved?

How to begin the transformation process

This is an unusual paradigm for enterprises. Everything they learned in business schools and on wooden conference tables is useless. Even more: counter-productive.

It behooves every employee to internalize this new world view. And start to develop multiple pilot projects or beta programs. A good first step would be to eliminate the yearly performance reviews and axe yearly planning.

Let’s face it: the world was not meant to be perfect and nobody can control it. We’re supposed to muddle along and work our way through challenges and problems. Once enterprises accept this fact, they have a chance to succeed in the future. Most importantly: As long as managers don’t trust all stakeholder, as long as they don’t believe people will work without control and incentives, just because they want to, as long as managers don’t change their thinking, enterprises will remain the places of outdated hierarchy, intellectual imprisonment and planned economy.

I met with an SVP of a software company the other day. Our discussion revolved around how his job could be made easier.

I spoke with him about some of the activities that he needed to perform. I then asked for some other areas that were required that he could self identify as being total wastes of time as well as adding no value to the customer. (He was in a sales and business development function, and by his own admission, being customer facing was his most pressing objective.)

He identified a meeting tracking tool as being the bane of his existence. My response,”Tell Me More.”

He went on to say that this tool was mandated by the board, no it was not Saleforce, I asked, and that it was a total waste of time for his entire team. I wondered why as this guy seemed like he was no enemy of tech and he acted like he wished he was using Salesforce.

I asked how he used this internal “tool.” His response was that there is a requirement that each salesperson have a meeting each day and a proposal each week. This tool is where this data is recorded. If the salesperson is tracking at a lesser rate on this activity, there is an alert posited by flashing a red light next to the salesperson’s name. The SVP said that he logs in each day, and if any of his reports are glowing red, then he needs to do something. Otherwise, he logs out and goes on with his day, trying to delight customers.

Of course, this system is not intuitive and requires detailed input, so it will take a few hours of work each week by each salesperson- and from their boss the only reason is so that the light does not flash red. (They still forecast with a spreadsheet- this is merely an activity measurement tool.)

Are you serious? I should mention that the salespeople are all senior with at least 10 years of experience.

I could attack this process on a number of levels, but I will say this. If you treat your people as cogs, some will start acting like easily replaceable parts in your system. By that I mean this kind of “management” will drive good employees away and you will be left with the duds, who are happy to meet their job requirements by entering meaningless data.

How will that grow your business? Companies need to start treating their employees like living, breathing people. If your focus is like this towards your employees, I wonder how they treat their customers?

The B2B playbook is well known: B2B don’t focus on selling specific products, they are mostly focused on listening to customers and meeting their needs. Let’s say you are selling Cloud Computing. You have to identify first why a customer would like to switch: Lower computer and/or software costs, improved performance, improved document format compatibility, unlimited capacity, increased data reliability. In addition, sales people need to identify why customers might be hesitant to make the switch: Reliability, specific location of data is unknown, personal identifiable information can be distorted and a switch might disrupt the organization for a specific time. These insights allow you to organize your enterprise and sales organization based on customer needs, fostering long-term relationships by promoting whichever of the company’s products the customers values most at this moment in time.

Compare this customer focus to the current B2C landscape: Most companies still use the top-down method to develop products: Develop a new product based on (often) flawed customer research, such as focus groups or surveys. Hand the new product over to the marketing department which identifies segments to target, sets the price and promotions and develops the communication plan. The whole organization is set up to push products out, transact as much as possible. A short-term strategy that is showing decline in performance due to the need of consumers to develop relationships with brands.

Instead, brand have to focus on building lifetime value by humanizing the brand-people relationship and create a culture (followed by structure) to execute this new strategy.

One of the major changes in human relationship organizations is the elimination of the CMO position and transferring all responsibilities to the Chief Customer Officer. Forrester’s briefing titled “Customer Experience thrives with executive leadership” found that “firms with these leaders view customer experience as more important, have more enterprisewide customer experience efforts, report having fewer obstacles, do more primary customer research, and score better in all three areas of Experience-Based Differentiation.” Executive stewardship is imperative to implement the next steps:

• Move CRM out of IT and into the customer department.
• Use market research throughout the organization to improve customer lifetime value. As an example, R&D needs to work directly with people to develop products that answer emerging needs.
• Sales and Marketing should be merged into one division, reporting to the new Customer Division. Sales needs to step up and help marketing develop communications because they are closer to the ground and understand what consumers desire.
• Let your best sales people (your greatest fans) in and collaborate with them throughout the product development process.
• Suppliers and other stakeholders should not deal primarily with procurement, they are customers as well and should be treated as that.
• Develop new metrics that focus less on short-term goals and more on customer profitability and lifetime value. Extend these new metrics to financial reporting, helping the markets to understand that stock prices should reflect this new model. Focus on market share should be replaced by focus on customer equity value.

Transforming an organization to focus more on customers is a challenging task. However, continuing on the current path is not an option. Unless brands consider extinction an option.

This is my daughter. Look at her. There’s this aura of infinite possibilities – she’s ready to take on the world. Nothing will stand in her way to explore this world that’s hers. We all used to be like that. We all had this fire in our eyes. Each morning we couldn’t wait to get out of bed, ready to make this world our world. We were curious. Eager. Had so many questions. Tried things out. Fell down. Tried them again.

And then life happened to us. Or better, institutions stood in our way. Pre-school. Kindergarden. Norms. Criticism. Homework. Schedules. School. Cruel teachers. Critical teachers. Grades. Norms. The system integrated us. We integrated the system into our lives. Into our thinking. And being. We graduated. When we were lucky, we traveled for a while. Found that joyful life experience again. But now it was time to join the workforce. To fit in. To accept mediocrity. Suddenly, it’s hard to get out of bed in the morning. Weekends and vacations are the only remaining highlights. We are slowly killing off everything that made us happy and curious in the first place.

Hold on, we just got a second chance.

The Great Recession is the biggest opportunity we will encounter in our lives. The Great Recession equals major hardship for many people but it also marks the end of the corporate era. If you’re corporate drone, your job will be eliminated very soon. If you try to fit in to make it in this world, you will struggle for the rest of your life. In order to succeed, you have to become an artist.

That’s the premise of Seth Godin’s newest book “Linchpin – Are you indispensable?” We have to become more human, creative and generous to be seen as unique and irreplaceable. And, most importantly, we have to ship. Meaning, we have to produce. Not spending hours on email trafficking, Twitter scanning, blog commenting. No, shipping. Producing. Doing. We can either give in to the lizard brain, the little part of your brain that is concerned with survival and is the reason for your procrastination and all your irrational fears. Or we can create our own destiny. Our own reality. And, at the same time, change the world.

Seth Godin’s Linchpin might be the most important book you’ve read in a long time. Hopefully, it will change you and your thinking. We’ve been working with major Fortune 100 corporations for years, even decades. We understand how tough it is to implement cultural change. But, it’s necessary. Actually, it’s imperative. Would you rather help your company change or see it vanish?

Seth Godin’s Linchpin and Hugh McLeod’s Evil plans (he illustrated Linchpin because he’s one) will give you the motivation and desire to change the world. We started our company with the goal to help transform businesses and change the way we work and live. Seth Godin distilled our thoughts in a neat and exciting package. Now it’s your turn to take the ball and change the world. We hope you’re ready.