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Growth strategy | Advisory | Force multiplier

Planning tools

The VUCA Strategic Planning Framework

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“In preparing for battle I have always found that plans are useless, but planning is indispensable.” – General Dwight D. Eisenhower

The last six months have proven the traditional approach to strategic planning is no longer effective.

We do not live in a static or predictable world. If a VUCA environment – with all its disruption and unpredictability – is the new normal, then organizations need to adopt a strategic planning process that is more robust and agile.

Organizations today need strategic plans designed to handle the accelerating pace of change, extreme unpredictability, and widespread VUCA disruptions across the global economy.

The VUCA Strategic Planning framework helps leaders and their teams develop comprehensive, yet flexible, plans that help determine the future of their organization.

The Need for Flexibility and Agility

To succeed in this new era, organizations need to be flexible and agile. Leaders and their teams must get out of the building and maintain the discipline of a bias to action!

As a result, organizations must also be flexible in their strategic planning and agile in their execution.

Yes, it still requires that we define why the organization exists and what we do. However, it also demands that we constantly question every assumption about the business, the market, and the environment, and make quick decisions based on what we find.

Leaders and their teams must constantly ask the question: “What if?…”

Instead of driving the bus by looking through the rear-view mirror, this agile approach to strategic planning demands that we steer by looking through the front windshield. We need to focus – gazing not just at the road ahead, but also far into the horizon, to an unknown future – so that we can better anticipate what might be coming up and react appropriately to any disruptive forces or changes that might hit us.

This flexible approach to strategy is a key ingredient to successful execution.

VUCA Strategic Planning Framework – Overview

The graphic below provides a visual overview of the VUCA Strategic Planning Framework.

There are four core phases in the process:

  • Planning Foundation – Where we define the Core Ideology (Mission, Values, Purpose) of the organization, the Envisioned Future (Vision, Long-term goals), and the Strategic Gap that separates them.
  • Strategy Development – Where we formulate the go-forward Strategy, and make a go/no-go Strategy Decision.
  • Plan Creation – Where we develop the VUCA Plan, and do Scenario Planning.
  • Management Cycle – Where we add in the Strategy Portfolio, and leverage the Management Cycle for effective execution.

The foundation to every effective VUCA Plan is robust Situational Awareness. This continuous process happens throughout the four phases of strategic plan development and execution, and represented by the parallel work stream running the length of the process.

There are also four phases to situational awareness, matching each of the strategic planning phases:

  • Perceiving – This phase is all about gaining clarity on the “as is” status of the organization through internal analysis and an external analysis of the marketplace or economy.
  • Understanding –By taking information from the first phase and interpreting it through a new or existing mental model, or strategic framework, we can be begin to make sense of the connections between the elements and stress-test possible approaches to reach “future state”.
  • Predicting – After reviewing the information and insights from the first two phases, we can leverage this knowledge to project forward and begin to predict potential future impacts or outcomes. This is an important element for Scenario Planning.
  • Reacting – During the execution phase leaders and their teams in the field must observe, interpret, and react to all the inputs they receive from the market. This is where we must react to VUCA forces and make decisions about whether to proceed, pivot, or stop!

VUCA Strategic Planning Framework – Details

In the VUCA Strategic Planning framework, Core Ideology and Envisioned Future, combined with robust Situational Awareness detailing the current state of the organization and its operating environment, create the springboard for strategy development:

  • Core Ideology – Defining the mission, values, and purpose of the organization. These elements describe why the organization exists and what it stands for today. They form the “true North” guideposts for making strategic decisions and are the foundation for any VUCA strategic plan.
  • Envisioned Future – Defining a clear vision of what the organization aspires to become or achieve and its long-term goals. These elements explain the desired “future state” and the long-term goals you and your team are working towards achieving in order to get there.
  • Situational Awareness – A thorough analysis of the environment in which the organization operates is vital. Situational awareness involves knowing where you are (“current state”) and being aware of what is happening in your environment (internal and external perspective) to understand how information, external events, and one’s own actions might affect both immediate and future outcomes.

Once this planning foundation is in place, leaders should consider strategic options that will enable the organization to bridge the “gap” between the current state and the desired future state while factoring in the operating environment as revealed by the situational analysis. Strategy is the mechanism to do this:

  • Strategy – Defining the approach that will guide individuals and teams on “how” to achieve the short-term objectives that move the organization from its starting point towards achieving its long-term goals. Strategy plays a vital role in VUCA strategic planning.
  • Strategy Decision – Once formulated, leaders must then decide if the strategy is the best one to help the organization achieve its long-term goals. If the decision is to move ahead with executing a chosen strategy then it is time to commit, and proceed with creating a complete Strategic Plan around that strategy.

The strategic planning process culminates in the creation of a VUCA Strategic Plan:

  • VUCA Strategic Plan – A clear time and resource based plan, that details the strategy and actions by which the organization intends to reach its Envisioned Future. Clarity on objectives, owners, and timelines will help ensure successful execution.

In addition to their primary VUCA Strategic Plan, leadership teams should also take several additional steps to help mitigate the potential risk of disruption or failure:

  • Scenario Planning – Identify the potential VUCA impacts that could derail your primary strategy or impede your ability to achieve the defined objectives, and action plan your response to them. Because almost no plan goes as expected, by answering “what if” across a comprehensive set of possible future scenarios your team will be better prepared to quickly react and make decisions when/if a disruption happens.
  • Strategy Portfolio– Viable alternative, complementary, or even competing strategies that your organization will resource and your team will execute in addition to the primary strategy. Your Strategy Portfolio will develop from the strategy formulation phase, additional insights gained from situational awareness, and scenario planning that went into creating your VUCA Plan. This element mitigates risk and maximizes future opportunity for the organization.

In the final stage of the VUCA strategic planning process the focus shifts from planning to execution. It is now time for leaders to delegate the responsibility for taking action and manage the outcomes.

  • Management Cycle – A circular workflow, where individuals or teams do the work of executing the strategic plan, review progress, and make course-correction decisions. The leaders of the organization manage this on a regular cadence until the objectives are either achieved, changed, or deleted.

To Your Continued Success

So, there you have it – the VUCA Strategic Planning framework – a comprehensive and integrated approach to strategic planning in times of change and disruption. It was  expressly designed to help leaders and their teams deal with a VUCA environment, effectively plan the future of their organization, and take action.

This agile and flexible approach to strategic planning, and execution, is the key to success for any organization.

I am looking forward to sharing additional tools, techniques, and best practices for each stage of the process. I would also welcome any feedback or suggestions on the framework as you work with it. If you would like to talk about how best to create a VUCA Plan for your organization, please feel free to reach out.

To your continued success.

-Onward

What is Your Envisioned Future?

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“If you don’t know exactly where you’re going, how will you know when you get there?” – Steve Maraboli

In today’s disruptive VUCA (volatile, uncertain, complex, ambiguous) business environment it is critically important for organizations, teams, and individual contributors to have clarity on their vision of the future and what their long-term goals are.

This clear direction becomes a guiding beacon for building an effective VUCA strategic plan, one that clarifies your strategic intent and enables your organization to quickly make decisions and then take action in order to get there.

The Foundation for VUCA Strategic Planning

There are two foundational elements required effective VUCA strategic planning: Your core ideology and clarity around your envisioned future. Your long-term goals should be based on, and in alignment with, your mission, values, and purpose. Together these become the core ideology for your organization.

  • Core Ideology – defining the mission, values, and purpose of the organization. As a previous article explained, these elements describe why the organization exists and what it stands for. With this foundational framework you will have greater clarity when making critical business decisions that impact the future of your organization.

However, before any strategic VUCA planning can begin we must also have clarity around the envisioned future state of the organization:

  • Envisioned Future – defining a clear vision for what the organization aspires to become or achieve, and your long-term goals. These elements explain the desired future state of the organization, and the long-term goals you and your team are working towards achieving in order to get there.

Defining Your Envisioned Future: Vision and Goals

Articulating the envisioned future of your organization has two main components: a vision statement, and long-term goals:

  • Vision – Your vision statement defines what the organization aspires to become or achieve. Based on the current status of your organization, an effective vision will articulate where you want to take your organization in the future. Because of this future focus, your vision statement often sounds much different from what the organization is today (mission statement).

A specific and compelling vision statement can and should help drive decisions and goal setting. This description of what the desired future state looks can be extremely powerful for strategic planning because it provides inspiration and direction, and a focal point for the mission statement and an overall goal or destination for the organization. A clear vision will also help to identify and define potential strategies; and clarify what is within or outside of the organization’s limits.

  • Goals – The goals for your organization are brief, clear statements of significant outcomes to be accomplished within a longer timeframe, typically 3-5 years. A goal is defined with a broad, general, tangible, and descriptive statement – It does not say how to do something, but rather what the singular end-result will look like.

Goals are sometimes described as outcome statements that define what an organization is trying to accomplish both programmatically and organizationally. Some common examples of business goals are, grow profitability, maximize net income, improve customer loyalty, increase market share, etc. Note the brevity of these statements.

Goals are critical to your company’s success. Ultimately, your organization’s goals need to align with your vision, and support your mission, values and purpose. Together this planning foundation will propel each team member’s individual actions and decisions.

Goals Versus Objectives – What’s the Difference?

Business consultants love to develop complex models and invent proprietary terminology for each element of their frameworks. Strategic planning practitioners are no different. This often creates unnecessary confusion.

My bias is to keep things simple, defaulting to the most commonly used terms and definitions, and in the process hopefully making it easier to understand and adopt the VUCA strategic planning framework I’m proposing.

It has been my experience that most organizations, both large and small, public or private, do not understand the difference between a goal and an objective. As a result, they do not effectively communicate them to their teams. This has obvious negative ramifications when you think about the lost opportunity to cascade goals and objectives, and gain buy in, throughout an organization.

Here’s an explanation of the difference between goals and objectives to make sure there is no confusion or ambiguity when it comes to your long-term and short-term plans.

  • A goal is a broad and long-term desired result you want to achieve. You might use company goals to inform yearly strategies and guide the direction of all your efforts.
  • An objective, on the other hand, defines the specific, measurable actions individual employees or teams must take to achieve the overall goal. It is at the objective level that the ownership of the strategic plan shifts from organizational leaders to teams and individuals. This is where the actual work gets done!
  • A goal is where you want to be, and objectives are the steps taken to reach the goal.

Timeframe-based View of Vision, Goals, Objectives

In strategic planning, all the elements need to fit together, and build from one to the next. In other words, your vision statement should inform your goals, which should then inform your objectives. To eliminate any lingering confusion about the differences between vision, goals, and objectives, here’s another way to look at it. Since all strategic plans are time-based, that becomes the key differentiator between these sometimes contradictory and synonymous terms.

  • Vision – this is an aspirational statement that is not time-bounded. In fact, your vision may never actually be attained, but rather serves as an imagined picture of the future.
  • Goals – these are broader and longer-term, typically 2-5 years in timeframe. Your strategic VUCA plan will undoubtedly have several goals.
  • Objectives – the short-term, tactical action items to be accomplished within the next 12-24 months max. Each of your goals will have multiple objectives behind them, and they become a key component of the organization’s VUCA plan. Much more on that topic in future articles!

Next Step Towards Creating a VUCA Plan

In summary, your mission statement focuses on the present, and clarifies what the organization does and for whom. Your values define the core beliefs and provide moral guidance for the organization, becoming the operating system that determines how you get there. While your purpose defines “your why” to provide market-facing clarity on the value you deliver to your constituents.

Defining this core ideology for your organization creates a solid foundation and starting place for overall strategic planning to begin. It comes to life when you combine it with your envisioned future, to articulate a vision for what the organization aspires to become or achieve, and then defining your long-term goals in order to get there.

Organizations achieve their goals by creating strategic plans, within which they define the strategy, and key objectives the team must accomplish. Many organizations struggle with setting up actionable objectives. Next time I’ll share a methodology that I have successfully used for years – the SMARTER framework for setting objectives that get done.

-Onward