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Strategic Planning: It’s Not a Paint By Numbers Process


Is there a typical, common format for companies to use for a strategic planning process?

There are countless books, articles, and volumes of research in the public domain about strategic planning.  With so much of this information out there and available, why do many leadership teams often struggle with ‘the planning process’?  Why do some companies become Stuck in the Moment?

One of the core services McHugh & Company delivers is a strategic and operational planning process.  I am often asked:

  • Can you describe your typical strategic planning process? Answer: No
  • Do you have a canned, step-by-step methodology you use for all your strategic planning projects? Answer: No
  • How long will it take to develop a strategic plan? Answer: It depends
  • What are the deliverables from a strategic planning process? Answer: It depends

Strategic planning ≠ a paint by the numbers exercise.

The design of an effective and custom strategic planning process depends on a number of factors:

A. the stage of the company’s development

  1. startup
  2. emerging growth
  3. mature, established operating in a stable industry (are there any of those anymore?)
  4. in decline
  5. in crisis (aka ‘challenged’)
  6. stuck

B. the company’s history of planning

  1. some companies are diligent about doing it – they have a proven process and refresh the plans annually.  It is an expected part of the corporate ‘routine’
  2. others have an irregular or random process…skipping a year or two…or three
  3. early stage companies may even ‘plan’ more frequently due to the rapidly changing nature of the business – one company we worked with had a rolling quarterly plan that was detailed for 2 quarters and had less clarity for the second 6 months. It was updated every quarter.
  4. never been done

C. the openness of the company’s culture

  1. a small team dictates direction
  2. desire to involve the board, senior and middle management

D.  the exit intentions of the majority shareholders

  1. short term only (i.e. we want to exit)
  2. no time restrictions – do what’s best for the long term interests of the business

E. existence of conflict within leadership 

  1. shareholders in disarray; fighting about everything
  2. healthy disagreements over direction
  3. apathy

F. senior management’s level of understanding of the current business model

  1. vague: they try to explain it, but really can’t describe it accurately or clearly
  2. outdated: they describe the business reasonably well, but the facts are wrong or outdated;their portrayal is not what really exists today
  3. factually correct, but…: they present it well and factually, but intuitively don’t understand how unnecessary complexity is hurting the overall organization
  4. they get it

G. the overall financial condition and capital structure

  1. access to equity capital
  2. openness to outside capital
  3. bank borrowing availability
  4. profitability and cash flow

Some of you will say many of these conditions don’t matter; the different situations shouldn’t impact the planning process design. Some professionals argue that a standard, non-custom approach works just fine for various size companies in different stages of growth.

To be sure, there are basic steps that should be done no matter what the combination of scenarios. Examples of these would be the ever present SWOT, industry analysis, competitor analysis, customer interviews, and value chain analysis.

Links to three McHugh & Company case studies are presented below. Each of these cases highlight a very unique set of company needs, strategic planning scenarios, and OUTCOME/DELIVERABLES.

Case Study One – Mature stable manufacturing company: history of random planning; open culture; long term outlook; no desire for outside equity; good bank relations; marginal profitability. Company wanted to “gain alignment and a shared understanding” on “who are we (as a company) and where do we need to go” (i.e. sort through the current issues/opportunities, establish a future direction).

Case Study Two – Emerging Growth Company: no formal planning; small team dictates direction; long term focus; healthy disagreements over direction; business model understood; open to outside equity; cash tight. Company clearly expressed the need to change the fundamental business model.

Case Study Three – Mature, stuck family owned manufacturer: annual planning process (updates); family dictates direction; long term outlook; some conflict; outdated perception of business model; ok balance sheet. This company was Stuck in the Fog and needed to restructure the overall business.

Do you do regular planning? What is your situation? What type of strategic planning format would work best for your company?