A modernized approach from our perspective
by Otto Acuña N – Managing Director – EXYGE Consulting – December 2024
2024 has been a year of great uncertainties and changes at the geopolitical, technological, and business levels which are making it difficult for organizations to plan ahead in the medium and long term. A significant percentage of what is done today when doing planning is focused on the short term: budgets, annual goals, financial environment and exchange rate, fiscal and competitor pressures, etc. However, it is our view that not enough effort is devoted to thinking beyond that, to the fundamental changes we need to make in the next 5 to 10 years.
In a business environment of constant change and uncertainty, such as today’s, annual strategic planning sometimes needs to be reviewed 2 or 3 times per year, so there is a temptation to think that thinking long-term is useless, or at least unproductive. In the midst of so much uncertainty, re-forcasting, and severe changes from one week to the next, defining what we should look like in the longer term is necessary more than ever, as it means the difference between “reacting every quarter” to the changes we see, regardless of the direction it takes, and “adjusting course to react appropriately to current conditions, since our final destination is X”. The difference is not trivial.
From EXYGE, we recommend CEOs and business owners to approach their strategy exercises with an integrative and technical perspective, short-term tactics, within a long-term strategic context, adapting classic and modern methodologies to their specific contexts.
In this Technical Note for Executives, we wanted to return to this topic that we had already addressed several years ago, in previous publications, expanding the traditional approach to strategic planning (based on M.Porter’s premises), integrating contemporary techniques such as Hoshin Kanri, or Jim Collins’ data-driven approach and digital transformation issues that should be part of any Board’s Agenda in 2025, but not with pretty rhetoric, but with actionable objectives aligned with the daily work of the company and what needs to be achieved next year.
The true value of strategy lies in the process
The Purpose of Strategic Planning
Beyond obtaining a planning document, the true value of the strategy lies in the process followed to arrive at it. It encourages organizational alignment, the structuring of ideas and the generation of consensus around a shared vision that will provide governance during the execution of the plan. In today’s competitive market, organizations that skip this strategic step risk becoming mere bystanders, reacting to change rather than leading it.
A few days ago, the market intelligence firm Source Global, called by some “the Gartner of the consulting industry” concluded a study for the third quarter of 2024 on the global concerns of consulting clients: companies. 39% of respondents indicated that they feel that their competitors are moving faster than them and 37% indicated that their business ambitions exceeded their technological capabilities. Issues such as the uncertainty of the economic environment or the lack of talent or the right skills were far below in the ranking of concerns.
Source: https://www.sourceglobalresearch.com/blog-post/anticipation-a-critical-capability-for-2025
Interestingly, this same study also asked about the consulting service providers that usually help address these types of concerns:
Source: https://www.sourceglobalresearch.com/blog-post/anticipation-a-critical-capability-for-2025
A whopping 43% indicated that they feel little empathy from their service provider towards the issues that concern them and almost 41% indicated that the consultants’ “chatter” has nothing to do with the problems or objectives that are important to them. Our sister company in Estonia will soon write about this last part of the study [e-consulting .solutions] that helps consulting companies not to incur on what the study describes happen to them.
For now, we will focus this article on the first part of these results.
Classic and Modern Strategic Methodologies
So, whatever your strategic goals and future vision are and if the path is as important as the destination when we talk about strategic planning, it is very relevant for you as a business leader to know what paths exist and to think if all of them will “lead to Rome”. Let’s start by listing the classic approaches and the more modern ones.
Classic Approaches
- SWOT Analysis: Identifies strengths, weaknesses, opportunities, and threats to assess the internal and external environment. Almost any executive has gone through a SWOT exercise in college or later in their business career.
- BCG Matrix: Prioritize investments based on the lifecycle and profitability of products or services.
- Ansoff Matrix: It facilitates the evaluation of growth opportunities in products and markets.
- 5 Porter’s Forces: It examines competitiveness in the industry, helping to make informed strategic decisions.
 | There is a lot of information about these four approaches, courses, youtubes and technical notes regarding their use, although almost everything that is published has a monocular approach: it explains and promotes each technique in an exclusive way. |
Modern Approaches
- Lean and Agile Planning: It incorporates principles of iteration, adaptation, and waste reduction, making the process a continuous practice along the same lines that the Deming Cycle promotes “plan, do, check, and act” and that those familiar with the “agile” concept of project management will recognize it.
- Design Thinking: Focused on innovation, it fosters creative and practical solutions to strategic challenges.
- Scenario Planning: Design strategies for different possible futures, anticipating uncertainties.
- Hoshin Kanri: A Tool for Operational Planning. This approach connects strategic vision with day-to-day execution. Through clear objectives and methodologies of “cascading” 1 and monitoring (going down and connecting the more general and conceptual strategic objectives to more operational objectives and closer to the day-to-day of its employees), Hoshin Kanri ensures that all levels of the organization work together towards common goals. The key is to implement an iterative exchange between leaders and their teams, ensuring alignment between levels, commitment and clarity.
All the models described above, classic and modern, were designed from theoretical conceptualization, by academics from prominent universities, famous consulting firms or companies that coined a method that they used internally, without statistical rigor or empirical data. Most of these schools of strategic thinking promote a protocol that must be followed to walk a series of steps that will lead the company to address its key questions and get answers to them.
Hybrid and Data-Assisted Approaches
Two additional approaches to strategic planning that were built differently deserved to be mentioned. We will begin with the approach proposed by Jim Collins, a well-known academic and consultant. The surprising thing about Collins’ approach is that it did not began as a methodology, it really started with his academic research to understand why some companies endure and survive the disruptive events of their time and why others, similar and even better equipped than the first, succumbed, went bankrupt or simply the same strategy did not work as it did for its successful twin.
Jim Collins initiated a statistical, numerical and empirical study with public companies (being public, there is a lot of data available for analysis and correlations) to identify patterns or reasons why the same strategies serve some but not others. Through more than 100 years of business history, large volumes of data, and empirical research with the leaders of both types of companies (those that have lasted more than 100 years and those that fell by the wayside), “good practices” and ways of planning actions forward (the “strategy”) that seem to have worked across multiple companies were identified. generations of leaders and industries. Collins’s books reveal specific patterns for business conduct that seem to have passed the test of time. Whether you’re going to use one of these techniques for your strategic planning or not, Jim Collins’ books are recommended reading for any business leader.
Too much growth too fast can kill an organization
The second non-traditional approach I want to mention is that of Verne Harnish, known by his book on “Gazelles”, companies that grow at an exponential rate. Harnish is really a methodological “orchestrator” who takes parts from various methodologies, including Jim Collins’, and promotes a method that is 1) simplified and 2) very practical.
Is it a theory of strategic planning? Not really, it’s a collage of concepts and techniques from others, aligned in a way that seems to make sense to those who want to accelerate their growth in a major way (10X or higher). Of course, in the face of such a challenging proposal, a first question arises: Is it in your strategy to grow? And if so, how much?…..
Too much growth too fast can kill an organization, leading it to a disruption that it can’t handle or whose market it can’t support. Therefore, as I indicated at the beginning, strategic planning is not only about defining what the key priorities and objectives are for the organization, it is about choosing the path by which those goals will be reached and the speed at which this route will be traveled, accelerating and stepping on the brakes at the right moments.
Planning and strategy is the “art” of asking the right questions and taking the right time to answer them in a way that the organization and its leaders reach consensus on priorities and next actions.
Digital Transformation as a Strategic Pillar
Digital transformation is a concept that many talk about but few understand. In the context of strategic planning, it should help leaders answer fundamental questions:
What do we want to transform into? How will we look or how will we act differently once we have digitally transformed?
Many don’t really know and if you don’t know where you want to go, it’s difficult to choose the right path or manage the march to get there. The execution of a digital transformation strategy has an enormous amount of technical details, complexity and minutiae whose main danger for the organization is that it makes it lose the general perspective, “the big picture” of why we are doing all this for…… What do we want to transform into?
Strategic planning is not a grandiloquent exercise of poorly defined concepts that is difficult to visualize in the day-to-day operation
Our way of looking at strategic planning for 2025
At EXYGE, we promote a practical approach, contextualized in the issues that really concern companies. I would like to reveal some of the insights of a recent survey by the intelligence firm Source Global:
- 39% of respondents indicated that they feel their competitors are moving faster than them
- 37% indicated that their entrepreneurial ambitions exceeded their technological capabilities.
If this were the case, it would be necessary to define operationally, for the company in question, what it means to “move faster than them”, Does it imply acquiring customers more effectively? Or in new ways that the customer didn’t expect? Would it mean to make the logistics with suppliers or carriers more efficient? What processes or capabilities need to be faster?
The second point, continuing with our example, has to do with putting numbers on our business ambitions. Sometimes, even when objectives are set, the operational goal – the number – might not be exactly defined: How fast are our competitors? How fast are we? How much is the gap between the two? And how much faster do I have to be to compete with them?
Strategic planning is not a grandiloquent exercise or a loosely defined concept that is difficult to visualize in the day-to-day operation. It must be brutally practical, and in our view, must cover three key areas:
Forward: Customer-Focused
- Customer Journey Transformed: Design memorable experiences, if they are digital, they must be fluid and integrated, from the first interaction to the post-sale.
- Automated and Omnichannel: Adopt tools that are as integrated as possible, even though there is no such things as a “silver bullet.” Some paths that can take you down that route are omnichannel CRMs and e-commerce to improve customer interaction, although it will depend on your industry, type of product or service, level of sophistication of your customer and other factors.
Inward: Internal Improvements
- Digitalization of Processes: Automate administrative flows with technologies that maximize the work that adds value to your company: generative AI, purpose-built AI, process mining, digital twins, key metrics or data to make decisions, BPM or RPA, everything will depend on what makes sense for your company and the questions you have answered in the previous section.
- Internal Collaboration: Implement digital communication platforms for distributed or remote teams, strengthening efficiency, accountability, staff engagement and engagement.
Looking Backwards: Relationship with Suppliers
- Digital Supply Chain Management: Optimize purchasing, product catalogs, and supplier management using analytics and automation tools. Improve the technical methodology by which you manage the supply chain and land good practices in practical procedures and policies.
- Process Standardization: It facilitates transparency and efficiency in interaction with suppliers.
Recommendations for CEOs and Business Owners
- Adopt an Integrated View: Combine classic methodologies with modern approaches and digital tools.
- Prioritize Execution: A solid strategy must be executable: the “orchestration” of the whole set is its most important organizational competency.
- Implement a Digital Transformation Roadmap: Clarify goals and prioritize investments in technologies aligned with internal processes, customer experience, and supplier relationships.
….., no consultant should, nor it can, substitute the dynamics of what need to happen internally – you need that clarity INTERNALLY for things to happen.
Final Words
At EXYGE Consulting, we understand that every company faces unique and particular challenges from its industry, competing clients, and other factors. Our experience of more than 25 years supporting companies to make their strategic objectives a reality (at EXYGE, we support implementation until the last mile of execution, ensuring that the strategy does not just remain on paper).
We are experts in Backoffice Operations, with a portfolio of more than 140 projects in organizational design, process improvement and digital transformation, which positions us as a strategic partner to support you with these initiatives.
However, strategic planning and its execution are a matter of the organization’s leading team, where no consultant should, nor can, replace the dynamics that need to occur internally for things to happen. I hope this technical note has helped you to reflect and think about your own planning process and how to carry it out in the best possible manner.
May 2025 bring you clear priorities, alignment among your key staff, and detailed plans for each level of the organization to contribute into your vision for the coming year….. Do you know what you want to transform into?
Footnotes:
- “Cascading” is a correct derivatives of “cascade”. It is used in the field of business management to denote the staggered and hierarchical transmission of information from the top to the bases of an organization. However, it is preferable and with a more transparent meaning “communicate in cascade”, which is documented in the specialized literature, together with other options such as “transmit/transmission/disseminate”. View http://ow.ly/abud30rTzWO ↩︎
Additional resources:
- Dossier EXYGE.COM with previous experience in planning and addressing this issue
- Related Services:
- Practical Guide to Strategic and Operational Planning for Executives ( Booklet 56 pp) – Register below
