Tactical thinking is planning on how to deal with the day-to-day. Strategic thinking is the long-term play.
The problem is people get too bogged down managing their way out of more immediate problems, so there's very little constructive downtime available to think strategically. Does this sound familiar to you?
"Money's tight so we have to do more with less. That typically means I'm overheating my IT staff, some changes are slipping through without due process and things are breaking. My mid-level managers are trying their hardest to figure out ways to deal with today's emergencies. Following proper process isn't always something that's visible, but being behind schedule definitely is. We're encouraging people to cut corners they shouldn't."
As this scenario shows, it’s all too easy to fall into a tactical rut. However, IT departments can’t afford to lose focus on delivering strategic value to the organization in today’s business environment.
IT leaders need to take a long-term view of how their services enhance business outcomes. That’s where ITSM comes into play.
Move from Thinking about Products to Process
As an IT leader, you need to keep one thought in mind – ITSM is not about how to use a particular software or the technical details of your current systems. Instead, ITSM focuses on processes; and therefore, it may be more helpful to consider it similar in nature to other process improvement efforts you might be more familiar with such as TQM or Six Sigma. So, ITSM reviews and measures IT activities and functions in relation to business processes and needs.
Measuring Business Value
Because the end-focus is on how well IT contributes to business strategy, the metrics often used to evaluate IT are also based in business. And so, IT leaders need to learn to think in business terms.
Take your cue from whatever is driving your company’s executives - because those are the business outcomes you’ll be measured by. Does your company want to develop innovative products? Increase customer retention? Enter a new market?
IT Scorecard
Whatever the business goal, there are standard ways to measure how well IT contributes to those efforts. Forrester has identified five metrics for IT performance:
- investment alignment to business strategy
- business value of IT investments
- IT spend ratio
- critical business service availability
- operational performance
The Long-term View : Linking Technology and Business
As the metrics indicate, ITSM – like business - takes a long-term view. And that’s the point. Value is created over time.
I’m not saying stop dealing with everyday issues – the quality and reliability of IT services will always be important. But efficiency and effectiveness alone don’t help a business grow.
IT leaders need to make time to look at how your department contributes to enterprise goals. If you don’t, IT will be seen as only a cost center, and not a value creator.
Do you know what your organization’s strategy is? How much time do you dedicate to developing that strategy each month?
If your answers are on the low side, you’re not alone. According to research outlined in the Harvard Business Review, 85 percent of executive leadership teams spend less than one hour per month discussing strategy, and 50 percent spend no time at all. The research also reveals that, on average, 95 percent of a company’s employees don’t understand its strategy.
It’s no wonder, then, that 90 percent of businesses fail to meet their strategic targets. Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable.
Here’s a look at what strategic planning is and how it can benefit your organization.
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What Is Strategic Planning?
Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization’s goals, and ensure those goals are backed by data and sound reasoning.
It’s important to highlight that strategic planning is an ongoing process—not a one-time meeting. In the online course Disruptive Strategy, Harvard Business School Professor Clayton Christensen notes that in a study of HBS graduates who started businesses, 93 percent of those with successful strategies evolved and pivoted away from their original strategic plans.
“Most people think of strategy as an event, but that’s not the way the world works,” Christensen says. “When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry.”
Strategic planning requires time, effort, and continual reassessment. Given the proper attention, it can set your business on the right track. Here are three benefits of strategic planning.
Related: 4 Ways to Develop Your Strategic Thinking Skills
Benefits of Strategic Planning
1. Create One, Forward-Focused Vision
Strategy touches every employee and serves as an actionable way to reach your company’s goals.
One significant benefit of strategic planning is that it creates a single, forward-focused vision that can align your company and its shareholders. By making everyone aware of your company’s goals, how and why those goals were chosen, and what they can do to help reach them, you can create an increased sense of responsibility throughout your organization.
This can also have trickle-down effects. For instance, if a manager isn’t clear on your organization’s strategy or the reasoning used to craft it, they could make decisions on a team level that counteract its efforts. With one vision to unite around, everyone at your organization can act with a broader strategy in mind.
2. Draw Attention to Biases and Flaws in Reasoning
The decisions you make come with inherent bias. Taking part in the strategic planning process forces you to examine and explain why you’re making each decision and back it up with data, projections, or case studies, thus combatting your cognitive biases.
A few examples of cognitive biases are:
- The recency effect: The tendency to select the option presented most recently because it’s fresh in your mind
- Occam’s razor bias: The tendency to assume the most obvious decision to be the best decision
- Inertia bias: The tendency to select options that allow you to think, feel, and act in familiar ways
One cognitive bias that may be more difficult to catch in the act is confirmation bias. When seeking to validate a particular viewpoint, it's the tendency to only pay attention to information that supports that viewpoint.
If you’re crafting a strategic plan for your organization and know which strategy you prefer, enlist others with differing views and opinions to help look for information that either proves or disproves the idea.
Combating biases in strategic decision-making requires effort and dedication from your entire team, and it can make your organization’s strategy that much stronger.
Related: 3 Group Decision-Making Techniques for Success
3. Track Progress Based on Strategic Goals
Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company’s larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs).
By planning your company’s strategy and defining its goals, KPIs can be determined at the organizational level. These goals can then be extended to business units, departments, teams, and individuals. This ensures that every level of your organization is aligned and can positively impact your business’s KPIs and performance.
It’s important to remember that even though your strategy might be far-reaching and structured, it must remain agile. As Christensen asserts in Disruptive Strategy, a business’s strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pivot your KPIs as goals shift and communicate the reasons for change to your organization.
Improve Your Strategic Planning Skills
Strategic planning can benefit your organization’s vision, execution, and progress toward goals. If strategic planning is a skill you’d like to improve, online courses can provide the knowledge and techniques needed to lead your team and organization.
Strategy courses can range from primers on key concepts (such as Economics for Managers), to deep-dives on strategy frameworks (such as Disruptive Strategy), to coursework designed to help you strategize for a specific organizational goal (such as Sustainable Business Strategy).
Learning how to craft an effective, compelling strategic plan can enable you to not only invest in your career but provide lasting value to your organization.
Do you want to formulate winning strategies for your organization? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.