My first column on Managing Innovation & Growth addressed how to decide whether you and your company are committed to growth and, for those that are, how to begin the process by analyzing the current state of the business. You and your team should have more clarity and an emerging consensus on how the company is performing currently, including an honest discussion about:
- Best and worst opportunities for growth based on the past
- Misalignments and how to create new alignments
- People, particularly who is on the bus right now and who isn’t
- Core Values
Now it’s time to begin thinking about where you envision the business being in the future, possibly 10 years or more from today.
Dynamics of Current State & Future State Planning
The process of planning using the Current and Future States is one of many tools used in Value Stream Mapping, however I’ve found that this approach works remarkably well for strategic planning as well. In particular it works great for developing and managing an Innovation and Growth Plan.
Why? Because it forces you to be clear about the Current or Present State of your business from the beginning and then allows you and your team to think expansively about the future 10 years from now. Think of the Current and Future States as the bookends on your planning process, in this case with an emphasis on Innovation and Profitable Growth. By concentrating on these bookends, it’s much easier to identify the gaps that need to be addressed to achieve your business goals in the future. Step One was Understanding the Current State, and was the first part of this three part series.
Step Two: Envisioning the Future State
This process of envisioning the Future State has been around for as long as organizations have been developing long-range plans. It can be traced directly to military strategy from over 2,000 years ago (The Art of War, Sun Tzu) and more recently from the work of Jim Collins, particularly in his terrific book on business strategy: Good to Great. However, the process of actually describing the desired future can be perilous and loaded with dead ends, so I offer the following advice from my client experiences over the years.
This is not a word-smithing exercise, according to Jim Collins it’s really about picking the mountain you and your team intend to climb. It should include a really big goal, Collins calls this a BHAG (Big Hairy Audacious Goal), that will get and hopefully keep everyone’s attention. It should not be a “slam dunk” but a true stretch goal and one that is ultimately achievable. It’s the goal that counts not the rhetoric.
- First, gather your team again, as you did in Step One to Understand the Current State. This group should be your most senior managers, or in smaller firms the people you trust the most and depend on to directly manage the business. In family businesses, this will certainly be family members.
- Before the meeting, ask each person to envision and write a brief article on the Future State of the business 10 years from now.
- Then ask each person to pick 3 – 5 key statements or portions of their article and transform them into vivid descriptions about what the future will really be like.
- Write each of these on flip charts.
- Test #1: Now discuss and test each of these by answering the following questions about each one:
- Does the Vivid Description provide pictures and images of what it will be like to achieve your vision? IF THE VIVID DESCRIPTION DOES NOT CREATE A CLEAR PICTURE IN YOUR MIND’S EYE, THEN IT IS NOT VIVID ENOUGH.
- Does it use specific, concrete examples and analogies to bring the vision to life, rather than bland platitudes?
- Does it express passion, intensity, and emotion?
- When reading the vivid description, do you think, “Wow, it would be really fantastic to make all this happen. I would really want to be a part of that, and I’m willing to put out significant effort to realize this vision!”?
- Next, as a group write the statements that passed the first test on a flip chart, which will be your company’s Draft Vision and BHAG (Big Hairy Audacious Goal) for the company 10 years from now.
- Test #2: Now test your Vision and BHAG against the following questions:
- Is the Vision & BHAG easy to understand and clear?
- Does the Vision connect to your Current State, particularly with what you stand for as a company and do the best, or is it so tangental that it’s unrealistic?
- Do you think the Vision will inspire most of the people in the company?
- Is this Vision and BHAG really a stretch but ultimately achievable with hard work or is it so ambitious that no one will believe it can be achieved?
- Is your team really committed to this Vision and BHAG and ready to begin figuring out how to get going?