This post originally appeared on Entrepreneur.com - #Growing Your Business
Relevancy testing and a close eye on the competition can stimulate this essential process.
4 min read
Opinions expressed by Entrepreneur contributors are their own.
Strategic planning is a polarizing term. For some people, it’s cringeworthy, conjuring up images of long meetings that are driven more by outdated process than by purpose. I’ve been there myself; I remember one particularly painful strategic-planning session that consisted of two days of irrelevant data analysis and concluded in a few documents that were never referenced again.
With experiences like this, it’s easy to see why strategic planning gets a bad name — and why business leaders avoid it like a tax audit. But now is the worst time it to dodge it. How people travel, work, live, shop and communicate changes more frequently and significantly now than at any other point in modern history, and that means you don’t have five years to respond and adapt. You might not even have one year.
The constant evolution of today’s consumer and marketplace means it’s critical you pay attention to what’s going on outside of your organization, industry and geography. If you want to build a business that lasts forever, strategic planning — specifically, external analysis — must become an ongoing, agile process.
Related: 5 Actionable Strategic-Planning Tips
Here’s the good news: Analyzing your external environment doesn’t have to be miserable. Let’s reframe the process. At its core, reviewing your external environment is a practice in relevancy testing during times of change. It gives you an opportunity to assess if you’ll be consumable by, connected with and valuable to cultures and consumers in the future. Rather than using the outdated strategic planning models that aren’t serving you, and put your leadership team to sleep, practice relevancy testing instead. Here’s how you do it in four steps.
1. Look at competitive business models
And not just the ones in your industry. DoorDash and Shipt applied Uber’s model to transform how people eat, even though the transportation, grocery and restaurant industries are all very different. Other major market shifts — virtualizing healthcare, digitizing financial transactions, emphasizing sustainability and the environment — may soon impact your business. While it’s impossible to know what the world will look like five years from now, it’s important to recognize and analyze trends to prepare for what’s coming your way.
2. Select the ones that are relevant to you
After you’ve gathered a collection of trends, determine which ones are relevant to you and your customers, and which aren’t worthy of further analysis. Organize that list by speed of change; although driverless cars may make a big impact in the future, they’re not coming as fast as other shifts. Place emphasis on that’s happening now or soon.
3. Visualize adopting a new model
With this new perspective, ask yourself and your team: “If we were opening our doors for the first time tomorrow, what would we look like?” This question allows you to eliminate creative restrictions and think outside of what currently exists. One day at Iams, Clay Mathile gathered us into a conference room and told us our biggest competitor had expanded into grocery. Our task was to determine how to respond. We didn’t know at the time that it wasn’t true; the exercise was designed to implore us to look at our business with a new lens — and it worked.
Related: 5 Steps to Create a 1-Page Strategic Plan
4. Review competitive materials
When’s the last time you looked at your competitors’s websites to analyze their positioning? Create a habit of understanding how your competitors are changing and what they’re bringing to the table so you can continue to add value and differentiate your business.
Last year at Summit, Aileron’s annual two-day community gathering, Entrepreneur Editor-in-Chief Jason Feifer spoke to us about bicycles, specifically how many people in the media alleged the invention was doomed for failure and would never be adopted by society at large. Society, as we know, had other plans. This anecdote sheds light on an eternal truth: Change is inevitable, no matter how hard we push against it or how little we plan for it.
As leaders, it’s our responsibility to recognize the inevitability of change and embrace it rather than remaining ignorant. Regardless of the path we choose, change will happen, and we can choose to either be its champion or its prey.
