Strategizing and Planning

Strategizing/planning problems derive from the inherent human bias to action.  People tend to start with tactics, (the thing you do to impose your strategic vision) before they have fully developed their strategy. This form of carelessness can destroy your financial plan or in the very best cases, leave it needlessly ineffective and inefficient.

Strategy includes defining purpose, timing, participants, limits, change, resources and so on.  It also includes making policy choices, (things we must do or won’t do) choosing priorities and developing some sort of a tie breaking mechanism for when there are conflicting parts or a scarcity of resources.  Capital budgeting techniques for example.

Most of all, it attempts to raise awareness about the space in which knowledge is incomplete.  Absent knowledge of your environment, inherent risk goes up.

The general process is:

Priorities/policies -> strategy  ->  tactics  ->  execution  -> review/revise.

Tactics first usually is weak because inadequately developed strategy makes inappropriate tactical choices easier.  Unfocused.  How can you decide the best way to get some place when you have not defined what or where that is?  Worse, it permits tactics that look good to be chosen even though they have no connection to known strategic goals.  The result.  “We are hopelessly lost but making good time.”

Tactics however are the only way to define strategy as good or bad.  The trick is to find out quickly where you are.  Have a look here.

The third step is implementation – logistics.  We know where we are going and given that, we have selected what we believe is the best method to get there.  Now let’s do it.

Doing things automatically exposes new information and connections.  Adaptation is required.  Adaptation involves reselecting or refining tactics or perhaps improving communications with the doing level.  Even sometimes rethinking the “What are we doing (supposed to do) question.”

Good answers evolve.

Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.

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