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It’s a stretch: A leader’s guide to flexible strategic planning

Sounds like a plan ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 
Leading Off

Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities

More than 20 years ago, an executive told us that the annual strategic planning process at his organization resembled an exotic ritual put on for show. “No one is exactly sure why we do it, but there is an almost mystical hope that something good will come out of it.” By 2022, little had changed. “I have too often seen strategies that are actually a toxic mix of wishful thinking combined with a jumble of incoherent policies,” wrote the author of an article we published last year. To do what it’s supposed to do—advance an organization in the real world—strategy needs to be practical and dynamic, enabling leaders to remove obstacles to progress as they appear and solve problems on an ongoing basis. This flexible approach to strategic planning may involve broadening its traditional confines. This week, we explore some factors and trends to consider.
An image linking to the web page “The triple play: Growth, profit, and sustainability” on McKinsey.com.

Growth, profit, and sustainability—those are the three factors to include in a flexible strategic-planning model. Companies that offer better shareholder returns than their peers outperform on growth and profitability while improving sustainability and environmental, social, and governance (ESG) practices. These “triple outperformers” are more than twice as likely as their peers to grow revenue by more than 10 percent a year. If you’re not sure whether your organization can pull off this triple play, consider these five suggestions from McKinsey senior partner Lucy Pérez and colleagues. The strategies of top performers are decidedly not old school: for example, one software provider has created a user-friendly interactive tool that publicly tracks its progress on key ESG metrics, and a logistics company has developed innovative mechanisms to solve its customers’ supply chain challenges.
An image linking to the web page “The strategy leader’s evolving mandate” on McKinsey.com.

“What we know about volatility is that it’s a great time to be a strategist,” says McKinsey partner Emma Gibbs in an Inside the Strategy Room podcast. “You don’t need strategists when the world is smooth sailing.” An update of McKinsey research conducted ten years ago shows that the role of chief strategist has broadened considerably since then. “We’ve seen, in recent times, the rise of the ‘and’ strategist, which is, ‘I’m the chief strategist, and I also have another role,’” notes Gibbs. Ninety-one percent of respondents to our latest survey of strategy leaders say that besides strategy, they own other functions such as sustainability, digital, and data and analytics. “It’s not necessarily a bad thing that this is happening,” suggests Gibbs. “In many cases, I think it’s reflective of the breadth of topics that a strategist needs to consider as they think about the strategy.”
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Lead strategically.

— Edited by Rama Ramaswami, senior editor, New York

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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 01:06 - 21 Aug 2023