A professional golfer and his caddie study a golf course prior to the start of a tournament. They collect important information in order to make better decisions and to prepare strategies for how they will play the course. In a similar way, a professional executive will proactively prepare for strategy formulation before making important strategy decisions.
A good strategic planning process, one that creates compelling strategies that will deliver a sustainable competitive advantage, is informed by a thorough analysis of all relevant business conditions. What is our financial position? How efficient are our operations? What markets are we competing in and what do we know about the competition? What assets/competencies do we have that others don't? Doing this analysis isn't about making strategy decisions -- that comes later in the process. The purpose of Analysis is understanding the present and what's possible in the future. Analysis is really about generating the 3I's:
- Intelligence: the facts that matter about our organization and the markets we serve
- Insight: bringing clarity and understanding to things that have been confusing
- Ideas: options, considerations, changes, investments... brainstorming what could be
Doing 3I Analysis takes time, skills and commitment. Consider the golfer and his caddie -- the caddie walks the golf course ahead of first round to gather the facts like yardage, green slopes and pin placement. This intelligence lays the groundwork for data driven decision making. Next, a caddie might develop insight such as "on hole seventeen, the bunker looks like it's in play but it won't be as long as you hit a driver." Finally, they might brainstorm ideas on how the golfer will play the hole if the wind is blowing hard or if he's trailing by a stroke on the last day of the tournament. No professional golfer would play a tournament without doing the essential preparation of gathering intelligence, developing insight and brainstorming ideas on how to win.
If your organization is playing to win, invest the resources required to generate intelligence, insight and ideas about your business and the markets you serve. Avoid the temptation to jump straight into a strategic planning exercise before you have taken the time to complete valuable analysis. This will prove an essential step in the strategic planning work ahead.
Feel free to reach out if you have specific questions with regards to this blog.