For too long, businesses have separated strategic planning from strategic execution—but they need both to succeed.
Nearly 60% of organizations struggle to bridge the gap between strategic planning and execution, according to a study by the Economist Intelligence Unit. For too long, businesses have separated strategic planning from strategic execution—but they need both. After all, we are rewarded based on the strategy we actually execute, not the one we planned to.
Often, executives neglect to bake execution into the very beginning of the strategic planning process. Here are three steps agency leaders can take now to help rectify this:
1) Expand the vision of strategy. Most agencies operate on a very narrow definition of strategy. Historically, they have focused their strategic planning efforts on incremental improvements to current offerings, not on fundamental new value creation. In a pre-COVID-19 world, with stable industries and in-person work environments, this made relative sense.
No longer. Our traditional ways of operating have been disrupted and clients and prospects are increasingly looking to their insurance agent to help them innovate their way out of the many existential threats they face.
Agencies should refocus their strategic planning efforts on innovation—the consistent execution of new value for stakeholders. Understood this way, insurance agencies become powerful engines of innovation because they often interact with a variety of stakeholders: clients, prospects and carriers.
What challenges are your stakeholders facing that you can help solve? That is a great place to begin any strategic innovation effort.
2) Engage your entire agency leadership in the strategy process. Strategic planning has tended to default to a small subset of core decision-makers. However, innovation is a team sport and often the bigger and more diverse the team the better. Insurance agencies can leverage their broad ecosystems to enhance their innovation outcomes.
3) Create phased milestones. Nearly 40% of projects fail due to a lack of clear goals and milestones, according to a PMI study. Strategic planning is not a one-time event. It is an iterative process and innovation strategy requires a precise balance between form and freedom.
A tried and true three-phased approach looks like this:
- Start broad and plant as many new ideas as possible.
- Grow those ideas by clustering and vetting them so that they are prioritized based on their attractiveness and executability.
- Harvest the top priorities through experimentation and adaptation. This is what makes strategic planning focused on new value creation fundamentally different than traditional strategic planning, which often moves from idea directly to execution. Now more than ever, insurance agencies and brokerages and their clients are dealing with significant unknowns. Experimentation is the fastest and cheapest way to reduce risk and ultimately deliver new value.
Closing the execution gap is not going to be easy. If innovation were easy, everyone would be doing it! But we must, and the rewards for doing so are substantial.
Drew Yancey, Ph.D., is a partner at InCite Performance Group. An expert in strategy and innovation, Yancey's career has spanned multiple industries as both an executive and advisor. He is passionate about helping insurance agencies and leaders work on the business so that they can thrive in it.