August 14, 2006
Strategic Planning Will Not Predict the Future, But It Will Prepare the Law Firm for It
If you don’t believe in strategic planning, you must read Rob Millard’s post Creating Prepared Minds. His post includes an excerpt from an article by McKinsey & Co.’s Eric Beinhocker titled Creating Strategy in an Unknowable Universe.
Breinhocker gets it right. If you think strategic planning is about predicting the future, you are dead wrong. If that is why you are not doing it, you need to revisit the issue. Assumptions (predictions) are inaccurate. If you get one right, it is just the luck of the draw. The first rule of the planning process is that you must plan to change the plan. As the future gets closer, you continually change your expectations and reactions to it until you arrive on target.
Planning gets the entire law firm team playing from the same play book. It prepares the team for the future and capitalizes on its opportunities. Rob’s post is a must-read that may inspire you to read Beinhocker’s entire article.
Chance does favor the prepared mind. Top performing firms do it. If you want a good reason to start, consider this reason: more than an eight fold difference in per-partner income. A soon-to-be-published survey of midsized law firms by Juris, Inc. discloses that the top performing 25 percent of firms earn more than eight times the per-partner income of the bottom 25 percent. That seems to be a good enough reason to start.
Three important rules for successful planning include:
- The planning plan must be to change the plan. Strategies are temporary targets based on inaccurate assumptions and estimated capabilities.
- The planning document should consist of words and phrases to facilitate frequent updating.
- The structure is a critical part of the process.
The structure for the strategic portion of the planning process that I have successfully used includes nine main areas to be addressed by the planning team in the order listed. The nine subject areas are:
1. Nature of the law firm (or activity, e.g., practice area or department)
2. Environment in which firm operates
3. Opportunities/Capabilities (SWOT)
4. Assumptions about the future
5. Objectives–Mission/Strategic Thrust
6. Policies/Procedures (changes or new ones needed)
7. Strategies–How we are gong to achieve objectives
8. Priorities and schedules for programs, new resources required, measurements
9. Organization and delegation
For more step-by-step suggestions, reread the earlier post The Structure to Structured Planning. I also suggest a reread of Consensus Building for a discussion of the role of the structured planning process in building a consensus, i.e., preparing the mind to deal with an uncertain future in pursuit of a common vision.
Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.
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Filed under Planning by Tom Collins