How HP Can Help You Create a More Strategic Plan This Year

The vast majority of “strategic plans” aren’t very strategic. They’re simply tactical plans dressed up with the phrase, “strategic,” in front of them. In other words, most of the “strategic” plans I read from companies (before working with them :-), are simply a redressing of their previous year’s plan, just “a little bit better.”

But that’s not strategy. Strategy isn’t based on what happened in the past—nor on what’s happening in the present. Strategy is based on the future. It’s based on who (or what) you want to be. And who you want to be may not be at all who you are today. That’s where HP comes in.

Now, I don’t’ have inside information on how HP came to its decisions last week. But, as a strategy consultant, I can surely appreciate the boldness of their moves.

Think about these facts.

1. HP bought Palm for $1.8B for the Palm OS/webOS to power new devices they wanted to make (like the HP TouchPad)
2. HP is the number one producer of PCs on the planet at 20% for Q2 of 2011

So, what did HP do last week? Did they say, “Hey, we’ve invested billions in this HP Touchpad, we’ve got to keep moving forward with this!” Or, “Hey, we’re the number one producer of PCs on the planet, we need to keep taking market share!”

No! But most companies would have.

Instead, HP took what we in the strategy business refer to as a “strategic right turn.” They looked at the future and said, “Who we’ve been is not who we’re going to be. So, let’s kill this tablet now (remember sunk costs are sunk—not an argument for further losses). And let’s sell off our lower margin PC business (even though we’re #1 in the world) and pursue other higher margin business that will be more profitable in the future.”

That takes guts. Now, whether they made the right decision or not, history will tell. But that’s irrelevant to today’s post.

What is relevant is that HP showed all of us what strategic work is about. It’s NOT about taking last year’s plan and doing a little bit better. It’s about taking a look at who you want to be and then making some strategic right turns so that you’re at the right place before the market gets there.

Fast Company posted an infographic today that is/was perfect for this point. It’s an infographic about the death of the music industry by looking at a set of pie charts about how consumers have consumed music since 1981. Here are some highlights (though you should watch it here >>).

1981 = 59% LPs
1990 = 58% Cassettes
2000 = 92% CDs
2010 = 46% Downloads in various forms

Pick your decade. If you weren’t projecting ahead and making strategic right turns, you’d be left in the dust with LPs or cassettes or CDs.

What gets you ahead of the curve is to do what HP did and make bold strategic decisions. If you don’t want to be a Borders or Blockbuster or Circuit City or ______, make sure that you and your top team do real strategy work this year.

In fact, my recommendation to you is that you don’t even pick up last year’s plan until you’ve done some strategic work. First assess where the world and your market are moving and how you want to position yourself in the future. Then, and only then, take a look at last year’s plan. By doing this you can’t simply do last year “a little bit better.”

Don’t be tactical. Be strategic. Be bold. Take strategic right turns. Stop doing some of the things you’ve been doing in the past. Dare to be different. And get ahead of the market.

To your accelerated success!

P.S. If you need help with your strategic planning process this year, make sure you contact me. It would be an honor and privilege to help you get where you want to go.

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