Have you ever gone through a strategic planning exercise and thought, well, this is about
the dumbest thing and the biggest waste of time I can ever imagine.
Well if so, show this episode is for you, as we tackle the question, why do strategic plans fail?
I'm Randy Pennington.
Welcome back and thanks for joining me to talk about business at the intersection of
today and tomorrow.
You know, strategic planning is one of those activities that really draws mixed reviews.
Lots of organizations do them and unfortunately, some groups do so simply because they think
they're supposed to have a strategic plan.
And just know that if you are looking for an investor or a loan, you will probably be
asked for your strategic plan.
Then there are groups who point to the pace of change and disruption and say that strategic
planning, especially a one, two, or even a three- year plan is absolutely useless today.
Well, I've worked with lots of organizations to develop their strategic plans over the
years.
So obviously, I'm a little biased.
I really like what General Dwight Eisenhower said, plans are useless but planning is everything.
You see, even back in World War II when change didn't happen anywhere close to the pace it
does today, General Eisenhower knew that battlefield conditions could change very quickly.
And the problem isn't that strategic plans are inherently bad, it's that we continue
to do things to make them more likely to fail.
Here are six reasons why your strategic plans could fail, and then a few ideas on how to
overcome them.
One, you're creating a to do list of tactics rather than establishing a strategy.
This is a common and easy trap.
Here's the difference – to do lists are tactical assignments and you will get to them
at some point in your planning process, but just not right out of the gate.
Your strategy, on the other hand, is the method or plan you intend to use to bring about a
desired long-term result.
So increasing customer engagement and referrals is a possible long-term strategy for increasing
revenue.
Calling every past customer two times per quarter to check in, well, that's a tactic.
At the highest level strategy looks at how you win in the marketplace.
Michael Porter, for instance, developed three generic strategies for competing way back
in the 1980s: cost leadership, differentiation, and focus.
There are a number of different models out there, including the Delta Model and the Balanced
Scorecard.
Every consultant has their favorite, and we'll talk about them in more detail in the next
episode.
Just remember that strategic thinking is about longer term, bigger picture questions and
problems.
Tactics without a strategy, create confusion.
Two, you focus more on staying true to the model, than using it as a process to guide
and frame the discussion.
This is an extension of the last reason for failure.
There are some organizations and consultants that become so locked in on following their
chosen process that they miss the importance of thinking and planning strategically.
I once saw a board of directors of a national industry association go into a total meltdown
because of a disagreement over the strategic framework.
Likewise, a small business owner found it really helpful not to use any model but to
simply talk about how they defined a win for his company and how he wanted to get there.
In the end, the discussion is more important than the forum for the model that you use.
Three, you don't tell yourselves the truth about the environment and your performance.
Jack Welch had a saying when he was CEO of GE. He said that a lot of corporate planning
meetings are nothing more than a group of people getting into a room and selling hats
to each other.
In other words, everyone tells each other exactly what they want to hear or want to
believe, rather than the truth.
And if you view the episode on characteristics of a great culture, you know that valuing
candor and honesty is an essential element.
Now from a planning perspective, candor and honesty means being completely honest about
your strengths, weaknesses, opportunities, and threats.
My experience is that the majority of the things listed as strength are basically subjective
analysis, not fact.
Your competitors probably have the same words on their list as you do.
And if you say that you have no weaknesses, opportunities or threats, well then, you're
lying to yourself or you're just being lazy.
Either way, bad information leads to bad plans.
Four, you never look at your plan again once it's developed.
I'll never forget the day I asked a client to see a copy of the strategic plan and they
actually pointed to a three-inch binder they were using as a doorstop in their office.
It’s a common joke in many organizations that plans are developed, placed on the shelf
and then never used again.
Many of my clients these days are reviewing and updating their strategies at least quarterly.
It's an evergreen document that tracks performance, evaluates progress and updates the current
realities based on the latest data.
And if you aren't looking at your plan at least several times per year, you're relying
on luck and good memory to achieve results.
Five, you never use the plan to guide priorities, performance indicators, and budgets.
On a personal level, your calendar and your credit card statement show your true priorities.
You can set a goal that says you want to be healthier.
But if your calendar never includes workouts and the top three entries on your credit card
statements are pizza, ice cream and fast food, I know what results you're going to achieve.
It's the same for your organization, you can set a strategy that says you'll compete on
product quality or customer relationships or whatever you choose.
But if your budget doesn't reflect that your plans simply won't work.
You should be able to see your strategy at every budget line, key performance indicator,
and departmental goal.
Six, the plan is only based on what's important from the top and doesn't consider what's possible
in the trenches.
I've been in lots of planning sessions over the years where the group making the plans
didn't think their job was over until there wasn't a single blank space left on the wall
to hang another piece of flip chart paper.
That's why every planning session I conduct these days ends in a discussion about the
organization's capacity to take on more.
And it's not that the new strategies and goals aren't important, it's just that sometimes
people will need to have some things taken off their plate to have the capacity to add
the important stuff you want to do going forward.
Not considering what's possible means that your plan will get less attention than it
needs to succeed.
The next episode, we'll share our quick and dirty framework for creating a strategic plan
plus give you even more tips on creating a plan that helps you deliver results.
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Thanks for watching!
We're here to give you strategies and tools you need to succeed both today and tomorrow.
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ideas and questions.
And remember the heroes in every marketplace are known by their results.
We'll see you next time.