For any business, strategic planning is a necessity. It's the key to proactively planning for the future, as opposed to simply reacting to the marketplace. For many companies, strategic planning means going offsite for a few days once a year and laying out the company's goals and direction for the next eighteen to thirty-six months.
Surveys reveal that most executives are dissatisfied with the business results they get from formal strategic planning. Many employees, including those in management, believe that significant strategy decisions are made outside of the formal discipline of strategic planning. Unfortunately, this often results in a cynicism about strategic planning throughout the organization as well as inconsistencies in accountability and clarity regarding the company's future direction.
Why Strategic Plans Fail
There Are Seven Reasons Why Most Strategic Plans Fail:
- Lack Of Focus. Too often, people get lost in the semantics of defining their vision, mission, and values. They spend so much time and effort trying to understand what those terms mean and how they fit together that by the time they have it all figured out, they're mentally fatigued and the planning process stalls.
- Lack Of Resources. Some companies run out resources before they can devise a practical plan. They budget a set amount of time and money for the process and when this is spent, the process stops advancing.
- Lack of understanding. People confuse strategic planning with operational planning. They focus on financial numbers, looking at what the numbers were for the past three years and then extrapolating from that. As a result, the planning becomes a matter of establishing financial targets and budgets into the future rather than having a dynamic debate about the larger strategic issues that are critical to the organization's success.
- Lack of accountability. Sometimes the strategic planning process becomes too political, impeded by turf or budget protectionism. As a result, the group cannot deal with the real issues at hand.
- Lack Of Follow Up. Once a plan has been created, no progress can be made if the plan is simply put into a binder and left on a shelf to collect dust.
- Suffocating Management Styles. When a strategic planning session is simply an opportunity for the CEO or some other powerful leader to give a "state of the union" speech and pass along the new edicts, it isn't really strategic planning. The planning has already taken place somewhere else. In today's increasingly complex marketplace, a strategic plan created by one person is probably lacking the depth of expertise, insight, and review required for success.
- Lack of Flexibility. Finally, strategic plans don't work because when circumstances change the plan becomes obsolete. Strategy that's just right today can be so wrong tomorrow because of external factors.
Three Steps to Successful Strategic Planning
The key to making strategic planning work is to think about it as being three distinct phases of an ongoing process:
- "Intuitive thinking." This step answers the bigger questions such as, "Why are we in business?" "Who are our customers?" "What do they want from us?" "What matters most to us?" "What are the values that we want to drive the way we do our business?" "Where do we see our company going in the future?" These are big picture, intuitive, and often emotionally loaded questions.
- Long-Range Planning. This phase is very analytical and more comparative. It involves understanding where your company fits in the marketplace, what your strengths are as an organization, where your limitations are, and how you relate to customers and competitors. It also includes understanding the regulatory environment, where technology is taking you, and how major trends affect you.
- Operational Planning. During this phase it's a matter of determining what you really have to do so you don't over commit yourself. Now is the time to get practical with a plan for implementing and executing on specific priorities. That includes understanding who is responsible for what, developing appropriate guidelines, figuring out what resources they're going to have available to them, and what milestones or review points you need along the way to make sure everyone remains accountable and stays on schedule.
Create the Future Today
You can't work on all three strategic planning phases at the same time. Each step builds upon the last to provide the proper focus and mind set that will ultimately lead to success implementation.
When you think about strategic planning as an ongoing process rather than an event, the strategy becomes woven into the organization's culture. And that's when progress really happens, when strategic thinking, long-range, and operational planning become a normal part of the way the business functions every day.
By Ron Price / AMANET
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