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Weekly UpdatesFOR ANY BUSINESS, STRATEGIC PLANNING IS A necessity. It's the key to looking to the future and creating a direction intentionally as opposed to simply reacting to the marketplace on a daily basis. In today's fast-paced market-place, strategic planning helps company leaders maintain their sanity and build a company based on the values that matter most to them. By having a long-term view of why a company exists (mission), what matters most in the way business is conducted (values) and where the company wants to end up in five, 10 or 20 years (long-term objectives), an organization can maintain perspective while responding to the constant challenges and opportunities that rise and fall with increasing intensity in today's world.
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Historically, strategic planning meant going off-site for a few days once a year and laying out the company's goals and direction for the next 18 to 36 months. And most businesses, especially the larger ones, feel they need to engage in this exercise to get everyone on the same page. However, surveys show that most executives are dissatisfied with the results they get from that investment of time. In fact, more than 50 percent of executives say that they're unhappy with their strategic planning process right now. So while they think strategic planning is necessary, they don't fully realize the benefits they were hoping to attain from it.
Unfortunately, this often produces a cynicism about the strategic planning process throughout the organization, which further results in a lack of accountability and a lack of ongoing clarity about the company's strategy. What could be a dynamic exercise and have a big impact on the organization's future success becomes something that's simply tolerated. And when people feel as though they're just sitting through yet another boring and predictable meeting, they're not engaged, creative or innovative.
Facing failure
There are seven reasons why most strategic plans fail.
Lack of focus. 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. As a consequence, once they get to the actual plan creation and implementation, they're just trying to get it done. Their energy is drained and now they're in survival mode, which is never a good mindset for strategic planning.
Lack of energy or resources. Some people run out of energy or resources before they can get to a practical plan. For example, one company got halfway through its plan and then abandoned it. When asked why, representatives said that they spent their entire budget and ran out of money. So sometimes strategic planning doesn't work because the company hasn't done the right kind of allocation and alignment of resources for a comprehensive process.
Lack of understanding. Other people confuse strategic planning with operational planning. That is, 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 just a matter of establishing financial targets and budgets into the future rather than having a dynamic debate about the larger strategic issues that could be impacting the organization in the future. These people neglect what has changed since the last time they met, what's changing now and what might change in the future. They're stuck in the accountant's mindset. While numbers are important, when they dominate the planning process, they're not being strategic.
Lack of accountability. Sometimes the strategic planning process becomes too political. There's too much turf protecting. It becomes a time when people have to give reasons why their plan didn't work in the past. That's when the blame game starts and people become defensive. As a result, the group cannot deal with the real issues at hand. No matter what plan they come up with, they're not going to have the muscle to execute on that plan because the bigger issues are still pending. When the process becomes too political and too driven by special interest, then it breaks down.
Lack of follow-up. Many times strategic planning fails because even though the actual plan is complete, there's little or no follow-up to ensure that the plan is executed. They get the plan created and in a notebook, but they put it on the shelf and never look at it again. The plan never gets integrated throughout the organization.
Suffocating top-down 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 strategic planning. Instead, the planning has already taken place somewhere else and the event is a masquerade for strategic planning to give everyone marching orders. The plan announced may, in fact, be brilliant. However, the event should not be labeled "strategic planning," and 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 the circumstances change and the plan becomes obsolete. It may have been a great plan at the time it was created, but things change in the environment. The fact is that the strategy can be right today but wrong tomorrow because of external factors. So for a strategic plan to work, you have to somehow build into that process a mechanism for reviewing and adapting the plan as circumstances change.
Foreseeing success
The key to making strategic planning work is to think about it as being three distinct phases.
The first phase is intuitive thinking, and it has more of an emotional attachment to it. This first phase answers the bigger questions such as: Why are we in business? Who are our customers? What do they want from us? What do they get 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.
At the beginning of the strategic planning process, people need the opportunity to think deliberately and thoughtfully about how to respond to these questions. This kind of thinking cannot take place at the same time as operational planning. One involves the quest for a compelling vision of the distant future, while the other is focused on the struggles and frustrations of the immediate future.
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Strategic thinking is about thriving; operational planning is often about surviving. The moment operational planning is allowed to enter the conversation, strategic thinking suffers. No matter how easy it feels to travel the common route, these are the hours that must be consumed with following strategies less traveled. Originality and courage are highly recommended in this phase.
The second phase is long-range planning. Instead of being intuitive, it becomes very analytical. It's about 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. This phase is very analytical and much more comparative.
Mastering this phase of the process requires systems of data collection and analysis. Organizations that excel in long-range planning bring a depth and breadth of meaningful reports to the process. These stimulate ideological conflict, resulting in options, alternatives, best case, worse case, the utopian case and the most likely scenarios that are vigorously debated and then ranked for their likelihood of success in today's environment. These discussions also include a realization that a changing external environment will impact the effectiveness of both chosen and shelved possibilities.
The third phase is operational planning. This is when you get very practical and specific. Based on your intuition and your analysis, you now cover specific issues that you uncovered. During this phase it's a matter of understanding what you really have the bandwidth to do so you don't overcommit yourself.
For those things that you do commit to, now is the time to develop your plan for implementing and executing on those issues with excellence, which includes understanding who is responsible for what, what guidelines they're going to be functioning under, what resources they're going to have available to them and what milestones or review points you need to have along the way to make sure everyone is staying on schedule.
Similarly, you need to establish how you'll change as the external circumstances change, and establish a clear understanding of what the consequences will be of failure or success. Effectiveness in this phase includes creating a dashboard of key metrics in a variety of areas, such as customer satisfaction, operational efficiencies, financial measures and achieving new innovations in processes, products or people.
Create your future today
Realize that you can't work on all three planning phases at the same time. Each phase builds upon the last to give you the proper focus and mindset to make your strategic planning successful. Guidelines to energize strategic planning throughout the organizational calendar include the following:
1. Start and continually reinforce a commitment in strategic planning from the top. This includes a commitment from top management to be actively involved in the process, to draw out the input of others throughout the organization and not to default to back room discussions about the most important issues impacting the organization's future. (Many executives report that in spite of having a formalized strategic planning process, the most important strategies are developed separately because of other dysfunctions in organizational leadership.)
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