Strategic planning is a highly visible and significant undertaking for management, so it is disturbing to read the statistics on their success. 80 - 85% of strategic planning efforts are deemed a failure by those the lead them, and that is an improvement. In recent years improvements have been won by focusing on how strategic plans are implemented. New software tools have been developed to embed strategic goals into operating plans and to provide greater visibility to what could be blocking success. These new management tools and practices will continue to support implementation, but what if your planning process produces a weak plan?
As strategic planning consultants, often we are sought out after management experiences an epic failure. From this vantage point, we have compiled three reasons why well-intended efforts produce such poor results. The three factors producing epic failures are incomplete strategy development, neglect, and getting outmaneuvered.
Incomplete Strategy Development.
We are all susceptible to the seduction of a great idea – especially when it is our idea! However, an idea, no matter how great, is not on its own a strategy. Too often planning processes set the expectation that strategy development is formed in a one day-annual planning meeting. Therefore, it is understandable when planning participants reach consensus on a new goal or set of goals after a few hours of discussion and think they have completed their strategic planning. They have only started.
<>Although it may be exciting and initially inspiring, to think one can make a magical leap into the future, none of us live in that fantasy land. Strategy development takes the patience and focus of a great craftsman. It needs to leverage the excitement generated when possibility and passion are fresh to set out the next steps in fleshing out the new ideas into a full strategy and then to detail how you might execute this strategy – your plan. A lack of understanding what strategy development is and how to lead that process is a major contributor to the high failure rates of strategic planning efforts.
To ensure your planning efforts are designed to complete strategy development make sure you have all four of these phases in your process:
Four Phases of Strategic Planning
Strategic Assessment: Conduct stakeholder interviews and surveys to gather the various perspectives of your stakeholders, compile data and analysis on your market, gather the most recent trends, and complete an evaluation of current business model and performance against current goals. Compile all of this into a briefing package and distribute before you conduct your first group meeting.
Strategy Creation: Schedule a multi-day (2-day minimum) planning session. Review and discuss your strategic assessment, then define or review your long-range vision, clarify the gap that you must close to move from where you are today to your vision. Then outline a high-level strategic direction and key initiatives (or big ideas) that need to be fleshed out to make that strategic direction a reality.
Initiative Development: This is the step where the big ideas or new concepts are fleshed out in greater detail and when plans are developed for them to be acted upon. Before a strategic plan can be approved, usually further research is needed to understand better how an organization could embrace and implement a new concept given their existing plans and priorities. Additionally, deeper analysis and a well thought out plan with costs, risks, timetable, and trade-offs will be required to make this initiative a success. These efforts are part of strategy development and are done by smaller Initiative Teams over a period of weeks (typically 6 – 8 weeks) directly after the Strategy Creation meeting.
Strategy Integration: Two to three months after the Strategy Creation session, the planning group reconvenes to hear the thinking developed by the Initiative Teams and to integrate the planning from all the teams into a New Strategic Direction. It is during this meeting where final trade-offs are made and where the phasing and staging of your strategic thinking occurs. You should also define immediate next steps in implementation and further cross-functional planning to guide how the new direction is ultimately embedded into operational priorities.
As you can tell, these steps require time and dedicated efforts to complete them. It takes senior team sponsorship to dedicate the resources needed for this effort. However, when this approach is used implementation risks are significantly mitigated, and there is far greater alignment of action to the plans set out in the strategic plan. Working towards these outcomes make managing the implementation of the direction less challenging.
Following this process will take you much further to developing and executing a successful new strategic plan. However, there are two other factors that you must combat. In the next article I will explain how, even after great efforts to complete strategy development, neglect from management can produce failing results.