As I mentioned in last week’s blog post, strategic planning should be a significant undertaking. It is both a highly visible - taking management away from business management activities, and highly anticipated – bogging down productivity with questions of how it could change the status quo. With such high stakes, it is hard to believe that executives deem these efforts produce the desired results only 15% – 20% of the time.
As strategic planning consultants, we are hired when leadership decides to increase the effectiveness of their next planning efforts. As part of the strategic assessment, we investigate past planning efforts: what worked and where they fell short. From this analysis, we have compiled three reasons why well-intended planning efforts produce such poor results. The three factors producing epic failures are incomplete strategy development, neglect, and simply getting beat – competitively.
In my prior article, I explored the primary factor in these high failure rates: incomplete strategy development and I provided recommendations for combating this with a four-phased approach for strategic planning. In this article, I will go into some depth on my second factor: neglect.
To Thrive New Thinking Needs to be Protected while it Roots
In recent years we have seen the success rates for strategic planning improved from only 10% to 20% or more. New software tools provide support to embed strategic goals into operating plans and to allow greater visibility to what could be blocking success. Many larger companies have also formed dedicated teams or permanent functions to guide the implementation of cross-functional strategic goals. These new strategic management disciplines are very helpful, but they cannot translate the core thinking of a new strategic direction when faced with questions from line managers. They don’t address this failure point in the implementation process where all too often the status quo prevails, and the new direction dies.
When executive leadership hands over the implementation of the strategic plan to functional heads then wait for updates or formal reviews, they are neglecting their role as the interpreter and nurturer of the new thinking. Like a prolific gardener, young shoots need to be watched over, protected and cared for in the early stages of development. New thinking – especially strategic thinking that is completely different from the current business model and performance metrics – needs similar protection and stewardship while new thinking takes root and starts to thrive.
Neglect is not intentional; it often happens because of an abundance of confidence in the organization’s ability to succeed. Specifically, it happens because there is a high degree of confidence in the brilliance of strategies themselves or in the ability of the staff to understand and implement them. However, without the careful guidance from the architects of the new strategies, the goals are open to incorrect interpretations or only partially embraced in favor of maintaining the status quo.
Three Ways to Nurture the Transformation of Strategic Thinking and Avoid the Second Factor in Strategy Failure: Neglect
1. Include Strategy Integration in the Planning Process. Executives can avoid the neglect trap by including strategy integration as a part of the strategic planning process. Too often senior leadership believes their role is limited to creating the strategic direction; once the new plan is created and communicated, they step back and let their staff take hold of it and make it happen. This sounds right; it sounds like empowering the next level of management to fulfill their role unencumbered by senior management, but it is neglecting the deliberate negotiation of how to implement the new goals. When your process includes a Strategy Integration phase BEFORE the plan is approved, senior leadership can guide the prioritization of how the organization will embrace and act on your plan.
2. Sponsor cross-functional planning efforts. Planning is an iterative process, meaning you make a plan and then when you review it with those that have to help implement it, it is modified. Since the nature of a Strategic Plan is long-range and directional, the opportunities for changes are significant and natural. What you want to avoid are small changes to your vector early on that can result in shifting the course you intended to take. This is why we recommend deep strategy discussions lead by executives as cross-functional planning efforts are launched. In this way, the cross-functional team members can be deeply oriented to the new thinking and given the opportunity to question it and its implications for cross-functional priorities or shifts. Confirming the direction and elaborating on the reason for the new direction and clarifying what success would look like when achieved.
3. Monitor plan development. More than just scheduling regular updates, monitor means informal engagement from executive leadership with implementation planning. Executive team members should sit on a few meetings to hear how the thinking is evolving. They should ask questions when something sounds different than they were expecting. They will confirm that the plans, as they are evolving, will still achieve the goals set out in time and on budget. Executives should get early indications of obstacles or opportunities that may need to be discussed with others to ensure synergistic implementation. This may sound like I am suggesting executives usurp authority they have delegated, that is not what I am recommending. I recommend informally joining a few meetings while plans are forming to support their development and demonstrate commitment to shared success.
Taking these extra steps to go slow and stay in touch with the planning process through implementation does require more time and greater attention to planning activities long after the fun of generating new ideas, but it will increase the effectiveness of your strategic and implementation planning efforts.
Next, I will explore how sometimes epic strategy failure happens because your strategy got beat. It is a competition after all. However, even with the competitive nature of business strategy, you can take steps during strategy development to mitigate competitive risks and combat strategy failure.