Why Strategic Plans
And What to do About It
By Ron Price
For 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
marketplace, strategic planning helps company leaders maintain their
sanity and build a company based on the values that matter most to
strategic planning meant 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. 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, over fifty 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.
often results in a cynicism about the strategic planning process
throughout the organization, which further results in a lack of
accountability and a lack of ongoing clarity in terms of the
company’s strategy. So 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, not creative, and not innovative.
Why Strategic Plans
There are six reasons why most strategic plans fail.
1. 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 and over with.
Their energy is drained and now they’re in survival mode, which is
never a good mindset for strategic planning.
2. Lack of
Some people run out of energy or resources before they can get to a
practical plan. For example, one company got halfway through their
plan and then abandoned it. When asked why, they 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
3. Lack of
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. And while numbers are important, when they
dominate the planning process, they’re not being strategic.
4. Lack of
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. So 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.
5. Lack of follow
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.
6. Lack of
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.
Three Phases to
Successful Strategic Planning:
The key to making
strategic planning work is to think about it as being three distinct
1. 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 deliberately and
thoughtfully think about how to respond to those questions.
2. The second phase
is long-range planning.
Instead of being intuitive, it becomes very analytical. It’s about
understanding such things as 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. So it’s
very analytical and much more comparative.
3. 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 over commit 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
Create Your Future
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.
When you think about strategic planning in phases and as an ongoing
process rather than an event, you weave your strategy into the
organization’s culture. And that’s when progress really happens—when
your strategic, long-range, and operational planning are a normal
part of the way the business functions every day. Only then can your
company get the results that a successful strategic plan delivers.
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