How To Avoid Business Strategies That Fail!
Do you struggle with strategic planning? Do your plans fail to achieve your desired effects? Well, you are not alone -- learn my planning approach.
During World War II, Winston Churchill said, “Failing to plan is planning to fail.” In fact, there are many different types of plans. Strategic and business plans we often relate to professional business organizations. Campaign plans might form a picture in the mind of a massive military campaign, like D-Day, or something like a political election campaign. At the tactical level, operational plans define quarterly and annual actions required by a company. At their roots, all plans focus on the same thing; conducting gap analysis and closing the gap.
At its most basic form, planning is nothing more than figuring out how you will get from one place to another. Every day people plan: people make a list of things to buy at the grocery store; workers determine the best route to travel to and from work each day; we plan out how to finance that new car; etc. Strategic planning usually applies to the development of an overarching organizational plan on how the business will get from where they are today to their vision many years in the future, or at least the general direction they will head over the next several years.
To understand the importance of strategic planning, we must understand the impact without it. The value of strategic planning is all about time. When you compress time in planning — only thinking a few weeks or months out — operational costs escalate exponentially because of last-minute actions and constant rework based on poorly made quick decisions. Strategic planning essentially gets you ahead of time and thus saves the organization money in the long run. Traditionally, organizations that fail to have solid long-term plans spend at least 25% more than those with good plans.
FORTUNE Magazine published the article “Why CEOs Fail,” which stated that, “70% of all strategies fail to achieve their desired results and 30% fail to achieve anything at all.” Many organizations dislike strategic planning because it is additional work — work that takes away from their day-to-day issues. It also can be difficult to examine the “long war,” when one is focused on the “knife fight.” Planning, specifically strategic planning, tends to fail for many reasons. These reasons can be grouped into five specific categories that lead to a structured and systematic process of planning to ensure success. These five categories are:
1. Executable Focus.
2. Strategic Framework.
3. Traceable Implementation.
4. Rigor and Accountability.
Regardless if you satisfy all of these five categories in your strategic planning activities, if you do not have leadership taking responsibility for the organization’s planning, it will always fail. Thus, all plans and planning activities fail when the leaders do not support them. If a leader supports the plan and the planning activity, overcoming these five problem areas during your planning will practically guarantee success. Let us review these categories more in-depth.
Albert Einstein said, “If I had an hour to solve a problem, I would take fifty-five minutes to analyze the problem and five minutes to solve it.” All successful plans have an Executable Focus. If a plan lacks focus on fixing organizational problems and overcoming barriers to the organization’s vision it is not built on the realities of the environment impacting the organization. This occurs when the organization does not look deeply at itself to understand what strengths and weaknesses exist within the organization and what opportunities and threats exist outside the organization. This is normally captured in a S.W.O.T. Analysis. When plans are built in a vacuum with by leaders or a planning team sitting in a conference room one afternoon, they often lack this focus. Thus, the first and most effective step to strategic planning is conducting an Assessment. This assessment is called many things: an environmental scan, organizational assessment, preplanning analysis, etc. The end result is developing a strategy that is focused on fixing problems and overcoming barriers to the organization’s vision and not just some good ideas dreamed up in a conference room.
Once the organization understands the barriers it faces and what it has at its disposal to leverage, developing a well-informed Strategic Framework is the next crucial step. When the major elements of a strategic plan (i.e., mission, vision, and goals) are not influenced by the assessment, they are often built upon fallacy and personal beliefs — a recipe for planning disaster. The same failed result also occurs when the leadership hands over the planning responsibility to someone other than themselves. The leadership’s primary role is to decide the direction of the organization and when the plan is not developed by the input of organizational leadership, it does not have their buy-in. Just as importantly, a plan built without the input of the organization’s personnel will have an equally difficult time of gaining approval and traction. A good strategic framework will include at least three key elements:
1. A purposeful and everlasting mission statement.
2. An inspiring and far-reaching vision statement.
3. Three to five broad goals that encompass what must change.
Having a mission, vision, and goals is nice for an organization, but without a roadmap on how to achieve these lofty items means the plan will probably go nowhere; least of all, no one will be able to “get on board” with the plan. Thus, a strong strategic plan should also have Traceable Implementation. Plans, not built based on the strategic needs outlined in the assessment normally have no traceable implementation. Also, if the plan was not built from organizational involvement, any plans to implement probably are not based in reality. Traceable implementation means having a solid and accepted implementation plan. The best way to flesh out an implementation plan is to facilitate organizational action plan development with the personnel who will actually implement the plan. This ensures the plan reflects the realistic capabilities and constraints of the people who are in charge of seeing the actions through. Also, this will gain the buy-in of those in charge of those actions. The best way to build an implementation plan is to document it as a series of interrelated projects aligned with existing organizational resources and performance measures. In this way, the implementation of the strategy becomes an organizational program with a series of matrixed projects.
Plans not backed by governance and funding lack Rigor and Accountability — a leadership ignored and the under-resourced plan is doomed to failure. Once the plan is built, the way to keep it alive is through regular monthly, quarterly, and annual reviews. Leaders must hold organization personnel accountable to the plan and they must provide the required funding and resources to see to the implementation of the plan over time. Developing documented governance to budget, track, measure, and adjust the strategic plan and planning activities assist with its success.
Leaders can build the best strategic plan in the world, but if the activity and the plan are not well communicated, no one will know about it and no one will support it. Communication focuses on the communication activities designed to drive audience commitment from an awareness level to one of advocacy. These levels of audience commitment assist with the success of any planning action and are defined as follows:
Awareness: When the audience is aware, they are cognizant of efforts within their immediate surroundings — this leads to a better knowledge regarding the plan and planning activities
Understanding: When the audience understands, they acknowledge the purpose of the planning efforts as it relates to their immediate situation
Acceptance: If an audience accepts, they realize the benefit of the strategic plan and better embrace the planning effort
Advocacy: As advocates, your audience has full situational awareness and ensures the greatest impact is achieved by the strategic plan — the audience becomes a champion for the effort
By providing an executable focus through an effective organizational assessment, leaders set the planning effort up for success. Developing a well-informed and leader-led strategic framework of a mission, vision, and goals, sets a strong foundation for any strategic plan. Integrating rigor and accountability into a traceable implementation plan drives the success of the strategic plan for years to come. Ensuring the entire effort is properly communicated to everyone impacted by the effort gains their advocacy to see the plan to success.
So, 70% of all plans fail to some level; however, by following these guidelines you can help ensure your strategic plan will be one of the 30% successes that everyone reads about.
As a your personal and professional business coach and consultant, I can help you develop and implement a successful Strategic Business Plan that will facilitate your company’s success long into the future.
My mission is to see you personally and professionally successful in business. The larger the business problem, the more exciting the challenge. Contact me now if you need my help.