There seems to be more evidence that strategic plans are failing. Why is that? Maybe it is due to more organizations finding themselves in survival mode, or perhaps corporation leaders are less certain of the future due to the current shaky nature of the economy. Strategic plans are still critical to any organization, so determining why they fail and what can be done to minimize the risk of such failures is this month’s topic.
Purpose of the Strategic Plan:
The purpose of a Strategic Plan is to establish a broad, long range set of objectives and goals that are specifically focused on the achievement of the organization’s Mission (the reason for their existence). The strategic plan can have a varied planning horizon (short-term, mid-term or long-term) depending on the needs of the enterprise. Many businesses, profit or non-profit, use the terms “objectives and goals” interchangeably, but I think it is important to separate them by using the following definitions;
- Objectives define the high level of WHAT the organization wants to accomplish in support of the Mission Statement during the planning horizon. These are broad high level statements (e.g. Increase market share in the Northwest region.);
- Goals define the lower level targets of WHAT, WHEN and WHERE activities need to take in order to achieve the higher level “objective”. There are one or more goals for each “objective” and they should each be measurable deliverables (e.g. Increase sales in King County by 20% over last period.).
Why Strategic Plans Fail:
The reason why strategic plans are failing is relatively unique to each organization, but my discussions with clients and colleagues have surfaced five common statements that seem to explain strategic plan failure:
1. “We are just too busy!”: The day-to-day operational issues have priority and strategic plans get shelved (probably next to the disaster recovery plan),
2. “We are not big enough yet!”: The leadership was never really committed to the process and desired results,
3. “Our company changed direction!”: The strategic plan was at too low a level, contained more tactics than strategic objectives and goals,
4. “I wasn’t even aware of it!”: The planning process did not involve enough of the workforce to gain their commitment to the plan objectives and goals,
5. “I thought we were on track, but I guess we missed the mark!”: The strategic plan objectives and goals were not reviewed throughout the planning horizon to track progress.
How to fix it:
Solutions to the five reasons for why strategic plans fail don’t require a lot of innovation, but it does take a corporation’s commitment to the strategic planning process. Below are suggestions for renovating the planning process in ways that will help reduce the risk of experiencing one of the above mentioned reasons for failure:
- There must be a top down commitment to the strategic planning process. The leadership must “believe” in the value that strategic planning brings to the enterprise and they must be able to evangelize this commitment to the entire workforce. It is important that this occurs at all levels of the overall operating culture and that a separation is maintained between strategic and tactical planning activities. At a minimum, perform a semi-annual review of the organizational Mission Statement; consider how well the existing strategic objectives support the Mission Statement; and, evaluate the relevance and progress of the existing strategic goals in relation to each of the objectives. If any of the objectives or goals need to be changed, then determine why they need to be changed (maybe a sign of weak strategy in the beginning) and then change them. Do not keep this a secret; communicate the change to all involved in the process.
- Open the strategic planning process to as many levels of the functional organization as possible- not just management. Select representatives from several levels within the operating functions of the corporation, and use them to communicate the strategic planning process and its results to their co-workers. This will improve their commitment to the objectives and goals and provide a rationale for the tactics deployed within these functions. Workforce involvement will improve the likelihood of an overall successful strategic planning process and will increase the probability for achieving the desired results.
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