So, its that time of the year again. Time to do our planning for next year. An ambitious undertaking… but to what end?
Strategic planning can create tremendous competitive advantage, or, it could end up being a huge waste of time. The sad reality is that few companies do it well. Still fewer execute their plan successfully. The results of strategic planning are mixed;
- 67% of well formulated strategies fail due to lack of execution
- 85% of leadership teams spend less than one hour per month discussing strategy
- 60% of companies do not link their budgets to their strategic plan
- over 70% of rank and file employees do not understand the plan
HBR nov 13 2017
With results such as these you may decide that the return is simply not worth the effort. Please don’t despair, as I have seen many very successful strategic plans. Successful plans provide a sense of common purpose, an alignment of goals, fosters collaboration and creates focus. The plan must cascade down the organization if you hope to achieve alignment and focus. The leadership team is chartered with establishing and communicating the vision. They in turn create the strategy with senior team members. The senior team then needs to develop the specific tactics, in conjunction with their team, and they in turn are chartered with delivering on the tactical activities which make the plan a reality. It’s all quite simple actually, until we add customers, vendors, employees and a dynamic business environment.
Avoid these 5 missteps if you expect to implement a meaningful strategic plan:
1) Failure to break the plan into smaller, more manageable chunks
2) Failure to keep the plan at the forefront of team members
3) Poor communications of the plan
4) Inability to define and manage the tactics supporting the plan
5) Lack of coordination between business units/departments
Strategic Planning is composed of 2 distinct steps:
- build the plan
- execute the plan
Building the plan is, in and of itself, a powerful process. If done in a collaborative manner you will create a sense of teamwork and a common set of objectives. In addition, developing the plan causes your leadership team to become more strategic-minded, allowing them to own the plan and be motivated to lead the troops to the destination.
Executing the plan is where it generally unravels. Those organizations that implement a powerful communications and feedback system, get the most out of their planning. You will note that all 5 of the strategic planning missteps above are related to execution.
Donald Hahn, of Hahn Consulting , a Business coach and sales trainer is an EOS® Implementer. Trained in the use of the Entrepreneurial Operating System® Don is committed to Reveal and Release human potential.
EOS, the Entrepreneurial Operating System, combines timeless business principles with a set of simple, practical, real-world tools to help entrepreneurs get what they want from their businesses. EOS Worldwide offers comprehensive training and support to entrepreneurs in the alignment and execution of Six Key Components™ required for business success:
~Start with Vision and Strategy
~make sure you ABSOLUTELY have the right people
~establish meaningful Key Performance Indicators (not laggard measures)
~Identify and focus on those ROOT CAUSE issues that derail your firm
~ Identify, simplify and manage critical processes
~ establish a frequent communications rhythm that keeps the plan at the forefront