Six Reasons Strategic Plans Fail

Ed BurghardHowever beautiful the strategy, you should occasionally look at the results.

Winston Churchill

With every new calendar year typically comes a comprehensive review of your strategic plan. The intent of the review is to ensure the strategies and tactics selected are still the best choices moving forward, and make certain the organization action plans are designed to deliver against those choices.

Choice is perhaps the most challenging aspect of a strategic plan. Too many finished plans are simply a hodgepodge list of what can be done, not necessarily a clearly thought through and prioritized list of what should be done.

6 Watch-Outs

There are six things I would encourage you to consider as you go through the strategic planning exercise.

Prioritization – Poor prioritization is a killer. You are doomed before you even start if you cannot clearly define the priorities for your organization’s success. Effective prioritization requires bringing the resources required to complete critical path tasks on time and in the appropriate sequence. This is where using a project planning software tool can be exceptionally helpful (as long as the tool isn’t too complicated and too hard to learn). Frequent and truthful communication between members in your organization is important. I added the word ‘truthful’, because it has been my experience that people tend to be reluctant to ask for help and as a consequence may be over optimistic in their ability to hit the performance milestones. This behavior results in project crises that are often tough to manage, and may have been averted all together if the team communication were objective.

Level of Detail – The worst strategic plans are those that remain on a shelf and have no impact on the day-to-day investment choices. Good strategic plans have sufficient detail that you can objectively evaluate progress and probability of success. They answer tow fundamental questions – 1) Where should we play? and 2) How will we win? The objectives and strategies chosen need to be expressed numerically as well through goals and measures respectively.

Alignment between Strategies and Culture – Choices that may be effective, but are counter-culture, will never be properly executed and as a consequence will be the weak link in your strategic plan’s ability to deliver desired results. Communication is the vital element when a cultural change is required for success. You may want to use a model called “The Cultural Web” to peel the onion back and understand why your organization does what it does. Armed with this insight, you can create a management approach to help the people in your organization step outside their comfort zones and improve the odds of success that they will deliver the results you need.

Accountability – Strategic plans need to be thought through to the Action Plan level. It is important to know who is going to do what by when. There is a good, short blog post in CIO Magazine that speaks to the importance of teams holding each other accountable for delivering quality work. Single point accountability that comes with +/- consequences helps avoid the pointing fingers syndrome that is not helpful to team cohesiveness and ultimately increases the risk of failure. It has been my experience that investing time to discuss who is accountable for what helps establish proper expectations. It also allows people to share concerns regarding their ability and/or resources to deliver the results required for success. It is so much easier to address shortages in these areas up-front rather than in process. It also gives you a chance to make changes to the strategic plan if something you thought was possible turns out not to be probable after deeper discussion.

Transparency in Decision Making – No plan is ever exactly right when it is authored. All plans are created with a forecast of future events and need to be flexible enough to be altered as things change. Alterations may have impacts on cost, timing and/or level of achievement. Many times these decisions need to be made by organization leaders rather than team members. As a Director, one of my greatest frustrations was when a team excluded me from making project decisions that I could have materially impacted either by my personal experience or the ability of my level to access resources they assumed were simply out-of-reach. Many times, organizational policies may be involves and failure to have the right person on your organization make the decision creates political or legal risk. One of my favorite models to ensure transparency in decision making is the RACI Model.

Clarity of Goals and Strategies – There is a skill to authoring goals and strategies that are easy to understand by everybody in the organization. Even if a strategic choice is right, if people have multiple interpretations of what it really means there will be multiple directions to the actual execution. Often, this means well intended people will create execution chaos and yet feel like they are doing things correctly. This results in inefficiency and risks the on-time under-budget achievement of the goal. Here is a good article on writing goals and strategies using the FLIP method.  Make certain you read the section on the SMART model as well.

Discussion

Strategic plans are only effective if they are used. Too often the strategic planning process becomes an annual right of passage, but once the document is aligned it gets put in a file and is not routinely visited. One of my colleagues once told me that strategic planning is worthless because it is hard enough to forecast what will happen tomorrow let alone years from now. On one level he is right. If a strategic plan is created and not visited frequently or used to guide investment choices, it is useless. But, a strategic plan (like a Google map) is intended to be used and adjusted if things change. When this doesn’t happen, the problem isn’t necessarily with the Plan, but rather with the deployment process. The other challenge is that small organizations often feel they can operate without a strategic plan, or that the time it takes to create one is a waste of time for them. I believe otherwise. It has been my experience that, regardless of the size of an organization, it is always cheaper and better to fail on paper than in the market.

For community branding, I think every community regardless of size should have a minimum 10-year strategic plan in place to guide their economic development. The challenge is that political timeframes tend to be measured in 4-year increments, so plans from one Administration have a hard time surviving the transition to a new Administration (even if it is the same political party). The solution, in my opinion, is for the private sector business leaders to lead the strategic planning process in communities. These leaders are used to long time horizon plans and have a vested interest in seeing choices on assets creation, infrastructure investment and public policy reform executed as planned. If you are an economic development professional, it is a good test to evaluate how deeply involved private sector leaders are in the strategic planning, review and deployment process. Lack of leadership involvement greatly increases the risk of failure.

Your Thoughts?

Please leave a comment with any perspective or questions you might have. I am eager to hear and learn from you.

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19 Comments so far

  1. Roger G Bell

    November 28, 2011

    This is a huge subject. However after years of experience unless all the major participants are agreed on what they want the strategy to do (i.e. the governing objective) then no matter how good your writing or your analysis / insights then I am afraid it will be extremely difficult to make progress.

    I have found that time spent on trying to get some sort of consensus around the governing objective is usually time well spent and it also helps the discussion later on regarding the ranking and ultimately the choice of alternatives.

    Other than that I would advise against using management speak, jargon and also be very careful around “industry legend.” Frequently such “legends” do not stand up to rigorous examination. Treat anybody who believes that earnings and earnings per share is a good surrogate for value creation with great suspicion (if not ridicule!)

    In addition I really would avoid any mention of the word “culture.” People who use it seem unable to tell you whether the “culture” is an output or an input. In other words is it an output from “success” or is it a pre-condition to it. The evidence suggests that it is more than likely an output – i.e. people are attracted to companies that are successful and hence their “cultures” are deemed attractive but the evidence is not overwhelmingly convincing one way or the other.

    Furthermore, I would try and keep the “strategic plan” as “fact-based” as you possibly can and avoid using terms like “culture” which by its very nature means different things to different people. Also the notion that a strategic alternative should not be considered because it crosses “perceived” cultural norms is frankly just silly. I can imagine the reaction of the CEO’s and Boards that I have worked for it I was to put that forward as a rationale for potential exclusion. In reality this brings us back to the culture input or output question. I am not saying that it is not a consideration but it is after the event rather than a blockage to it, if you see what I mean.

    There is a piece on our website “UK best Workplace – a role for HR” which examines the cultural question in more detail – http://www.bellmallen.com

    Good luck
    Roger Bell
    rogerbell2@mac.com
    http://www.bellmallen.com

  2. Jeff Donohoe

    November 29, 2011

    It’s important to be realistic in your evaluation of your true strengths and weaknesses. This will help to define realistic, achievable goals. Realistic goals are critical – it’s OK to swing for the fences, but most communities survive by hitting singles and the occassional double.

    Many years ago, a client referred to me as “ruthlessly objective” in evaluating their strengths and weaknesses. I consider it one of the greatest compliments I’ve ever received.

  3. Fawad Janjua

    November 29, 2011

    A lot can be written on this topic and more is less truly applies here. Just sharing some experience/learning that may be relevant here.

    Departing from theoretical and into practical world, one aspect needing attention is that information apprently is always availabe some where…it needs to be analysed…meaning organised and used towards the rationale decision making process.

    Startegic planning is in reality an exercise on where we are, where we want to go, how best to reach in its simplest of explanation.

    If true, it depends on the analysis of the data that goes in…input will always define the output.

    Many times unfortunately, even teh strating point is assumptive, and if so where to go and how become theoretical exercise.

    One example is that mostly SWOT/SWOC analysis is perfromed by those that are the most exposed to the situation from direct involvemnet on day-to-day and therefore the LEAST value adders. Bring in for SWOC/SWOT from accross the functional area or external consultant/facilitator is value added towards bringing in the real perspective.

    From first hand experience, I will share here a relevant case.

    During a strategy development exercise, a telecom marketing department team identified the strengths of the int’l roaming as having the most solid technology platform, best interconnect deals and most economical pricing.

    At same time the weakness was identified as awareness, and possibly marketing focus/weight towards this segment.

    SURPRISINGLY…as external facilitators I was the only one who brought up the issue that the global/regional interconnect on same network at lowest price is great idea … Sudan One Network with Bahrain, Saudi, Kenya, Jordan, Kuwait, and many Subsahara-African markets …WOW

    BUT the traffic and market dynamics were so clear that the majority of targets/IR users were not based in the interconnect destinations above and were more dominant in UAE, Egypt and many other destinations.

    The IR was focussing on the minority trafiic and promoting ONE NETWORK at the cost of the regular Int’l Roaming as thats what regional marketing plan was all about… and ignoring the majority revenue segment.

    No, it was not incompetency but a simple non-technical fact that towing the regional marketing line in end-market by not rethinking and challenging and coming up beyond diplomacy and hammered in targets, some one needs to be in position to bring fresh perspective. Some may call it putting a cog in the wheels sopkes…but its the starting point.

    Same people, stating same information, analysisng in same way, towrads same strategy is not going to ever work as much as the same elements through external facilitator and fresh perspective will.

    When due to acquisition by another operator in certain markets lead to the demise of One Network then the MSP wanted to “repromote” the IR segment…late as the horse had already bolted from the barn!

    As exteranl partners, we had time and again stressed to bring in parallel with One Network the rgeulalr IR but it was ignored as marketing startegy was not atuned to this suggestion.

    I explained an operational segment issue to clarify as in reality, strategy at the macro level is then translated into micro level/segment startegies.

    The higher you are the more dislocated you are from core issues or nitty grityy as some call it and when THESE nitty grittys are not avalibale, what planning will be developed…will be dislocated & irrelevant. The failure is apparent.

    Fawad Janjua
    janjuafm@hotmail.com

  4. Linda H. DiMario

    November 29, 2011

    There are so many necessary steps in the process of developing a customized strategic plan that it is almost impossible to identify a single tip. However, push comes to shove, my top tip would be to respect the organization’s CAPACITY when formulating a plan. While every plan must have aspirational and growth elements incorporated, an immediately actionable stratgeic plan must understand and reflect the capacity of the organization to respond, develop, execute and sustain. Otherwise, it risks being perceived, or is in fact, overwhelming – unachieveable, a wish list, a catalog of projects, campaigns, strategies and tactics for which the organization is poorly prepared, undercapitalized or incapable of tackling or implementing. That’s why there are so many “dusty” strategic plans sitting on shelves across the country. And how do you know if you have addressed capacity appropriately? By assigning a set of specific tactics to each strategy which allows the organization to actually see what it is going to take to make progress. If they can identify and agree on the tactic and see themselves doing it – they will get it done!

  5. Vicki Doll

    November 29, 2011

    Agree with both Linda and Wayne. I would take Linda’s statement a step further and add accountability – get the group to determine who will do what, and by when. This is particularly important when there are multiple agencies or organizations involved and will help to get them into implementation quickly. It is also a very effective way of forcing the activities / tactics to be prioritized and brings to light that it all can’t be done today.

  6. Ben Kenny

    November 29, 2011

    I believe it is also helpful to conduct that evaluation with the help and input of people who can give you a variety of perspectives, and look for trends and commonalities among the broad spectrum of respondents, and not just the leaders who are always expected around the table. I’ve gained insight from holding input sessions in 12th grade social studies classes (hearing from many of the brains which will soon be “drained”). Also a room full of senior citizens at an assisted living facility. We began some public meetings asking people to reach back to recall when they were most proud of their community, then to the present for a fairly standard SWOT with emphasis tilted toward assets, then toward the future with their visions. It was tedious yet sort of exhilarating in the most “participatory” project in which I was involved, sorting through the comments of the 400 participants from a set of 5 meetings (we took care to mix up the days, times, and venues).

  7. Morgen Gomo

    November 30, 2011

    Once you have understood your “true and important” strengths and weaknesses, you need to match them up with the environmental opportunities and threats in a 2 x 2 matrix. Strategies should be based on “Strengths taking advantage of opportunities” – SO quadrant and Strength helping to manage threats (ST) and in similar manner, “managing your weakness to take advantage of opportunities (WO). this is where for example, you could outsource some production function so as to take advantage of an emerging market opportunity. and WT, if you follow me. This way, you do not formulate nice to have strategies.

    The second stage involves prioritising strategies, using various criteria – resource availability, turnaround time, impact on profitability, etc.

    Third stage is to investigate more the feasibility of the proposed strategy. My livestock team used to say, we have a strategy of getting private auctioneers to build rural livestock auction sale pens. I then asked them to talk to the leading 3 and verify feasibility of that strategy. They found that none was willing as they considered rural auctions a public good with very long term returns. They then dropped the strategy altogether. So, make it a process and appoint experts to interrogate the top 3 or so strategies depending on your size.

  8. Massimo De Santis

    December 1, 2011

    Ron, you are perfectly right. (The Art of War chapter 0 ! )

    My additional suggestion is that it’s extremely important to be immediately coonfident with the Critical Path.

    Gen.Patton taught that “a good plan executed right now it’s better than an excellent plan executed next week”.
    I fully agree with him. As soon as you have a plan, you have to implement it immediately, otherwise you’ll continue to adjust and readjust the virtual plan.

    Most probably he was talking abot the Strategic Plan Time To Market !

    Ciao
    Massimo

  9. George Harben

    December 1, 2011

    Understand the value of good, clear measurements. Measure outcomes, not process.

  10. Bob Graham

    December 5, 2011

    Know your strengths, personal and enterprise-wide …. leverage them to the max!

    Two implications of this:

    (1) People are what makes an organization successful. Technology and sales/marketing strategies can be copied, not people. Hire smart!

    (2) Spend time energizing and strengthening the strong parts of your people/organization. You’ll get a greater ROI from that than trying to improve the weak parts (which you should propably jetison). Example: a baseball switch hitter bats 310 right handed and 210 left handed .. if you can only get a 5% increase which side should you concentrate on? The math speaks for itself!

  11. Jim Damicis

    December 7, 2011

    In all of this don’t lose site that the process of strategic plans typically rely too heavily on past and current data. In doing so they fail to prepare communities to be able to adapt to unpredictable futures. For example, few strategic planning processes would have been able to prepare communities for broadband technology and the economic opportunities and change that resulted. In times of economic transformation it is important to focus on building leadership, culture, and networks to be able to adapt to a future that data cannot adequately predict.

  12. Anjul Bahuguna

    December 13, 2011

    I hear “Data” often and I couldn’t agree more. Data (both past & current) can be used to form predictive analysis and thus would give “informed tips” while writing a strategic plan. Data is the best source available to any organization to understand trends and make forecasts.

    It is known that the strategic plans which rely on data may fail towards meeting unpredictable challenges in future. However, we also know that data cannot always predict opportunities but often it can.

    Now; the accuracy of predictions/ forecast is directly proportional to the quality of data used. If we can improve the quality of data which is being used to form predictive models and forecasting; the accuracy of forecasts improves. There are very few economic development organizations that are doing what it takes to improve the data quality.

    How can you do this?…there are multiple ways.

    So my tips for writing an effective strategic plan – improve data (past & current) capture capability, validate/ clean the data and use it to make forecasts which are more reliable than any other method.

  13. Eric Canada

    December 22, 2011

    It has always been interesting to me that there is not a tighter connection between the BR|E program and the strategic planning process. The assumption in this discussion and frequently in the execution of a strategic planning project is a bias toward outside data sources. Even when interviews are included in the strategic planning process they are seldom the BR|E interview even though a substantial number of questions are the same.

    In our work we try to encourage economic developers to integrate the BR|E findings in their strategic planning process. States like Iowa where there is a substantial statewide program also provide benchmark data from statewide interviews. For the past 4 years we have helped leadership in Iowa benchmark their state BR|E findings against our North American Key Performance Indicators. As a result, an Iowa community has a state, regional (e.g. Midwest) and national context to compare their community’s strengths, weaknesses, portfolio dynamics, and other local findigns. There is no better source of data especially in volital economic times like these when government data is too far behind to be reliable. The BR|E interview can also give you predictive information if carefully planned. This is invaluable to strategic planning exercise.

    We have been reminded periodically to begin with the end in mind. This is the case with business retention and strategic planning. I firmly believe we should make sure the info we collect is pushed into the strategic planning process within the organization as well as for other organizations that have the ability to influence our success. For example, one ED executive was sitting on the board of a local Chamber and learned about their plans to hire a consultant to manage a strategic planning process. The proposal from the consultant included executive interviews as a substantial component. They were able to offer their BR|E findings including a 4 year history to the Chamber. The end result was the Chamber was able to rescope the project, eliminate interviews, substitute a few focus sessions, and save nearly $25,000.

    So, to your question Ed, my tip is to connect the business retention effort with the strategic planning effort to produce better value from each. Begin with the end…

  14. Mahmoud ElMahgoub

    January 2, 2012

    Most of the times good strategies succeed in achieving its goals specially if preconditions were taken into consideration. Effective strategies are not just doing the assessment, goals, implementation plans and monitoring and evaluating the excution of the strategy, it is more than that. If the expert were not able to read the characteristics of the region where he is working, or the industry or even the client, success won’t be achieved

    In a perfect world, all steps are equally important as you may do the best analysis ever, but fail to have realistics goals or objectives. Also you may succeed in having good analysis commbined with achievable goals, but fail to put appropriate initiatives to excute..etc.

    There are other factors that may affect the importance of each step such as; which region, industry or client. External environment scanning may be crucial if your client exists in a developing country given the increasing politics and competing hidden agendas. You may also need to take extra care of the implementation, as it may be hard to find suitable, skilled staff to implement. One last important thing is to leadership is another important factor. For fast changing industries; external analysis and adapting to change – where strategies may require – are also crucial factors.

    Bottom-line is; steps are equally important, you need to deeply understand the characteristics and precondition that may affect the process and start prioritizing the importance of each step.

  15. James Leier

    January 9, 2012

    Ed looking at the comments and based on my experience with Economic Development and Business Development, a good strategic plan connects to your stakeholders. For economic development good strategies need to listen, understand, and act upon the needs and opportunities noted by local business people (see Eric Canada’s comments about BR&E). For businesses – the customer, suppliers, staff, shareholders, and management are key groups to obtain input from – however without customers there is no business.

    From a writen plan point of view, my preference is a tight focused document that is understood by those implementing it and evaluating it. Typically more detail is desired if public funding is involved in the strategy. Analysis has its role in planning and can be part of important supporting materials. A strong plan with a finite number of clear goals is generally understood. Understanding makes for good planning. Regular quarterly review of progress and adjustments makes for good process.

    What is your vision? Can it be stated by memory or is it not memoraable?

    Good luck in your endeavours during 2012.

  16. Prof.Sitesh Dutt

    May 20, 2012

    My experience has been that STRATEGY has to be preceded by three essential ingredients viz.1)Clear definition and understanding of the shared VALUES in the organisation…2)VISION of the company spelled out in some detail for all to understand…3)MISSION of the organisation
    detailing it’s specific role.STRATEGY should be the final piece in this
    process which should all be ALIGNED to ensure a compact whole.
    If this is done in a sequential way after discussion and agreement within the organisation at every stage it would be a much more meaningful and effective process.This is serious business and takes time and a shotgun approach will surely lead to disaster.If this is done all the Culture issues will automatically be taken care of.Certainly a long-term process but well worth the time and effort!

  17. Graham Robertson

    May 21, 2012

    A few thoughts:
    – on controversial plans, I’ve always tried to ensure that everyone in the room has already seen the plan, and gotten their alignment or at least know where they are struggling.

    – on complicated plans, i’ve spent extra effort to simplify them, believing complicated only works in a classroom, not in a corporation.

    – i’ve tried to map out how to think strategically, with four key areas: 1) focus 2) an early win to show some momentum 3) leverage point and 4) gateway to something even bigger.

    http://beloved-brands.com/2012/04/28/how-to-think-strategically/

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