This is one of the most critical times many businesses have faced in the last 30 years. Strategic planning for 2010-12 should be getting serious attention now, but it is neglected by many business owners because execution failures have given the process a bad rap.
I've identified what I believe are 10 of the most common reasons for failure. Businesses that avoid these will be far more successful.
1. Sending the plan down from the mountain. I met a business owner who wrote his strategic plan with his accountant and a consultant, then handed copies to his managers. A year later, he wondered why nothing was happening. He should have included managers of sales, marketing, design, logistics, HR and IT in the process. He didn't include high-performing individuals or informal leaders at other levels. He passed over the breadth and depth of his best people, excluding everyone who could help him sell the plan to the whole organization.
2. Planning without gathering information on markets, customers, competitors and suppliers. To paraphrase Dilbert, some think market research is brainstorming the products we would want if we were crazy enough to be customers. Getting facts from the outside world is critical. Make sure conclusions drawn from the facts are carefully questioned and debated. Bad analysis can be just as deadly as bad data. Build your plan on a solid foundation.
3. Juggling too many goals and projects. Ever been listed as a key resource on 10 "critical" projects? I have, and I assure you it doesn't work. You can excite people about participating on a really important project, but you demoralize them when you push a large number of initiatives at once. Your plan should include only a few very important "move the needle" initiatives. If not, go back and brainstorm some better ideas.
4. Failure to properly plan and commit resources. Execution plans should include specific resource details. Who will participate? What percentage of time will they devote and at what priority level? What funds are needed in which departmental budgets? The plan should be explicit and every affected department manager should be committed before the plan is launched. When resources aren't planned and committed properly, they evaporate and execution tanks quickly.
5. Putting people you "can spare" on strategic projects. People you can spare should not be doing anything important; but when managers are asked for names for a special project, that often is what you get. Managers know they are more likely to get in trouble for losing an order than for slipping on a strategic initiative. Leaders should demand the best people for strategy execution. If department managers have a problem with that, they should start improving their departments.
6. Failure to align department and individual goals and incentives. If you are trying to reposition your business, charging higher prices for innovation, you don't want your sales people pushing for lower prices because their bonus is based only on volume. But such things happen all the time because goals and bonuses are set at times out of synch with the planning process or at a local department level, often without assessing the impact on strategy.
7. Assuming you've communicated. George Bernard Shaw said, "The single greatest problem in communication is the illusion that it has taken place." An all-hands meeting and blurb in the newsletter are not enough. Quarterly all-hands meetings, monthly department meetings and monthly newsletter reports are good, but you can always do more. People are bombarded. It's harder than ever to get your message through.
8. Failure to measure results and hold monthly top-management reviews. What gets measured gets done. Top-management must devote one meeting a month to strategy execution. Are the dates being hit? Is the plan working? How do we get back on track? If your strategy isn't worth one meeting a month, what is?
9. Failure to adapt. Dwight Eisenhower said, "Plans are nothing. Planning is everything." In warfare and business, conditions change rapidly. Plans and leaders must be flexible and adaptive. Many strategic initiatives that fail to produce results are just good ideas executed too late by a management team that didn't adapt.
10. Lack of leadership commitment. When the boss puts the strategic plan binder on the shelf, so does everyone else. The owner, CEO or president must be the one who drives the team to avoid all of these pitfalls. If top management lacks commitment, persistence and focus, strategic planning is a waste of time. Like so many other things, it all comes back to the person at the top.
View Richard Randall's profile
Frequently, in our team building workshops, we have discovered that job descriptions don't exist or have not been examined in years, and that there is confusion and conflict arising out of this lack of clarity. Further examination usually reveals that job requirements may have changed as the organization grew and evolved and, at times, a worker's skills were no longer adequate to keep pace with the demands of a job. All of these factors contribute to a lack of productivity, accountability, and commitment.
