Jeremy Gray – Practical Solutions to Difficult Problems
Episode 4 Strategic Plan - a business tool? Or a gatherer of dust?
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THe third in a series of three shows on the topic of strategic planning. The series covers how you can prepare and successfully implement strategic planning in your business or if you already do strategic planning how you can improve the process to make your strategic plan a meaningful document.
This week I will cover why strategic plans fail. How to make your strategic plan actionable, ensuring your plan is relevant to your employees, how a strat plan can provide guidance to decision making and finally what needs to be done to keep your strat plan relevant.
WHY PLANS FAIL
67% of Strategic Plans fail to meet their objectives
A Harvard Business Review article in 2017 had the headline Many Strategies Fail because they are not really strategies. There are many useful insights in the article so I will include a link in my show notes should you want to read more. The Harvard Business Review is pretty generous, allowing you to read a number of their past articles each month.AN
A cause of failure cited by the article is that many so-called strategies are in fact goals. “We want to be the number one or number two in all the markets in which we operate” is one of those. It does not tell you what you are going to do; all it does is tell you what you hope the outcome will be.
Lack of follow up: The strategic plan is prepared, reviewed, agreed and documented and then, and then nothing happens. There are multiple reasons why this may occur.
Lack of resources is sometimes the reason for failure. I have mentioned in earlier shows that the lack of commitment to provide the resources required to implement the actions that will deliver the strat plan is a common cause of failure. But another issue is providing the resources needed to produce a coherent plan in the first place.
THE HOW EXECUTION
Research in the Harvard Business Review shows that 71 percent of employees in companies with weak execution believe strategic decisions are second-guessed, as opposed to 45 percent of employees from companies with strong execution.
Until now you have been working at a high level. Looking forward over a three to five year horizon. Now it is time to identify the tactics, the actions you need to take to implement your chosen strategy or strategies because you can have more than one strategy.
Consider backward planning. I suggest you start by looking at where you need to be just before you are about to launch your strategy into the real world. Then work backwards to today.
Next take a look at your organization, is it aligned with your strategies? One way to do this is to understand how each employee in your organization can contribute to executing your strategy or strategies
The next critical step is to make the strategic plan relevant to your employees. If you follow my suggestion that you should conduct an organizational review you already have a head start, you already understand what roles each employee will play in your plans. Take the time to explain how each employee can contribute to your and their company’s success.
This is not a done once and move on exercise. The message requires constant repeating, you have a vision for your company, make sure your employees understand and share that vision.
USING YOUR STRATEGIC PLAN AS A DECISION MAKING TOOL
The key to using the strategic plan as a decision making tool is to ingrain the strat plan into your company's culture. When faced with a decision employees should ask which solution advances progress towards the strategic plan objectives.
When discussing options with their employees managers should constantly refer back to the strategic plan
ENSURING YOUR STRAT PLAN REMAINS RELEVANT.
Strategic planning should not be a set it and forget exercise. Circumstances change, the business environment is constantly moving, new competitors emerge, other competitors fail, unexpected opportunities arise. Any of these can result in a need to change strategy to take advantage of the changes or minimize the impact if the situation is less favorable to your business. Staying the course under changing circumstances can be fatal to your business.
You and your leadership on learning of a significant change in the business environment should ask how does this impact our strategic plan?
In the absence of changes in the business environment or lack of progress it is a good idea to review your strategic plan on a regular basis, annual reviews are common.
Strategic planning puts your company into proactive mode rather than reactive mode. You will make decisions based on a clear vision of the future which will lead to better decisions. This in turn will deliver a competitive advantage and improved growth and success.
NEXT WEEK’S SHOW
Next week I will launch a series of three programs talking about M&A. The first show is entitled M&A A risk? Or an opportunity. I am even more excited about M&A than I am about strategic Planning I will share my failures as well as successes. You learn more from failure than success
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