strategic plan | No Smoke and Mirrors

Will Your Strategic Plan Work?

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Why do 90% of strategic plans fail to produce the desired results? Why do only 14% of CEO’s say they do a great job when it comes to strategic planning? If this is true it should not surprise us when we hear 95% of most organizations employees do not understand the organizations’ strategy. Strategic planning is not as complicated or as time consuming like most people makes it out to be. In this post I will share the back of the napkin basic approach to writing a strategic plan that adds value and positions your team to achieve its goals. In future posts I will drill deeper in each of the common steps to insure your team is not one of the 90% who fail to execute…again.

If you ask 12 business leaders to describe strategic planning you will hear 12 different answers. People will often answer that question based on the discipline they are in and their experience. What I have seen with a number of leadership teams is each team member will describe what they feel the plan is specific to how it impacts their department. For example a CFO may share a plan that shares the financial costs and estimated financial forecasts when we hit “the plan”. The COO may share more of an operations type view that discusses aligning the business operations to support “the plan”. CEO’s will often speak in specific deliverables they promised the board… and so on. It’s only human nature to view the world through the lens of your personal experience and background. The trouble is true strategic planning is when each disciple comes together with an over arching plan. Once the plan is in place follow up meetings are scheduled to review KPI’s and make adjustments as needed. If your team is new to strategic planning the first mistake they will make is jumping to quickly into the weeds and sharing tactics and not doing the strategy work. The result will be a failure to execute the plan, because the plan lacked a foundation in a strong strategy.

Nothing frustrates CEO’s more than spending time on a strategic plan no one executes.

Over the holidays I had a chance to catch up with some friends and past clients. Jason, ( not his real name) the President from one of the companies I helped years ago invited me to lunch. Once we caught up he shared the reason he reached out to me: “I think we have a good strategic plan this year, can you take a look and get back with me?” From the nature of the question I was already concerned. So I asked a few questions…

Do you think the plan is strong and will deliver the results the board is asking for?

That’s the trouble Mark, I thought the plans for the last few years were spot on and we failed to hit plan each year. The team clearly knew the goal and failed to hit it. I am losing credibility with the board and some of my senior team and I cannot have another year where we fail to achieve our goals.

If I asked your senior team what strategic planning is could they answer me?

I hope so…I think they should since we have been doing it for years.

In the last calendar year did your plan fail or did your team fail to execute the plan?

(long pause) … that’s a great question , I never thought of it that way ( but did not answer the question)

OK, let me know what you thought would happen if no one on your team did anything new, anything different than the prior year?

I’m not sure off the top of my head… we clearly identified that…. but I can get you that number.

What did you need to hit last year?

( very quick answer, almost before I finished the question) We needed to achieve $X million in sales and $ gross profit and $ net profit. (based on how fast and clear he stated the answer this was a goal he owned)

What was the delta? The GAP between what you should hit and need to hit?

We needed to grow our sales 18% at X% net margin to hit our goal.

How did you plan to cover the GAP?

We planned to hit the goal based on growing current customers and opening new customers.

What is your team’s distinctive competence, the thing that makes your team unique that your plan was built on?

I’m not sure I understand what you are asking. You did work with us a while ago; you know we have the best service, best people, best products, best quality …. We just need to sell more!

… And that’s where the wheels fell off the strategy train for me. The rest of the discussion was specific to each business unit and ended with how sales …”just didn’t make it happen”. So I took a napkin pictured above and shared the basics, the root of any good strategic plan.

What do you think will happen?

What do you want (need) to happen?

What is the delta? The Gap between what you should do and need to do?

How will you fill that gap?

What will you leverage to achieve it? What is your distinction in your markets(s) you plan to leverage?

It is the last question is the most important indicator of future plan success or failure It is the one question most companies fail to answer. If they do answer the question they pick what they feel is what makes them unique in their market. Some teams share what it was or believe they can will it to be.

Very few teams can clearly share their value proposition in a short elevator pitch that resonates with their buyers today. When strategic planning is done properly and is communicated every team member should know your distinctive competence and how you plan to leverage it.

I connected Jason with a friend who also does strategy work following the same model I have used. I recommended he use my friend to facilitate the meeting discussions and gave him a list of questions to ask his customers and prospects prior to the meeting.

“The leading reason why 90% of strategic plans fail is they lack marketing strategy.”
– Mark Allen Roberts

How about your company…

Do you have a Strategic plan you feel will work this year?

Does your team have a history of hitting or missing your strategic objectives?

Is there a common reason why you miss plan?…or did sales just not make it happen again?

The gathering of market data and each business disciplines home work is the easy part of strategic planning. Unfortunately where most teams fail is in identifying the “how” they plan to achieve the objective…the strategy. The reason in most cases is they lack or have a dated value proposition they can leverage and have not been taught strategic planning. In my next few posts I will drill a bit deeper into this very important topic and I welcome comments and questions.

Are You willing to go the extra mile in customer service like Chick-fil-A?

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A third key consideration for leaders and owners of businesses when building upon a foundation of truth is your Motivation. Specifically what are your real objectives and motivation for your business? I often find when helping clients about six months into an engagement the leader’s true motivation is shared once trust is built. It is often not the stated goal and the team are executing strategies and tactics that are not in alignment with the real objective. So early in my relationship with a new client I seek out the leader’s true motivation.

Some common objectives include;

want to be cash positive by (date)

want to retire, so build this business and position it for a sale

want to give this business to my children, please set the business and my children up to win

want to sell my business

want to grow at least 20% per year

want more profitable customers and less of those who do not truly value my product or service

The common objectives are usually stated as “I want’s” not what they plan do for their markets. However market leaders consistently speak in a voice that discusses the difference they plan to make in the lives of their customers.

One of my favorite fast food stops is Chick-Fil-A. I hesitate in calling this fast food as the food I receive is good and the people who work at Chick-Fil-A treat you like you are their only customer. As I travel throughout the US, if I need to grab a quick lunch I look for the nearest Chick fil-A. I order my food and at the end of each service experience I consistently hear “my pleasure”. As I look around the restaurant I am always amazed at the amount of activity they consistently execute to add value for the customers they serve. This week they posted pictures of a gingerbread house making event they held last week and in the future a Christmas ornament making class for children.

When others are afraid to not be politically correct the person at the counter in Akron said “thank you, and have a Merry Christmas, God bless you and your family.” At first this was such an interruption it caused me to pause. It’s sad really when wishing someone a merry Christmas is an interruption, but as the recipient I can’t say how much this meant to me. Traveling this time of year is difficult and for a brief moment I did not feel alone.

So how do large organizations consistently execute a service level above and beyond the expectation? It starts with their leader, and the leader sharing their true motivation. A few years ago I attended a Christian business event and the president of Chick fil A , Dan Cathy ,was the speaker. He shared how they are a faith based company built on biblical principles. You can listen to him yourself as he talks about his team here. One of their key tenants was “going the extra mile”. This is in reference to the Bible passage in Matthew 5:41 . As the owner and president of Chick fil A spoke, he shared how going the extra mile for a busy mom is pulling out her chair and putting fresh ground pepper on her salad. He shared how it actually, form a cost stand point, costs very little, however the impact they consistently see in sales increases year over year are significant, , or as their website states; “we are here to serve more than sandwiches”. They have seen consistent growth for the past 41 years.

Market leader’s focus on a goal bigger than themselves and their personal desires.

Market leaders are on a quest to make a difference for their market and customers in their markets they serve.

How about you and your organization…are you on a quest to make a difference in the lives of your customers?

Or are your employees shouting “next” and supplying the bare minimum?or good enough?

Is your team on a quest? Or are they working a plan they signed up for but honestly where never committed to?

If you have an opportunity, go to a Chick-fil- A for lunch and decide…is this how you are making your customers feel?

The good news is you can!

If you currently are not on a quest…find one!

Once you understand current market truths, and you have identified your internal truths, you must understand your leader’s and your team’s motivation. Market leading teams sign up for a goal that is bigger than them and meeting ROI’s. They sign up for quest’s to make a difference in the lives of those they serve…and interesting their financial results consistently outpace their competitors.

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Proven Steps to Profitable Growth; Step one, …Establish Market Truth

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The first key step in writing a powerful flight plan (roadmap) to grow your organization profitably is; establishing market truth. There are many truths we need to insure the strategies and corresponding tactics and key performance indicators are in alignment with the true market opportunity. Unfortunately a large percentage of business leaders use their gut and intuition and fail to establish current, relevant market truth before they launch market strategies.

The leaves are almost off the trees as I drove South on Route 71 in Ohio last week to work with one of my clients. It’s that time of the year for cold damp rains, grey cloud cover, and this time of year business leaders are sequestered off to key offsite meetings to write their strategic plans for next year. As I discussed in a recent post: October – November…National Strategic Planning Months…When Do you Focus on Strategic Plan Execution? …it never ceases to amaze me that over 70% of sales growth objectives were not achieved in 2009, and yet those same teams will receive sales quota increases in 2010. What are the leaders of these businesses thinking? Is it their assumption that 70% of their sales team is just incompetent, not trying hard enough, or are they just trying to “will” their businesses to succeed? As I discuss in my guest blog post far too often the true issue behind businesses not achieving key performance indicators is more related to your teams ability to execute effective market driven strategies. Since I discuss how to overcome the execution and accountability management challenge in the post I provided a link for above, in this post I plan to discuss one component of truth needed to; build market driven strategies that increase shareholder value.

As I discussed in my post : don’t look now but your lack of market knowledge is showing , far too many leaders are making decisions and writing plans based on dated or worst case incorrect information. How does this occur? The leading cause for Leader Market Disconnection Syndrome ( LMDS) are the Hippo’s in your organization calling audibles without any market data to support their directives. The reality is; thinking is hard work.

When you peel the onion and find the true “why’s” behind your team missing its goals you will find it is not for the faint of heart and requires a strong emotional intelligence.

The quickest way to build strategies that drive explosive sales and profit growth is to get re-acquainted with your market.

Years ago there was a great commercial in which a business owner called a meeting and instead of pontificating about opinions. gut instinct and intuition he distributed airplane tickets to his senior executive team and sent them out,…out into their market to visit belly to belly with those mysterious entities called “customers”.

If you want to create a business plan that results in explosive growth in 2010 and beyond get out of your office and dive deep into your market now.

What you will find very quickly is the market has changed considerably in the last 15 years from when you carried a sales bag. The market has changed significantly in the last six months! As I discuss in my post: Are you Enabling your Sales Force or Emasculating them? some of those changes include;

longer sales cycles
more influencers involved in the buying decision
greater pressure on terms
increased pressure from international suppliers
as well as many more…

The first step in establishing market truth is to get out in your market and speak with your customers, potential clients, and those potential clients you recently quoted and failed to win.

While your sales team will tell you the reason you did not win the contract was price, my personal experience and research has proven time and time again price is not even on the list of reasons why your buyers do not buy. As high as 50% of lost sales are due to the sales process not having the right sales tools to help their buyer buy.

Market leading organizations continually outpace market losers and one of the key reasons why is their clear understanding of their market, its problems, and their changing buying processes and buyer criteria.

Market losers listen to disconnected Hippos and increase their sales objectives although they failed to meet goals last year.

Do you work for a Market Leader or a Market Loser?

When was the last time one of your key leaders met belly to belly with a customer? Potential customer? A customer you bid but failed to win?

Is your organization launching strategies that are market driven or Wall Street driven?

Are the new goals you are asking your team to achieve built from the market up with real current market data, or are they the result of ROI justification meetings with product mangers who never left the building?

Step One, Truth: Establish Market Truth

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