Will Your Strategic Plan Work?
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.
