We have, over the past 35 years, run thousands of strategic planning meetings and reviewed hundreds of strategic plans created by others. In that time, we’ve run into many of the challenges of strategic planning common to all companies and seen a few that you can easily avoid. Here are some of the most common items that you may well have experienced yourself.
- The plan is too complicated
- The plan is more about finance than about real strategy
- Not everyone buys into the plan
- The team developed the plan too hastily, without adequate data or analysis
- The team did not follow-through on implementation
There are perhaps a dozen more challenges of strategic planning that we see frequently, but these are easily the most common. To us, these problems are troubling because they are avoidable. Ultimately, the key to all of these is the process you use for strategic planning.
The first challenge of strategic planning – the plan is too complicated
This challenge of strategic planning comes from two sources. First, we are reluctant to skip even minor details in a strategic plan, because we are uncertain about which details will be important in our strategy. Second, we include too much because we want the plan to encompass all points of view.
Both of these issues cause a serious problem. The plan becomes less useful because it is harder to understand and remember. Managers can remember and work with 7-10 items in a list. When we have 20 or more items, however, we will need a reference document to remember what’s in the plan. This is an issue, whether we are talking about market segments, objectives or even metrics.
The second challenge, the plan is more about finance than about real strategy
This challenge of strategic planning reflects a common misperception people have about business. First of all, financial plans are important, but value creation always drives financial results. Financial plans rarely cause value creation – and the success that comes with it. The real strategy of your business reflects good answers to fundamental questions. What do we do? For whom do we do it? How do we beat or avoid competition? A strictly financial plan will rarely ask or answer these questions. To avoid this, make sure you ask WHY the plan will work, and why your plan includes certain strategies.
Third – Not everyone buys into the plan
This challenge of strategic planning almost always occurs because an individual or a very small subset of the people who should be involved, built the plan. Involve and get buy-in from people who have to deal with the daily realities of your business in finance, operations and markets for best results.
Fourth – The team developed the plan too hastily, without adequate data or analysis
Good strategy is built on a foundation of data and analysis. Rapidly created strategic plans often gain speed by giving up the critical early stages of getting appropriate information and assessing the implications of that information. Without these, however, your strategy may work in a fantasy world, but may not reflect current realities in your business. Therefore, make sure you take the time to find and organize information that will help you decide the course of your business. This will assure a solid approach rather than picking a strategy by the seat of your pants.
Fifth – The team did not follow-through on implementation
Ultimately, even the greatest plans amount to nothing without implementation. Many simply rely on the hope that your team will follow through on your plans on a timely basis. Unfortunately, strategic progress requires action on things that no one in your company is doing today. In many cases, it relies upon actions that no one in your company even knows how to do. Delay is a common symptom of this issue – and you can easily end up dropping the ball on otherwise excellent strategic plans. To avoid this, assure that you have good implementation plans with deadlines and reasonable resource allocation. It is imperative that you review your progress on these plans routinely.
Have you seen these challenges of strategic planning? How have you avoided them? If you are interested in a robust approach that will cover all of these issues and more, check out the Simplified Strategic Planning seminar. This will help you avoid unnecessary errors and get you through the planning process in a timely manner.
For great ideas on how to improve the quality of your planning, contact me at email@example.com. Consider holding a one-day workshop on Simplified Strategic Planning.
M. Dana Baldwin is Senior Strategist with Center for Simplified Strategic Planning, Inc. He can be reached by email at: firstname.lastname@example.org