This is one of the toughest questions to answer for most people who do strategic planning. The average company that does strategic planning typically achieves only 30% of their objectives. Since your strategic objectives represent the highest priority initiatives in your organization, why would that number be so low?
First, we must recognize that strategy is never urgent until it’s too late. The time to make strategic changes is well ahead of when they are needed. There is an unfortunate trade off where you can trade money for time, and finish sooner. No company considers these major initiatives urgent until the strategic issues are eating away at your profits, and – by that time – you are unlikely to have enough money to overcome the urgency factor. What this means is that we can always postpone strategic decisions and convince ourselves that failure to change this year won’t kill your company. This is usually true – but the cumulative effect of years of strategic procrastination has killed thousands of businesses.
Secondly, we must recognize that, like most people who have to implement strategic initiatives, we have urgent routine tasks to handle every day. Unless you are running a Fortune 50 company (and even then!), your team must split their time between the routine (what many consider to be “my job”) and the strategic. Given the postponable nature of strategic objectives, it’s understandable that strategy implementation almost always loses out in that competition.
Thirdly, in strategic planning there is almost always a fear that we won’t pick the right objectives. This leads to setting too many objectives, and it also contributes to setting objectives that are nearly impossible. There is nowhere where our managerial appetite to bite off more than we can chew is more apparent.
In my 2,000 plus strategic planning meetings, I’ve seen people set well over 5,000 strategic objectives in companies of all sizes. We’ve track data on strategic objective execution since 1997. From that data, I can tell you that there are five things you can do to hit the highest level of effectiveness in strategy execution:
1. Set a reasonable number of objectives
When someone calls to discuss their strategy execution, I usually start by asking “How many strategic objectives did you set?” This is because the number of objectives will – regardless of the size of the objective or the company – directly affect what you will get done. The correct number, for every single company in our sample, is somewhere between 5 (for the smallest teams) and 10 (for the largest teams). Even in very large companies – and we’ve don’t this with companies that have over 50,000 employees – the number of objectives successfully completed drops after you hit around 10. This is simply an execution-relation expression of the idea of focus – try to get 20 things done, and you’re more likely to get halfway done with most of them instead of 100% done with 10.
2. Write your objectives well
Most people who spend time around strategic planning will be familiar with the SMART objective. SMART is an acronym that means:
Specific – it clearly states what will be accomplished
Measurable – the objective results in a objectively measurable outcome (even if it’s just true/false)
Achievable – the objective is realistic and possible with the resources you have
Result – the objective is stated as the result you intend, not an action (ie “sell 10,000 cars” and NOT “introduce a new car model”)
Timely – the objective has a realistic deadline, based on resource availability, which will allow ongoing management of implementation activities.
3. Create an action plan of well-defined steps to complete the objective
Action plans are critical to good execution. Breaking down any objective implementation into finite, manageable steps gives you the ability to tackle it as a project and manage focused execution over the course of months. A good action plan clearly tells you what you will need to do at each step of the way, so you don’t waste time trying to figure out what the next step is when you get to it.
4. Schedule actions based on resource availability – both time AND money
Many companies do plan their strategic projects with budgets, but my experience shows that money is rarely the limiting resource in objective execution – time is. This is at least partly because strategic projects usually require dedicated time from top executives in your organization for management, tracking and decision making at key points. When those executives run out of time, it’s often impossible to find more time, which results in the project being delayed. Since strategic activity is rarely urgent, these delays often result in the failure of the entire project.
5. Monitor your execution by checking in on each scheduled action step MONTHLY
This is another critical item. If you plan the action steps required to complete your objective and schedule those activities based on resource availability, you will have a calendar of actions which must be taken to complete the objective on time. Because these are postponable activities, a system that drives urgency for the scheduled completion of the steps makes a big difference. We have found that annual reviews tend to drive 10-20% of objectives to be a year late, quarterly reviews drive some to be a quarter late, and monthly reviews drive a higher completion rate with most late objectives being completed about a month late. One hour or so even month checking in with the entire team on progress on each action plan will give you significantly better results.
The average company doing strategic planning without these systemic approaches will likely achieve about 30% of their objectives. If you use all five on these ideas, you should be able to achieve 80-90% of the objectives you set in your strategic planning each year.