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Outside of companies' Strategic Planning units, planning season is usually met with a collective groan. Why? Despite the snazzy charts they include and the always increasing revenue and declining cost forecasts, strategic planning processes and the plans they deliver consistently fail to produce results.
This wouldn't be such a big problem except that strategic plans, if developed and implemented through the right process, play a central role in equipping your organization with the playbook needed to stay ahead of the competition and, more importantly, avoid disruption. You can't anticipate everything that's going to happen in your market. But, through the right planning process, you can absolutely make certain your organization is more resilient.
Strategic plans, if developed and implemented through the right process, play a central role in equipping your organization with the playbook needed to stay ahead of the competition.
So how do you make certain you're plans have the best chances of success? Make sure they don't suffer from one of the following key pitfalls:
1. Ineffective planning horizons most often caused by companies planning over too short of a horizon (i.e., substituting operating plans for strategic plans)
2. Lack of basis in reality due to insufficient contextual understanding of the broader ecosystem (i.e., customer needs, competitor strategies, etc.)
3. Missing tie-ins between interrelated planning units which consist of the corporate center, market facing functions and operating divisions
4. Lack of direct linkages to operating plans that allow the organization to act on a long-range strategy during the upcoming operating cycle
5. Insufficient buy in from key stakeholders on critical aspects of the strategic plan and its core levers
6. Failure to specify metrics to track progress relative to the plan and, in cases where those metrics do exist, no formal system for measuring performance at regular intervals throughout the year
7. Not sufficiently motivating key executive behavior in the ways necessary to drive execution against agreed-to plans and metrics
8. Nonexistent triggers for updating plans to account for material changes to the operating environment (e.g., market entry by nontraditional competitors, disruptive consumption patterns caused by digital channels, etc.)
Top-performing companies realize that ineffective strategic planning doesn’t need to be a fact-of-life. Instead, they understand that key opportunities do exist to increase planning efficiency and, more importantly, to create effective plans. They’re not victim to their planning processes but, rather, they fine-tune and tweak those processes to improve their effectiveness year-over-year. Those are the keys to making sure that strategic planning delivers value rather than serving simply as busy work.
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