The No 1 Reason Why Strategic Planning Results In Failure!

Posted by jpayne on January 13, 2009 under Strategic Planning |

Read any Strategic Planning book and by the end, you will have come up with some thoughts which will help define your company’s strategy.  Read a couple of books and you will have even more thoughts and if you read several, you can blow your mind.  The point is, there are so many different strategies your company can follow. 

Which one is right for your company though?

Consider these positions:

Are you offering outstanding customer service, such as Singapore Airlines?

Are you positioning yourself as the low-price leader, such as ASDA?

Are you positioning yourself in a specific market sector, for example SAGA?

To provide the answer, the question you should be asking is; what should your business strategy do for your company?

In essence, it should define your company’s intent.  It defines what your company intends to deliver to its customers and clients.  Strategy itself though is just the first step in the process. The journey to profitability is dependent on whether you can execute your strategy to achieve business goals.

Companies throughout the world, invest huge amounts of time and money into identifying opportunities and developing the perfect strategy to maximise them. Typically though, the majority of these resources are wasted.

Why is this? Well it’s not because the strategy that is at fault, it’s not even because the ideas are flawed, rather it is the company’s ability to implement their plan.

Research has shown that less than 10% of all actions from strategic planning sessions are effectively implemented and this should start to ring alarm bells for management teams and functional heads alike.

What can you do about it?

1. Delivery.  Recognise what your organisation can realistically deliver. To do this, it is important to know the capacity of your organisation, what resources you have available and the capabilities of your team. Demanding too much, too soon can overstretch many crucial areas of the business. Small incremental changes are preferable to whole-scale transformation, unless you are prepared for it.

2. Communication. It is essential that your strategy is communicated throughout the whole organisation and repeated as frequently as possible. Unless employees can understand how the strategy applies to them and importantly, to their jobs, then you will never achieve total buy in and  execution will be far from effective.

3. Infrastructure. Do you have the appropriate infrastructure to support your strategy? You wouldn’t put a Ferrari engine into a mini, so why expect processes that were put in place years ago to support your new strategy. Now may be the time to review those essential systems.

4. Alignment. Business goals, performance metrics and rewards need to be aligned with your strategy. What may have previously passed muster may not be appropriate now. To be effective, rewards must drive behaviour, which in turn must support your strategy.

Too many times, both business strategy and its implementation is nothing more than a fancy powerpoint presentation or workflow. It needs to be living and breathing, used, referred to and communicated each and every day. You may have defined the route, but have you defined how you are going to make the journey?

Julia Payne Associates have been implementing and providing business coaching and strategic planning to SME’s to FTSE 500 companies for the past 20 years.  Why don’t you contact us to discuss solutions that make a clear difference.