At an initial strategic planning kick-off session for a client company, the senior vice president of marketing spoke up: "I've been through these strategic planning processes before at other companies. Over the course of three months, our management team spent several days together, we put together a fantastic looking plan, then it sat on the shelf and it was never looked at again."
I looked the seasoned executive in the eye and offered this challenge: "It's obvious to me that the CEO and management team at those companies may never have been truly committed to executing the strategic plan in the first place."
"Oh, but we were!" he replied. "We just never converted the great strategic dialogue and consensus into strategic actions. Then we got so buried in our day-to-day duties that we never took the time to focus on executing the plan."
A good plan well executed is better than an excellent plan poorly executed.
The point is clear. To receive value for the time and money invested in strategic planning, you must employ a well-defined continuous process, execute strategic actions and routinely update and refresh your plan.
Seven key checkpoints
The key to securing this value is a CEO and executive team disciplined enough to ensure that the organization stays focused on plan execution. Value exists in the strategic process of analyzing current strategic direction and determining future strategic focus. However, this value is greatly reduced without commitment and focus to implement the plan.
Seven key checkpoints can ensure that you place adequate focus on strategic plan execution during the planning and development process.
1. CEO commitment from the outset
The first checkpoint: determine whether the CEO and management team are truly committed not only to developing the strategic plan, but also focusing resources on executing the strategic plan. Commitment to execution is particularly challenging for entrepreneurial-minded CEOs of closely held companies who tend to be very opportunistic. These CEOs often view the strategic plan process as limiting their ability to "jump at good opportunities." In other cases, significant company-based barriers and issues may exist that must be resolved before the CEO and management team can focus on strategic plan development and execution. Regardless, it's critical at the outset that the organization challenge itself to ensure that it is truly committed to strategic plan execution and follow-through.
2. Overcome the Barriers to Planning and Execution
Every organization has barriers that are built over time that prevent or limit their success with strategic planning and execution. These barriers include such things as a history of unreasonable objectives and unachievable goals, too many strategies, lack of management depth, lack of delegation and accountability, etc. (See the Mead Group eLetter - Are Your Strategic Planning Efforts Doomed To Failure Before You StartUnless these barriers are overcome BEFORE an organization proceeds, it will be disappointed with the results.
3. Fewer, but better-defined strategies
Many CEO's want to take on more than the organization can absorb. Remember, a few key strategies well-executed are better than many initiatives that overwhelm your organization. This is a tough job for the CEO. It's easy to identify many strategies or initiatives that the organization should pursue. It's difficult to prioritize the three or four most important ones and remove the others from the company's plate.
4. Validate your plans with the market
Just because you decide on a sexy new strategy does not necessarily mean that your company can be successful implementing it. It is important that you understand how customers and prospects perceive your company and that you have an honest appraisal of your strengths, weaknesses, and core competencies. Suppose the strategic planning team at Kmart were to decide to that they needed to adopt a strategy to become a high price/high service retailer like Nordstrom. Do you really think the market would accept that from Kmart?
5. Translating strategic direction to strategic action plans
Before preparing to facilitate the strategic planning process, strategic planners often ask CEOs to produce a copy of their most recent strategic plan. Usually, a direct correlation exists between how long it took the CEO to find the document and whether the strategic plan included clearly defined strategic action steps.
Many strategic plans assess the current company situation, market, industry and competitive environment. These plans may also provide a clear strategic framework for the company. However, they often fall short in translating defined strategic direction into strategic actions. Without clear strategic actions that identify who's responsible, deadlines, strategic plan execution and follow-through, it will be difficult, if not impossible, to achieve your goals.
6. Implementing a process for strategic plan follow-up and execution
More sophisticated organizations may implement integrated strategic execution processes. For example, the "Balanced Scorecard Approach" builds the strategic plan around key business success drivers. It links measurable corporate and business unit goals and related strategies with the performance management system. And it builds regular plan execution reporting into the process. However, many companies don't have the resources to develop and implement an integrated approach. If you fall into this group, consider the following options:
- Hold quarterly planning update sessions to review status against plan.
- At key manager or board meetings, create a standard agenda item that requires some discussion/review of the strategic plan.
- Report and update employees on major elements of the strategic plan. A commitment to employee communication will keep execution of strategic initiatives top-of-mind with the management team.
- Assign a key member of the planning team to help the CEO keep execution of strategic initiatives foremost on the management team's "to do list."
- Create opportunities through strategic assessment tools that force the organization to periodically review results and performance against key strategic objectives (e.g., benchmarking, customer satisfaction surveys, etc.).
7. Allow sufficient time for the process
Successful companies begin the process in June and July for the January 1st new fiscal year. It takes time to overcome barriers to success, identify the best key strategies, develop clear and detailed action plans, assign accountability, gain organization buy-in, and integrate into next year's budget and business plan. However, some companies can compress the schedule and conduct the process in the fall. It's better to start a bit later than not to do anything.
A valuable asset to any organization
A continual strategic planning process can be tremendously valuable to any organization. However, its ultimate value is significantly reduced if there's a lack of commitment and focus on implementing the plan. Make certain that you can execute your plans in order to get the real benefits.
Contact us at Mead Consulting for more information.