Why Strategic Plans Don't Work…And What to do About It
By Ron Price

For any business, strategic planning is a necessity. It's the key to looking to the future and creating a direction intentionally as opposed to simply reacting to the marketplace on a daily basis. In today's fast-paced marketplace, strategic planning helps company leaders maintain their sanity and build a company based on the values that matter most to them.

Historically, strategic planning meant going offsite for a few days once a year and laying out the company's goals and direction for the next eighteen to thirty-six months. And most businesses, especially the larger ones, feel they need to engage in this exercise to get everyone on the same page. However, surveys show that most executives are dissatisfied with the results they get from that investment of time. In fact, over fifty percent of executives say that they're unhappy with their strategic planning process right now. So while they think strategic planning is necessary, they don't fully realize the benefits they were hoping to attain from it.

Unfortunately, this often results in a cynicism about the strategic planning process throughout the organization, which further results in a lack of accountability and a lack of ongoing clarity in terms of the company's strategy. So what could be a dynamic exercise (and have a big impact on the organization's future success) becomes something that's simply tolerated. And when people feel as though they're just sitting through yet another boring and predictable meeting, they're not engaged, not creative, and not innovative.

Why Strategic Plans Fail

There are six reasons why most strategic plans fail.

1. Lack of focus. Often, people get lost in the semantics of defining their vision, mission, and values. They spend so much time and effort trying to understand what those terms mean and how they fit together that by the time they have it all figured out, they're mentally fatigued. As a consequence, once they get to the actual plan creation and implementation, they're just trying to get it done and over with. Their energy is drained and now they're in survival mode, which is never a good mindset for strategic planning.

2. Lack of energy/resources. Some people run out of energy or resources before they can get to a practical plan. For example, one company got halfway through their plan and then abandoned it. When asked why, they said that they spent their entire budget and ran out of money. So sometimes strategic planning doesn't work because the company hasn't done the right kind of allocation and alignment of resources for a comprehensive process.

3. Lack of understanding. Other people confuse strategic planning with operational planning. That is, they focus on financial numbers, looking at what the numbers were for the past three years and then extrapolating from that. As a result, the planning becomes just a matter of establishing financial targets and budgets into the future rather than having a dynamic debate about the larger strategic issues that could be impacting the organization in the future. These people neglect what has changed since the last time they met, what's changing now, and what might change in the future. They're stuck in the accountant's mindset. And while numbers are important, when they dominate the planning process, they're not being strategic.

4. Lack of accountability. Sometimes the strategic planning process becomes too political. There's too much turf protecting. It becomes a time when people have to give reasons why their plan didn't work in the past. That's when the blame game starts and people become defensive. As a result, the group cannot deal with the real issues at hand. So no matter what plan they come up with, they're not going to have the muscle to execute on that plan because the bigger issues are still pending. When the process becomes too political and too driven by special interest, then it breaks down.

5. Lack of follow up. Many times strategic planning fails because even though the actual plan is complete, there's little or no follow up to ensure that the plan is executed. They get the plan created and in a notebook, but they put it on the shelf and never look at it again. The plan never gets integrated throughout the organization.

6. Lack of flexibility. Finally, strategic plans don't work because the circumstances change and the plan becomes obsolete. It may have been a great plan at the time it was created, but things change in the environment. The fact is that the strategy can be right today but wrong tomorrow because of external factors. So for a strategic plan to work, you have to somehow build into that process a mechanism for reviewing and adapting the plan as circumstances change.

Three Phases to Successful Strategic Planning

The key to making strategic planning work is to think about it as being three distinct phases.

- The first phase is "intuitive thinking," and it has more of an emotional attachment to it. This first phase answers the bigger questions such as, "Why are we in business? Who are our customers? What do they want from us? What do they get from us? What matters most to us? What are the values that we want to drive the way we do our business? Where do we see our company going in the future?" These are big picture, intuitive, and often emotionally loaded questions. At the beginning of the strategic planning process people need the opportunity to deliberately and thoughtfully think about how to respond to those questions.

- The second phase is long-range planning. Instead of being intuitive, it becomes very analytical. It's about understanding such things as where your company fits in the marketplace, what your strengths are as an organization, where your limitations are, and how you relate to customers and competitors. It also includes understanding the regulatory environment, where technology is taking you, and how major trends affect you. So it's very analytical and much more comparative.

- The third phase is operational planning. This is when you get very practical and specific. Based on your intuition and your analysis, you now cover specific issues that you uncovered. During this phase it's a matter of understanding what you really have the bandwidth to do so you don't over commit yourself. For those things that you do commit to, now is the time to develop your plan for implementing and executing on those issues with excellence, which includes understanding who is responsible for what, what guidelines they're going to be functioning under, what resources they're going to have available to them, and what milestones or review points you need to have along the way to make sure everyone is staying on schedule. Similarly, you need to establish how you'll change as the external circumstances change, and establish a clear understanding of what the consequences will be of failure or success.

Create Your Future Today

Realize that you can't work on all three planning phases at the same time. Each phase builds upon the last to give you the proper focus and mindset to make your strategic planning successful.

When you think about strategic planning in phases and as an ongoing process rather than an event, you weave your strategy into the organization's culture. And that's when progress really happens-when your strategic, long-range, and operational planning are a normal part of the way the business functions every day. Only then can your company get the results that a successful strategic plan delivers.

About the Author:

Ron Price is the founder and CEO of Price Associates, a company dedicated to helping business leaders and entrepreneurs solve problems, identify solutions and implement change in strategy and performance. Ron is also the author of "Finding Hidden Treasures," a series of essays with action steps to aid readers in mining their own inner talents. As the former president of the AIM Companies, Ron directed the strategic, marketing, compensation and incentive planning, as well as field training and operations. For more information, visit www.Price-Associates.com or call 866-442-0556.