Most strategic plans fail, but with these 5 tips, you can create a plan for the year that'll actually make a difference.
About this time every year, in companies of all sizes, the same thing happens. You gather your top executives into a room for a day or two, come up with the company's strategic direction for the coming year and produce a thoughtful strategic plan. Then you proudly tell the rest of the company what you plan to do in an all-hands meeting.
I would posit that most of you would be better off spending the time getting a jump-start on your holiday shopping.
Don't get me wrong, I believe that strategic planning is critical. As Michael Gerber says in E-Myth, it's a time to work on your business versus in your business--a skill entrepreneurs must master to effectively grow their enterprises.
However, when it comes to strategic planning, most leaders and their teams fail decisively. Statistics routinely show that more than two-thirds of strategic plans aren't executed. And I would guess that a good deal more are only partially accomplished.
Most employees already know that. Mention a strategic plan to them and you'll get a groan of "here we go again."
So how do you ensure that your strategic planning is successful? I spoke with Jim Haudan, CEO of Root Learning, a strategic learning company that works with large global businesses to incorporate change throughout organizations, to get his take, and I've also added some insights of my own.
1. Start with yourself. As the owner and leader of the company, you must have a clear idea of where you want the company to go before you engage your team. If there's more than one owner, align your ideas. You don't have to know all the execution details--that's what a management team is great for--but you must have the overarching vision. This can't be outsourced or delegated. So whether you use a peer group, a business coach or lock yourself in a room for a weekend, figure it out.
2. While building the strategic plan, develop a communications plan for translating it. Haudan says the primary job of the leadership team is to be the key translators of the plan. People who create the strategy forget what it's like not to be in the know, so they make assumptions about the vast majority of employees who have to execute the plan. After spending months developing the plan, they expect the same enthusiasm from the staff after a two-hour presentation.
In large companies, strategies often fail because the manager simply can't translate it into his or her team's individual jobs. Haudan's company uses visualization to show how all parts come together for the strategy to work so no matter what piece an employee touches, they can see how it benefits the whole.
3. Meet and measure all year long. The plan must have executable benchmarks that can be clearly measured both on a corporate and an individual level. Each person should know how their job contributes to the overall strategy and, ideally, their compensation should be tied to it.
The management team should meet at least quarterly to discuss how the company is performing against the plan, and individuals should meet weekly with their managers to compare how they're performing against their own individual goals. And if you want to really boost credibility, openly discuss how you're performing against the strategy at staff meetings. Accountability starts at the top.
4. Be the change you want to see. Haudan made the point that we often forget that strategic planning is generally about behavior change, and that's pretty scary stuff for most people. Senior leaders should demonstrate that they're willing to embrace new ways of doing things and may even be struggling along with everyone else. Showing vulnerability levels the playing field and makes people more willing to take chances.
Further, Haudan says that people need a chance to safely practice new ways of doing things. If you're asking people to assume new roles or change established practices, provide an environment where they can role-play behavior or work with a mentor without fear of judgment.
5. Be prepared to create a contingency plan. I've seen a lot of plans get shelved because life comes along and changes the assumptions that went into it. If you lose a client representing 50 percent of your business, clearly the plan you established won't work. Make a commitment that if you get off track, you'll immediately regroup and change the plan midstream. It's likely you'll be able to keep more of the original plan than you thought. And don't forget to communicate the new direction to your company clearly and often.
As you begin your planning process this year, remember why you do it in the first place: If you can't visualize success, you won't know it when you get there.