As we discussed in Part 1, Strategic Planning is a practical process that produces a clear strategic vision for the business, generates a compelling positioning statement and therefore, in context, delivers an aligned set of operational actions to get you there. So why do they receive such bad press? Here are a few specific reasons I’ve observed over 30 years:

Why Do They Fail?

  1. The team are not prepared to put their heart and soul into them.
  2. The market analysis is superficial and does not sound credible to most of the team.
  3. Numbers are prioritized ahead of positioning. Positioning defines who you are, who you recruit, what you measure. Only then do a set of numbers that stem from this thinking, make sense.
  4. The connection between big audacious goals and operational projects is weak.
  5. The story being told is uninspiring and lacks leadership.
  6. The team members can’t see themselves on the stage, executing the plan.

Why Do They Succeed?

  1. Shareholder Objectives: The shareholders are clear on their strategic and financial objectives and the level of risk they are prepared to tolerate.
  2. Market Landscaping – You understand  your market segments, their growth rates and the demands of the key customers within them.
  3. Competition: You understand the strength and weaknesses of your competition and why you can win. You are careful of which battles you want to win.
  4. Customers: Because you are in constant conversation with your customers up and down the organization, you understand your client’s client. You are clear on the outcomes you can deliver to make your customers more successful.
  5. Awareness: As a management team, you have great self-awareness. This allows superficially tempting diversions to be quashed before they undermine your plan.
  6. Analysis of Metrics – You really examine the evidence with an open mind. Marketing, Sales, Competitors, Customer Support, Unit Sales, Employee Turnover, Margins. Everything that gets measured gets reviewed to understand why you fail and why you succeed.
  7. Validation: You understand the shortfalls in analysts predictions and that not all customers tell the truth. This analysis is still vital as you garner the best incomplete information to make decisions.
  8. Field Testing – It’s important to stress test this thinking. Get your thinking in front of customers and partners you trust. Socialize the ideas amongst key managers. Are you really capable of winning? Can you excel at this strategy? Why would you fail? Can the balance sheet scale in accordance with the plan?
  9. Assumptions tweaked – Inevitably ideas will be shaped by contact with the real world. Value propositions will require re-calibrating. Missing skill-sets will be identified. Funding gaps may appear? Acquisition targets may not exist in practice, but seemed a good idea on paper.
  10. Policies by department – Positioning drives everything. Knowing where you are going is crucial! Who you are is what you measure. Who you are determines the marketing narrative, web site, and collateral. Who you are attracts talent and frames the story you tell new recruits. Only when strategic positioning is complete can one build a credible set of tactics.
  11. Financial Forecasts – People get confused with the word Plan. They think of financial numbers. They think of cash flows and profits. Financial forecasts are a corollary of great policies. They flow from a set strategic desires. This will be an iterative process until both the desired policies and the numbers are aligned. Compromise will be needed.
  12. The Strategic Plan – Capturing all of this work in one document is important. It must be a document that employees can believe in. It is a leadership statement. It will ensure that all operational playbooks and tactics are anchored in context. It should drive the alignment of all activity to ensure the business fulfills its potential.

In summary, as Jim Collins (Good to Great) once said in his series of great books, really successful companies over long periods of time, become superb at zooming out and zooming in. Strategic Planning is essential for all companies, not just big ones.

The Portfolio Partnership project manages all aspects of Strategic Planning for clients. Please contact us to discuss timetable and cost.