10 Reasons Strategic Plans Fail!

There has never been a time when there was a greater disconnect between the vision of senior leadership and what is actually going on in the daily operational tactics of their organization. The difference is growing larger, with each passing year. As a result, long term boardroom strategies are being based on unrealistic perceptions, while decisions about operational tactics are being based on the short term daily requirements. The outcome of this chasm can be devastating. General Motors and Ford planners were late transforming their vehicles to meet the challenges of changing tastes and higher gasoline prices. Starbucks leadership failed to realize their customer value proposition. Airbus failed to structure their commercial plane business to account for the cultural differences of their partners.

The disconnect goes on and on, and the results can be devastating. Vision Statements become fluff, Mission Statements are just pretty phrases, and Purpose Statements are vague and inconsequential. For that matter, any directional thinking, including planned mergers and acquisitions, are unrealistic and doomed to failure; often resulting in a meandering and tortured organization. Any strategic planning process becomes just busy work; destined for the dusty binder shelf.

Why? Is this situation an inevitable outcome of the fast paced organizational environments or can they be corrected before all hope is lost?

The situation is NOT inevitable. If strategic plans are done well, with each critical stage addressed properly, the organization will improve and transform in a manner that supports the senior leaders long-term vision. But, there are no shortcuts. Take a look at the stages and what often goes wrong in each one. Reason 1: Senior Leaders Often Lack an Understanding of the Day-To-Day Operational Requirements. If these senior leaders are developed within the organization, and internally promoted up the ranks, dramatic changes have occurred since they last performed the functions themselves. If the leaders are brought in from outside the organization, there is a deficiency of contextual understanding.. The result is that these new leaders, in very short order, become overwhelmed with information overload. In no time at all, the employees of the organization are spending a larger percentage of their time filling out count sheets than they are on the productive role they were hired to perform. The eventual result for the old AT&T was that senior leaders lost enthusiasm for the strategic planning process, and its implementation, and begin to shift their focus to other day-to-day survival.

Reason 2: Strategic Planning Teams Lack an Understanding of the Legacy of Strategic Planning and Plans in the Organization. There is not enough time invested in evaluating the history of strategic planning, and the resulting plans, in the organization. Whats been done before, what was the result of any previous work, where were the successes and failures, and how did it impact the employees? All these affect the planning teams ability to analyze, develop and implement a strategic plan. The possible result for Fannie Mae is that internal resistance and frustration lead to a repetition of mistakes and a failure to take advantage of opportunities. Reason 3: The Planning Team is Frequently Constructed Poorly. This includes two critical issues diversity and skills. Diversity is more than just gender and race. Although these two areas are very important, it also includes age, experience, knowledge, regionalism, education, culture, value, norm and personality. Each of the categories, with all their subsets, brings varying perceptions and understanding of events to the planning table. If an organization doesnt understand the value of diversity, and require it as part of the strategic planning effort, there is little likelihood of plan success. Additionally, many organizations place individuals on the planning without an analysis of what exact skills required to complete the process. Its more than just team leadership and time management. The current result for Alcatel-Lucent is that a team with only limited cultural perspectives fails to take the entire organizations realities into consideration. Reason 4: The Senior Leaders Ideas Are Not Integrated Into the Plan. What is the direction of the organization, as perceived by the senior leaders, and what are the personally important issues to each of them? Many planning teams, in an effort to complete the work quickly, fail to conduct a comprehensive examination of the leaderships Vision, Mission, and Purpose perceptions, plus any other directional thoughts they might have. If the leadership cant see their ideas in the eventual strategic plan, it will be treated as incomplete and tossed aside. The repetitious result for the Army National Guard is a perception that the planning team has only been doing check-the-box work and the effort was not worth the investment. Reason 5: The Organizational Realities are Not Clarified or Defined Well. A poor or shallow analysis leads to unrealistic action plans that do not reflect the true cause and effect of the realities. Is what they are fixing actually going to result in the changed situation? In addition, any resulting action plans become very hard to measure. Remember, its more than whether a change has occurred or not; its where an organization is in moving toward the change. The possible result for Pfizer Pharmaceuticals is that initiatives do not produce the desired change. Reason 6: Any Possible Alternative Options are Not Developed. There is always more than one way to fix a problem. What, where and how to fix immediate short term performance improvement issues (what needs to be fixed to perform better today) and future transformational issues (what needs to be fixed to better prepare to tomorrow) needs to be looked at from multiple solutions. They do this by evaluating multiple alternatives based on available resources (people, time, tools and money) and priorities. The past result for Kodak was that available resources were not utilized most effectively.

Reason 7: There Is a Failure To Construct a Scorecard That Can Be Understood and Implemented by Everyone. There are two contributors to possible failure in this stage. First, most scorecards are too fluffy and written to impress those at the top of the organization. They are very hard to understand by all the other members of the organization. Scorecards have to be communicable or they get lost in the daily activities. Remember, everyone must see themselves, and their job, in the strategic plan or they will toss it aside. Second, theres been a lot of talk about a scorecard that is in balance, but, if the previous stage is done correctly; priorities will give weight to certain actions ahead of others. Many organizations try to develop a balanced scorecard to look good, but overstretch their resources. The past result for Danka was that there were not enough resources to work the action plans and, as a result, created an atmosphere of frustration and de-motivation. Reason 8: The Accountabilities for Each Action are Not Understood. Who will be responsible for each individual action is almost more important than understanding who is responsible for the overall plan. It has to be someone who is willing to accept the responsibility and has the authority to drive the action. The devastating result for Bear Sterns was that when action plans have a natural linkage to each other, if one action fails, they may all fail. Reason 9: The Implementation Plan of a New, or Revised, Strategy is Not Well Communicated. Although there are several other components of this activity, many organizations fail to develop effective communications prior to, during and after the roll-out of the strategic plan that would assure enthusiasm is sustained and preserved. Nothing succeeds like success, and its important that the team demonstrate, as quickly as possible, improvement; even if it is only for a small component of the overall plan. The ongoing result for Yahoo is that new strategic plans are rolled out and quickly disappear into oblivion. Reason 10: The Critical Contingency Plans are Never Developed. Remember the old, but true, saying What can go wrong, will go wrong. Almost all organization fail to recognize that for each and every action shown in the strategic plan, a team must develop, proactively, a contingency plan for alternative approaches to achieving the goal if realities change and the developed action is no longer feasible. When teams wait for the engine to derail before they consider how to get it back on the track, precious time will be lost that could negatively impact the entire strategy. The result for just about every organization is that strategic plans melt away when the urgent replaces the important.

Do strategic planning right or dont waste everyones time. A well developed process can make all the right connections between Boardroom strategies and Operational tactics; assuring a brighter future for any organization.