The 7 Ingredient Recipe for Strategic Planning Success
According to a study by the Harvard Business School Press, “up to 90% of strategies fail in the execution.”
Daunting? Only if you follow the herd and apply outdated strategic planning practices to today’s lightning-speed business environment. Good plans shape good decisions, drive alignment of resources and define “what not to be doing.”
Be the leader you were designed to be and follow T.H.Enterprise’s 7-ingredient recipe for success in strategic planning:
- Involve multiple minds in the planning process. Expand beyond the top few managers to include thought leaders, collaborators, problem solvers, influencers and at least one person representing each of the following job areas: finance, sales and marketing, operations and people (HR). Leverage an external facilitator who is experienced in planning and facilitating for small businesses – someone who can ask tough questions, share best practices and keep people engaged.
- Plan to your level of need. Five-year strategies are passé. Most small to mid-size businesses struggle to build replicable processes and infrastructure; moving from the horsepower of the few to the defined procedures necessary to grow. Set a plan that will position you well for 1-3 years and leverage your strengths while closing infrastructure gaps. Don’t forget to add in elements of fun or frivolity into the planning process, and I don’t mean bowling, golf or bungee jumping. Find a fun, lighthearted facilitator who can cater the planning process to your needs. A good laugh helps people relax and open up to creative and collaborative thinking.
- Confront the brutal realities without ever losing faith. Jim Collins uses this phrase as one of the 6 elements in companies who go from Good to Great. Spend time talking about the power of the vision, market opportunities, value proposition and other internal strengths but an equal amount of time exploring disappointments from the past year and what must be done not to repeat the mistakes of the past. Use passionate inquiry, i.e. Why did we fail to execute? Why did we lose that sale? Why did we miss those deadlines? Don’t be afraid to ask the tough questions.
- Set balanced strategic objectives that include forming the ideal corporate culture. If you are not intentional about what culture you want to create, you will fall into the trap of trying to change a culture that doesn’t fit your needs. Set measurable objectives in four vital areas – Financial, Customer Focus, Production Capacity (internal efficiencies to meet growth and profitability goals), and People Focus.
- Ensure your plan includes monthly measures and quarterly shift sessions, not just a multi-day event once a year. Each quarter, review the strategic initiatives or vital few objectives generated in your strategic plan. Shift resources as needed. The data you use to run your business should be balanced across the four areas listed above. Review the measures of success for each objective on a monthly basis. Create a six month cash flow forecast, then compare the forecast to actual performance in all strategic areas. Let go of projects that don’t hit the priority list. Michael Porter, the king of modern strategic planning, asserts that “The essence of strategy is deciding what NOT to do.”
- Tie the strategic plan to job duties. Too often job duties and performance objectives lose their relevance as a business grows. Implement a performance management process to include bi-annual reviews and updates of job duties and short term objectives. Keep your people focused on executing to your strategy.
- Communicate, communicate, communicate. Share the top line goals with your staff. Make sure every new “great idea” links back to a discussion of the strategic plan. Communication takes concerted effort. Don’t assume people “get it,” because they don’t. Continually discuss vision, mission, values and top level goals. Help your staff to understand the connection between your strategic initiatives and their daily work. This is most readily done with a sound performance management process that is tied to your strategy. Find a strategic HR Consultant, like Teri Hill, to help you in this vital step.
Remember that strategic planning is an exercise in strategic thinking – the more you exercise, the healthier you become. The highest value you can bring to yourself and your company is in shaping, directing and executing strategy. Whether you are a solopreneuer, a business owner, manager or staff person looking to get to the next level, give yourself the gift of strategy.
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