Business Article: Five critical strategic planning mistakes

Why then, are some strategic plans so useful and instrumental in achieving business success, while others become useless archival documents? The failures are typically the result of five critical mistakes in strategic planning.

1. Just Writing a Plan for the Sake of Having a Plan

The main reason that most strategic plans don't work is because the plan isn't written to be a guiding document. Instead, it is written typically because the idea that planning is a useful management process is accepted, but the plan merely get's paid lip service because it is not integrated into the daily life of the business.

It's not because the discipline of planning is at fault. It is because the plan is written simply for the sake of having a plan.

Most business plans for small business are actually written for the bank manager, not for the business owner and the personnel. Most plans are written to justify someone's concept and to justify a level of funding to be granted, not to be a driver of business philosophy and direction.

The mechanics of the process are often the same in successful planning and failures. The contents page of both successful strategic plans and useless planning documents are often identical. It's not the documentation that is at fault.

The fatal flaw in strategic planning comes from just filling in the blanks without conducting systematic analysis, research and strategy development and often, even if these stages have been performed adequately, the strategies are not broken down into specific actionable projects at a tactical level.

2. Creating a Plan that Doesn't Instigate Action

Many planning documents are full of high level visions and strategies with pie-in-the-sky objectives, but nothing ever changes in the business after the plans are written. Failure to implement is the result of poorly defined strategies that are not developed into actionable projects.

Plans that stop at strategy and don't specify actions will never get it done. Far too many plans don't get to this level. They may make for a good read for the bank manager or the board of directors, but they are useless in the hands of managers and operational personnel.

People do not change their behaviour at a conceptional level. Plans that introduce new concepts and new thinking may have a sound basis behind them. But if they don't describe in minute detail how those new ideas and concepts will be introduced into the daily work habits of the leaders and operators in the business, nothing will change. This is all too often the issue with strategic plans that don't work.

A plan that doesn't lead to effective change is not worth the effort.

3. Not Involving Key Team Members in the Planning Process

Another major reason for failure of plans is the lack of involvement of key people in their development. Plans that are developed by the CEO of the business owner, without the involvement of other managers or team members tend to be ignored by employees as "just another hare-brained scheme the boss has come up with."

Employees don't tend to think strategically because their focus is on getting the job done. They don't typically think of where the business is heading and how to improve strategies. They operate in tactical areas and contribute on a tactical level. So to impose new strategies on them without them seeing the need for them reduces the level of buy-in to the process.

In many situations, employees are branded as being only operational in their work, but without their support, strategic intent will remain a good intention.

The input and cooperation of people at all levels of an organisation is vital to the effective execution of strategic development. When team members are involved in planning, you expand the level of input to the process and increase creativity of ideas. Not only this, but the people who are involved take ownership of the ideas of the group and have a vested interest in seeing the new strategies implemented effectively.

Much better outcomes are achieved by setting up a planning team, rather than going it alone.

4. Creating Plans as a Discrete Event

A strategic planning process is not about the business leaders taking themselves away from the normal business environment for a day, or a weekend, or even a week, to do some high level thinking and emerging with the blueprint for business development for the next year or five. This may be one phase of the process, but it is only the starting point.

The real results of the planning process come from the implementation and review phases of the planning process. A planning process that stops when the plan is written is doomed to failure. Unfortunately, this is where it ends for most plans. Successful planning processes are continuous, ongoing cyclical processes, not one-off events.

Strategic plans achieve results when actions are executed effectively. The results may not necessarily be according to plan. But if the planning process includes a review process, when results are not as planned, either the strategies and tactics can be modified to suit the real environment, or the target results can be re-evaluated in the light of experience.

Good and sometimes great results are achieved in these situations, firstly because the plan was developed strategically, actions were implemented, results were reviewed and follow up planning and review was performed.

5. The Business Looks to the Past Instead of the Future

Unsuccessful plans are often the result of developing a document that focuses on how the business worked in the past and adjusting some tactics to address operational issues that are identified as problem areas.

Many companies have failed as a result of merely trying to do old things better. Successful companies look to the opportunities in the future and develop plans to address those opportunities. In other words, they operate strategically rather than merely tactically.

This is how a strategic business works. A strategic business operates proactively with an eye on the future and by developing strategies that result in actions that move it towards the future objectives. Strategic planning is an ongoing cycle of plan, do, check and act, then start again. A strategic business looks at the big picture and is more inclined to change entire processes and methods to achieve a more effective result, than to tinker with existing processes to make them more efficient.

Most businesses are reactive and their focus is never far into the future. They are reactive to their environment rather than being proactive in understanding it and how it is changing. A reactive business that produces a strategic planning document with strategies that are never implemented remains a reactive and underperforming business.

A strategic business operates with a philosophy of continuous development and improvement and is often ahead of the rest of the industry in its methods and outlook. Rather than fight for a few extra points of market share with its competitors to gain incremental sales growth, the strategic business is more often working on creating new markets and achieving exponential growth rates as it shifts with the times and the environment.

Conclusion

In reality, a business that creates an ineffective strategic planning document is no better off than a business with no plan. For strategic planning to succeed, planning must not be done simply to comply with the need to have a plan.

The planning process must be an integral part of a continuous system and philosophy that underpins a strategic business. Strategic plans typically don't work, but strategic planning that leads to effective action and review typically results in increased performance and high level, market leadership achievement.

© 2007 Greg Roworth - Progressive Business Solutions Limited