By Robert A. Simpkins
   
Let's imagine that an organization you’ve consulted with for years is currently experiencing sinking profits, disappearing markets and aging products and services. You’ve heard that senior management is working hard to develop a new strategic plan to get them back on course. Although your expertise is not in strategic planning, the CEO has called you in, as a trusted adviser, to seek your opinion on their new direction.  

At first glance, it sounds good, comes in a “pretty binder,” and seems to be well thought-out but you’re worried about whether it's realistic and would work. 

What do you say? Your future opportunity to work with this company—or to be referred by its executives to other companies—could very well depend on your evaluation of the new plan’s potential for success.

The good news is you can offer up thoughtful advice without going into lengthy research. 

One of the most effective ways to judge the validity of any strategic plan is to understand what causes the majority of plans to fail and to pose delving questions about whether the company has avoided these pitfalls. Once you understand these points and review them with your client CEO, you may find that the company’s strategic plan requires more detailed analysis. If that’s the case, you then may want to recommend that you collaborate with a specialist in strategic planning to provide a fuller evaluation. 

There is one overriding reason and three sub-areas that cause strategic plan failure:

Primary Cause of Strategic Plan Failure

Today, in most organizations, there is a major disconnect between senior leadership’s vision and the operational realities of the front line.   As a result, long-term boardroom strategies are often based on unrealistic expectations, while short-term decisions being made in the field are based on daily requirements. There are three primary weak points that cause this disconnect:
   
1. Senior Leadership: Lack of Sustained Support During the Planning Process

First, senior leaders are often a major contributor to plan failure. They frequently re-deploy resources involved in the planning process to deal with a crisis in the organization. They fail to understand and/or lose interest in the detailed tactical analysis that is vital during the early stages of a plan development.  

In many situations, senior management has, in their collective mind, a vision of where they want to take the entity. When they are presented with tactical analysis that challenges the viability of their vision, they frequently de-value the analysis and even the entire planning effort.   

Questions consultants should ask: Was there buy-in from senior team members about the resource (people, time, tools and money) requirements for a strategic planning process, and were they receptive to all measurable realities discovered in the analysis stage?

2. Strategic Planning Team Leader(s)—Poor Team Member Selection

Planning team leaders often select people like themselves to be on the team, which is a big mistake.  The first step in creating a strong planning team is assuring diversity—diversity of gender and race but also age, experience, knowledge, regionalism or culture, education and personality.  If an organization doesn’t understand the value of diversity and does not require diversity among team members, there is greater likelihood of strategy failure. 

Another common error is selecting team members from only one hierarchal level in an organization. If, for example, all the members are senior leaders, “The Overpowered Team,” the resulting plan will be too vague, resting heavily on long-term visionary thinking. If the team consists of only middle or lower managers (and sometimes non-managers), “The Underpowered Team,” the plan will come out too tactical and short-term in its perspective, and may be met with resistance from senior leaders. If the team members are individuals who are nearing retirement or in transition between assignments, “The Tow Truck Team,” the resulting strategic plan will be flawed because the team has little or no vested interest in its outcome.

Questions consultants should ask: Were all levels and functions represented on the strategic planning team, and how were members chosen, evaluated and trained in the required skill sets?

3. Team Members—Ignoring the Necessity of Quality Measurements

Every bit of data placed into a strategic plan must be measurable. That goes for both hard (financial results, product performance, number of employees, etc) and soft (employee morale, resistance to change, customer satisfaction, etc.) data.  This becomes the common language for understanding, implementing and evaluating the plan.

The first rationale for incorporating strong measurements is to guarantee better understanding—and communications—of the plan. Frontline staff members, for example, talk in terms of units and tactical actions, while middle managers talk in terms of processes and systems. Upper management talks (and evaluates) in monetary and financial terms. Placing a measurement on all data helps every level of employee to better understand and evaluate parts of the plan that may not be familiar to them. 

The second rationale for incorporating measurements is to increase acceptance of the plan during implementation. If the language is not exact, interpretation may vary from individual to individual based on education, experience, functional role, values and belief systems. If not well understood, the plan could be met with skepticism or downright resistance. The only way to avoid the undermining of the plan during implementation is to align activities with solid measurements.

The third rationale for measurements is for evaluation purposes. If clear measurements are in place when the plan is created, then the organization has a baseline to determine improvement or transformation.

Questions consultants should ask: Have measurements been identified for each of the data points (soft and hard) used as the rationale for specific actions? Also, if measurements are in place for each of the Actions, will they actually measure change progress towards the desired improvement or result?

Since every area of an organization will be impacted by a deployed plan, it behooves all management consultants—regardless of their area of expertise—to know why strategic plans fail and what questions to ask to determine if the company has avoided these typical weak points.  Beyond that, they can positively serve their client companies by recommending a more detailed analysis. This recommendation would be far better than allowing the company to begin implementing a strategic plan bound for failure.

Robert A. Simpkins has consulted with and coached leaders in organizations around the world on strategic and contingency planning. His latest book, "Not Another Pretty Binder: Strategic Planning That Actually Works," has just been published by HRD Press.  More about Simpkins can be found at www.robertsimpkinsbestsellers.com or he can be reached directly at team@globalcrosswinds.com.