10 Reasons Strategic Plans Fail

7/27/2019 10 Reasons Strategic Plans Fail

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10 Reasons Strategic Plans Fail!

There has neverbeen 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.
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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 forFannie 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 forAlcatel-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-boxwork

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 effectof the

realities. Is what they are fixing actually going to result in the changed situation? In addition, anyresulting 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 forKodak was that available resources were

not utilized most effectively.


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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 fluffyand 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 forDanka 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 forBear 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,Strategyis Not WellCommunicated. 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 forYahoo is that new strategic plans are

rolled out and quickly disappear into oblivion.

Reason 10: The CriticalContingencyPlans are Never Developed. Remember the old, but true,saying What can go wrong, will go wrong. Almost all organization fail to recogni ze 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 onthe 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.
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10 Reasons Strategic Plans Fail