I recently facilitated a strategic planning session involving three teams tasked with the job of creating a project plan. While two of the teams huddled and debated, the third tackled the exercise with confidence and focus, finishing a full 45 minutes ahead of the others. (It then, in the spirit of competitiveness, proceeded to rib the other teams about their tortoise-like progress.)
Impressive? Sure, they finished early, but how good was the project plan?
Interestingly, in our debrief session, one thing became abundantly clear: while the ‘hares’ got the plan done quickly and efficiently, they neglected to define the desired outputs. The destination. The desired results. In their haste to complete the plan, they also failed to create success metrics for measuring progress.
It’s an error that can be fatal for businesses. But unsurprisingly, it’s also very common. All too often, organizations approach strategic planning as a check-the-box exercise, rather than as a strategic session that requires honest thought, reflection and – most importantly, clear outputs and metrics. Consequently, they put ambitious strategies and growth targets in place, without first determining where they are going and how they will measure progress.
After 30 years in the business, I like to think of strategic planning a road trip: You can’t answer the question, “Are we there yet?” if there are no markers for success along the way. The journey, as they say, is almost as important as the destination.
Below are three important guidelines for developing any plan, strategic, operational, annual or project plan.
- Make sure the destination – the output – is hawk-eye clear. The very first step is clarity of goal. Ask yourself “Why are we doing this?” The answer to this question needs to be expressed in terms of results (e.g. Improve Customer Loyalty, Increase Sales).
- Separate ‘outputs’ from activities. Try this test: Do any of the words describing your desired results, end in ‘ing’? Example: Analyzing, Reporting, Proposing? If so, you are focusing on activities, not the result. Asking the question ‘why’ will lead you to the output.
- Establish your success metrics.
Here are some ideas for success metrics for Customer Loyalty:
- Percent of revenue from repeat customer sales.
- Net Promoter Score: How many of your customers would recommend your company versus how many would not? Admittedly a tough metric, and not for those that are not totally committed to customer loyalty. Apple uses it.
- Customer Loyalty Survey (ask questions about why they come back or don’t; why they recommend you to others, or don’t) and KEEP IT SHORT!
With these guidelines in mind, you and your teams will be able to check your progress along the path to your destination, and correct your course if necessary. The ultimate payout is (of course) long-term business success and increasing shareholder value.
Let’s face it: many strategic plans are a collection of lengthy, meaningless and often-grandiose statements about mission and vision. Some can be uncomfortable to read aloud; others can be downright cringe-worthy. Indeed, some organizations spend precious time creating BHAGs (Big Hairy Audacious Goals) – also known as elaborate declarations of hope – instead of clear, direction-setting statements. Not surprisingly, metrics of success are unlikely to be found in these types of plans, and confusion about where the organization is really going abounds.
Sound familiar? Not convinced? Well then try this: take a walk about and randomly ask individuals you work with to describe where they believe the enterprise is “supposed” to be heading. Then wait. Listen to what is said and what is not said. You’re sure to be informed. You might even be surprised. And you will very likely be motivated, urgently – to inject some clarity into your plan. If there’s one thing that most successful business leaders agree on, it’s this: fuzziness is the enemy of execution. Clarity is king. Clarity is the key to strategy execution.
How then, can you ensure that your strategic plan is infused with laser-like clarity?
Let’s start by defining what we mean by “strategy.” Every organization, arguably, has a strategy, or a set of beliefs regarding what must be done in order to achieve success. The problem is, most strategies however well-conceived, fail to address the three vital measures of clarity:
- THE MIND.
Ask yourself this: does each individual on the team have the exact same understanding of what the strategy is? Do they ‘get’ it? How do you know this for sure – have you asked them? Great leaders take time to address even the smallest of concerns so that the strategy is crystal clear to everyone.
- THE HEART.
Does everyone support the strategy in the same way that you do? Are they excited and passionate about it? Are they eager to own it, to commit to it? A strategy that everyone understands but on a few get excited about won’t get you far.
- THE HAND.
Is it clear to everyone how the strategy must translate into action for them, personally? Can each and every person say, “Here’s what I’m working on that supports the strategy”? Take a moment to poll your team to clarify what specifically they’ll be doing to make the strategy a success. Are they all on board?
Most companies follow a traditional Strategic Planning process, an often-lengthy exercise involving endless analysis of mission statements, prior decisions and actions, and issues related to management performance and culture. While this can be a worthwhile exercise, the process most often yields a laundry list of organizational goals, strategies and actions, and a plan that is activities-based rather than output-oriented.
An alternative approach is Strategy Alignment, a process designed to align strategies to both the “outside” business landscape and the “inside” environment of the organization, and prioritize the two to three things that matter most to success. Using the clarity measures of MIND, HEART and HAND, organizations can quickly align priorities, and start to focus on great execution of the strategy.
Strategy Alignment begins with a thorough examination of the current situation, including an objective definition of the organization itself, and a reflection of its external and internal environments. Team members are asked to assess the future, create a shared vision and purpose, and set measurable goals for success. Importantly, team members must define what success means at this stage, so that they can answer the question “are we there yet?” Then, and only then, can they start to chart a course of action.
Now comes the hard part. Once the actions have been identified, choices must be made. Clarity of direction does not mix well with long lists! Strategy is about executing two to three things that really matter. These choices define, in clear and undeniable terms, the chosen strategy that will be implemented.
At this point it is useful to reflect on how the strategy changes the nature of the organization. These changes might be structural, affecting the placement of people, skills and capital; or they might be more qualitative, altering in some significant ways the very nature of the enterprise. Again, the principles of MIND, HEART and HAND must be applied to achieve clarity and commitment.
The final output? A Strategic Plan that is aligned with the realities of both the external business landscape and the internal capacities and capabilities of the organization. A document that is infused with laser-sharp clarity. A blueprint for success.
The answer to the question depends on who is being asked. The results of a major study of 1000 companies, government agencies and not-for-profits in over 50 countries, reported in Harvard Business, were rather shocking……well at least to some. Employees at 60% of those companies rated their organizations as weak when it came to turning strategic intent into results. You are not alone! When they were asked if they agreed with the following statement “Important strategic and operational decisions are quickly translated into action”, the majority said no. You are not alone. 25% of those surveyed came from the executive ranks, traditionally the architects of the plans! Are you one of them?
The conclusion that must be drawn, for at least those companies surveyed, is that strategic and operational planning yields a low ROI. Arguably a waste of time and money. The scope and breadth of the study would suggest that your company, no matter how big or small or the country/culture or the sector, is not maximizing the payback for the resources being expended on your planning processes……strategic, operational or project based.
The results are not likely surprising to most leaders. Experience at even implementing small changes is often fraught with frustration and disappointing results. How come?
Well the 2008 study goes on to identify what matters most when it comes to plan execution. The results may surprise you. The first thing that managers often think to do when strategy fails is to re-organize. The results are often disappointing and in some situations worse. Introducing new technology and processes, initiating training and motivational programs or hiring ‘stars’ too often yield short term or little impact on the bottom line.
The research finds that what is often neglected is a very short list of the post powerful drivers of strategic execution.
Of the 17 traits that contribute to effective implementation, one was ranked, BY FAR as the most important. What is it?….. clarity on individual decisions and actions that contribute to the strategic success of the organization. More recent evidence corroborates the earlier report, some more shocking than the earlier study. A major study reported in Steven Covey’s, ‘The Eighth Habit’, says that only 37% of employees have a clear understanding of what their organization is trying to achieve and why; and fewer (20%) really care. Only one in five can see a connection between their work and the strategic direction of the organization. No wonder so many see strategic planning retreats as a waste of time. Been there?
So what should you do to get better at plan execution? Well the HBR article, June 2008, ‘The Secrets to Successful Strategy Execution’, actually gives you 17 things that you can do and may already be doing. But are you in good shape on the #1 trait? Do your people have crystal clear clarity on their actions and decisions that really matter? Are their objectives and plans laser aligned with the strategic priorities? Are they unstoppable when it comes to their commitment levels?
Keep tuned to this station for pragmatic and practical ideas on how to add a healthy dose of clarity to your planning……strategic, annual or for that critical project that you have been assigned.
Founder and President, FOCUS Management
We just published an article in PROFIT Magazine (a Rogers publication), entitled “Why Companies Crash”; subtitled (I guess you could call it that – more of a story lead, I should say) “The Great Paradox of Management is that Growth today can inhibit More Growth tomorrow. Here’s how some High-Flying Firms overcame the challenge that could pull apart your business, too”.
The article comes from research we did with Profit 100/200 companies, interviews with a number of high-flying entrepreneurs, and 20 years of experience working with businesses of all shapes and sizes. What it all points to is that, as size and complexity of the business increase, organizations often find themselves in a state of “wobble”, caused by a misalignment of structure, resources, compensation, strategy and individuals’ roles and responsibilities.
It can cause quite a mess.
The good news? There are ways to detect it happening, prevent it from having calamitous consequences, and treat the organization if it is already present. I’ll write about those instruments, techniques and tools in future entries. For now:
The article can be found by clicking here.
A colleague of mine had a recent conversation with a new client. This client had, for several years, facilitated the annual operational planning process with his (fairly small) organization. Although he was generally fairly happy with the outcome, he often felt conflicted during the process when playing the roles of both facilitator and team leader. As he put it, “I felt as though I had one cheek in my chair at the table and the other one at the front of the room.” He found it difficult to maintain either role effectively and it made him feel as though he wasn’t able to give his best effort. It was frustrating at times and might have affected the quality of the team’s discussion and decisions.
His experience was by no means unique. I believe most of us have the “DIY gene” in our makeup – it’s just a question of the degree to which it influences the choices we make. Its influence over us is amplified, or diminished, I think, by a number of factors:
1. Our energy level and capacity to take on the task.
2. Our understanding of the problem or situation.
3. Our ability to access the tools and techniques needed to perform the task.
4. Our access to funding (or conversely, the inherent frugality of our nature).
5. Our ego.
I want to do some more thinking on how these have played out in my professional experience, and will write about them in future entries. For now, let me cite a personal example from my own distant past…
My first car, a little front-drive sedan, took its fair share of abuse – this from a lethal combination of spirited driving and questionable judgment. Needless to say, this led to a string of minor mechanical issues; and then, finally, the show-stopper. A ball joint in the front suspension had worn to the point where failure was imminent – and failure would have catastrophic consequences if it occurred while the car was in motion. This had to be fixed, and soon. So, to review the list of DIY factors above, I had:
1. Time and energy a-plenty. It was summer, I was out of school and had lots of free time on the weekends.
2. A sympathetic mechanic, who explained what was damaged and showed me a shop drawing of the components. (This was WAY before the internet, and access to information was a whole different game back then!)
3. A jack, a drill, a hammer and a long list of expletives for when the going got tough.
4. A shortage of cash (I was a student, and summer wages paid for parts – barely – but not labour).
5. Absolutely no sense of where the boundaries of my capabilities might lie. This led to unfounded optimism and confidence (and, perhaps, the aforementioned questionable judgment).
I did it. Myself. It took me an entire afternoon (a properly equipped and trained mechanic would have completed the job in about an hour or less). I felt great self-satisfaction when the work was done (see #5, above).
Was the job any good? Well, it held together as long as I needed it to. Six months later the vehicle was written off when a driver slid through a stop sign and smashed into my car, which subsequently head-butted a very stout tree. On several counts, I think fortune smiled on me. No injuries, and no adverse consequences from my inadequacies as a backyard mechanic.
Would I do it again, today?
Let me get back to you on that.