Why so many businesses fail on strategic planning

During the coronavirus lockdown, I sat alone in my book-filled studio.

I was surrounded by great literature, beautiful music. A glorious garden streamed through the windows. And I chose to do something absolutely titillating.

I chose to create a Strategy Manual.

Why would I do that?

The reason was this.

It has always perturbed me that so many businesses fail on strategic planning.

By that I mean we don’t see the big picture. Making a business strategy requires big picture thinking.

So often we can’t see the wood for the trees.

Strategic Planning Failures — the Reasons Why

The truth is, few businesses with which I have ever worked, have had a clear and effective company strategy.

But, why?

Why isn’t strategy clear cut?

This is where I tell you — in my possibly quite limited experience — what I think.

Don’t know how to make the strategy

It’s like the monolith in 2001: A Space Odyssey. The Strategy is such a big deal, it takes on mysterious, dark energy. It’s esoteric; understood only by a select few.

The sad truth is that it is a better analogy than it seems.

Hardly anyone knows what goes into the strategic plan. Not really. And hardly anyone has the bravery to want to find out.

A strategic plan requires critical thinking skills. Many companies are filled with sycophants. Followers who assume everything is in order at the top.

They don’t question assumptions

An organisation built on assumptions is operating on quicksand.

Sometimes the assumptions are so glaring, everyone gets blinded.

How do you get around this?

Strategic planning time is when to ask the dumb questions.

My trick is to say ‘Forgive my ignorance, but why do we think the demand for two-seat bicycles will increase?’

Ask these obvious questions. Journalists do this all the time. They have to.  In order to understand a subject they are going to write about, you need to get clarity.

They didn’t keep researching the market

Two times I have had clients who were not aware of important changes to legislation that would make a big impact on their business.

They didn’t read. Not the financial press, not industry news.

They were too busy to put in the research time. That included reading broadsheet newspapers or peak body websites.

Nobody picked up the signals.

Another business didn’t know about the existence of a large competitor who was starting to campaign in its territory.

It is easy to get absorbed in work. But we need to keep an eye on the horizon.

We need to check our compasses so we don’t navigate into what is now a hole.

They kept an old strategy for too long

Yes, we have a strategic plan. It’s in the filing cabinet.

Some organisations think once you make the strategic plan, it’s done. It never changes.

Kept for too long, an old strategic plan becomes stale, and then dangerously moldy.

Disruptions come along all the time. Everything changes.  Keeping nimble is absolutely crucial.

An old strategy is worthless if it’s not kept up-to-date.

There are organisations that rely on a single stream of revenue, often the government. One policy shift and the plan is worthless.

Except as a paperweight. It could indeed be a very nice paperweight.

The Goals Aren’t Realistic

Ouch. This one hurts, but it can be recovered.

Often, the ambitions of a Managing director, especially in nonprofits, let’s just say are a tad lofty.

Maybe they are even completely unachievable.

Setting company strategies on outcomes that are outside the control of the company is not a winning formula.

The company can only manage things that are within its control.

Make the goals in numerical terms. For a small or smaller organisation, things basics.

How much money do you want to make / how many members / what percentage of customer satisfaction is the target? What’s the target rate of lost business?

Outside consultants didn’t appreciate the challenge of implementation

Sometimes an organisation will throw money at a problem. The more you throw, the better the problem will be solved, right?

That can mean outsourcing. We don’t have time or expertise inhouse, so we will get an agency to make out strategy.

Makes sense to a degree.

Except when the agency doesn’t truly appreciate the internal mechanics of the car.

I mean part of a strategic plan (or review) requires a good hard look at yourself.

We need to truly take into account not just our strengths, but our resources, capabilities, and limitations.

If the workforce (or worker) is overstretched, giving them more activities isn’t going to work unless we take some away.

Your strategy isn’t something you should outsource. It’s too core to being in business. If we can’t do it, no one else can either.

We may need to map out the activity sets and understand where there are fail points in processes.

But we need to realistically address what can be done now and what needs more time, money, skills, or people.

As well as where we are heading and why.

The Strategic Plan was Confusing

It may have been made too confusing. Or too long. If something is too long, it’s usually always confusing.

So it was ignored. (A bit like the mission statement, don’t you think? Ever seen a full-page mission statement that the staff remembered and cared about?

Me neither.)

The important thing when it comes to a strategy is that it is simple.

A good strategy might be 50 pages when all the research and reasoning are included, but a visual one-page summary is a final step. That way everyone can ‘get it’.

The Strategy Didn’t Uplift People

People need meaning. We crave it. We crave stories. A good strategy should deliver all of those.

Because a good strategic plan includes messaging and branding, it should cause a lift in morale when people do ‘get it’.

With shiny eyes, your people will be sharing it with partners and friends.

There is something deeply connective and powerful in a shared purpose.

A good strategy is a unifying moment.

In summary

There are so many reasons why good plans fail, or good organisations have poor big picture strategies.

In a nutshell, the strategies are often chasing the wrong goals, too complicated, uninspiring, or poorly researched.

But the good news is that pausing for some big picture thinking isn’t hard. We can simplify the strategy and get it back into shape.

The rewards of a clear and effective company strategy are very rewarding. The goal becomes easy to articulate and easy to understand.

Everyone can feel they’re all working together, for a common worthwhile goal, and we all use our strengths to get there.

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• The Big Picture Strategy: A step by step guide for services PDF Manual is available here for $16
• The eBook for Kindle is available here for $11