Why Strategic Planning Fails

It goes without saying that most successful businesses are good operators. In those organizations, the owner or CEO usually has a clear vision of the future, and sometimes even a sound strategy to get there. So why is it, that corporate surveys found that 90% of companies don’t execute their strategic plan successfully, and 95% of employees don’t understand their company’s strategy?

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In Your Company
Do you ever see signs that your colleagues are having difficulty following through on their strategy? Do they seem to have plenty of projects and actions happening, but it’s not clear that those actions are helping them achieve their vision? In my practice, I listen for comments from my clients like this:

  • We have a key business issue that has been analyzed to death, but we never execute against it.
  • We have good plans in place, but we continue to miss our targets.
  • Only the owner understands everything that’s going on around here.
  • We try to be all things to all people, and everything seems like a  priority-but we never get anything done.

strategic-planning

The Planning – Execution Gap
If you see this in your company, the reason is the planning-execution gap; that great divide between strategic planning and execution. Usually known as operational planning, this area of the overall planning process is often misunderstood and overlooked in many organizations. To make matters worse, as many firms focus on being more strategic at the senior leader level, and putting tight process around project execution at the lower levels, the planning gap is becoming more pronounced.

Helping Your Company Overcome the Gap
The biggest challenge to overcome is bridging the gap between strategy and execution. Don’t fall into the trap of helping your executives articulate a nice strategy that can’t or won’t be executed. So many organizations live with the Planning Gap because it is easier to “do” business planning once a year, and forget about it. The following year, everyone can seem surprised that very little actually got accomplished, justify the shortcomings, and do it all over again. It takes hard work and strong change management to help managers and employees break the cycle.

To help your company overcome this gap you’ll need to assess the strength of your strategic and operational foundations, and determine where some relatively minor changes to your business planning process can begin to bridge the gap. Before they called me, many of my clients had the foresight to recognize their gap, but they just tried to plug it with big, unwieldy planning and budget processes that employees learn to hate. Without shoring up their strategic and operational foundations first, no amount of process is going to fill the gap; in fact too much emphasis on process only widens the gap between planning and execution.

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