Each year, business leaders complain about how strategic planning is ineffective or useless. A growing number of articles point to this problem. Strategists have become the whipping boys of the corporate executive suite. Despite the hour’s strategy teams spend on rigorous analysis, scenario modelling, market research and countless plan drafts which point out specific problem areas or new growth opportunities, when it comes time to state the strategy, business leaders cop out.
They end up softening the edges. They resist being specific. They compromise because they don’t want to offend anyone or leave any group out. They don’t want to risk placing a bet and being wrong, so they bet on everything. The result is a lowest common denominator strategic plan which sounds pleasing to everyone but serves no one. Companies need to break the cycle. Here are five practical and actionable things business leaders can do right now to make their next strategic plan better.
Force Rank Priorities
When leaders are overwhelmed with too many ideas and too many initiatives they face a true test of leadership. CEOs and business leaders need to rank the most important initiatives. If a team of leaders is responsible for the strategy they must all rank the ideas. Leaders should be able to decide what are the most pressing issues and pick out the top initiatives which can address those issues. A ranking forces teams to realize that resources are limited.
Make Big Bets
The idea of making big bets sounds scary. Managers worry that a big bet might fail and generate bad publicity. But even worse is when companies don’t make big bets and spread a thin layer of resources across too many projects. Projects generally need more time and money than originally planned. So in reality, a long list of thinly resourced projects results in a long list of failures. Articulating a few big projects provides clarity and aligns resources behind a few things, improving the chance of success. It also provides clarity when people deviate from the plan. Having a few big bets serves to redirect everyone’s time and focus on a few things (rather than a long list of projects which people might forget).
Set Measurable Goals
When leaders provide a clear picture of what success looks like, employees can easily follow the plan. Success needs to be measurable either in revenue, profits, milestones or some other metric. Without a clear, measurable goal, people can’t see a finish line and won’t be able to maintain motivation or momentum.
Communicate, Communicate and Communicate
Once a strategic plan is set, with a few big bets and measurable goals, they must communicate the plan at every chance. Webcasts, regional town halls, small group meetings and even one-on-one manager-employee meetings should focus on the strategic plan. Everyone in the company needs to understand the role they play in achieving the goals. People need to hear a message several times before they fully understand it and execute it. Without communication, a plan won’t be understood, much less executed. Leaders should plan out their communications in advance and use every available method.
Announce the Reward
Strategic plans are effective when four things fall into place. A clear plan needs to be set. The plan needs measurable goals. The plan also needs to be communicated broadly. And finally, everyone needs to know what they are working for, whether it is a stated bonus, a healthy stock price, extra vacation time or even a promotion. Employees need to understand how they can help execute the strategy and what they will receive when the company reaches its goal. They are motivated by a suitable reward