How to Increase Return on Your Strategic Planning

9-July-2010Published in: St. Louis Business Journal Authors: Benjamin Ola. Akande and Chuck Feltz

One of the costliest mistakes leaders make is unknowingly deviating from their core business strategy. Lack of patience, focus and execution create a layering of one strategy atop another before the earlier strategy has proven ineffective. This energy-sapping "Strategic Churn" exhausts organizations, disenfranchises stakeholders and conditions employees to await the next "grand vision" sent down by management.

Many factors derail successful strategy. But the most common are within the control of executive leadership.

Bad Strategy to Begin with

Flawless execution will not overcome flawed strategic assumptions. Underestimating market trends, customer needs or overestimating the organization's abilities to respond to them doom efforts from the start.

Similarly, driving the "old way harder" despite clear evidence of a changing market is a key driver of strategic sub-optimization. Executives must close their planning process by honestly answering the simple question: "What must we believe for this strategy to succeed?"

Confusing Planning With Delivery

Anyone who has experienced the intensity of a strong strategic planning process knows the relief of a successful conclusion. However, in successful organizations, this relief is temporary and management understands that the real work of delivery and execution has just begun. Many organizations mistakenly equate planning with execution and a plan with results. A plan for execution and resource alignment must be the final element to close the loop on a successful strategic planning process. Anything less reduces accountability, focus and success.

It is Disconnected From the Vision

Well-developed strategy answers the question "How will we achieve and monetize our vision?" It is the context for all decision-making and resource allocation. The link between your vision and your strategy must be crystal clear.

Don't have a clear and compelling vision? Get one. There is no more powerful engagement tool to help employees see how their everyday activities connect them to a grander purpose. Vision answers the burning question, "What will it look like when we succeed?" and every employee should expect their leadership to know this answer.

Underestimating the Change Management Aspects of Strategy

Executives are responsible for thinking about the "why and what" of strategy constantly, which is not the case with the rest of the organization whose everyday focus is oriented to how to do the work. As a result, executives are light years ahead of their organizations in understanding what drives the need to change and why the change must occur to remain successful. Ignoring this foundational axiom of change management makes aligning employees and strategy nearly impossible.

Why You Will Win is Implicit; It Must Be Explicit

It's risky to assume employees clairvoyantly understand their leaders' intentions and interpret them clearly. Executives have hundreds of hours of data analysis and knowledge building as a result of the planning process that shapes their understanding of why this strategy is a winner. Employees that are removed from the planning process and don't have this benefit crave their leaders' insight and confidence as to why the company will win.

Strategic Message Dilution

Nothing is more powerful than an organization whose people are laser-focused on driving vision to reality. Unfortunately, leaders assume traditional legacy communication channels are effective in disseminating this critical strategic information.

Every organization has a "strategic dilution point." The Corporate Game of Telephone differs between companies. In our experience it becomes problematic three levels down from the CEO.

The result? More than 80% of employees attempt to carry out strategy with reduced clarity and focus. Companies that avoid this pitfall excel at two things. First, they "empathically engineer" messages to assist managers to deliver communication in their own authentic voices to their audiences while maintaining content integrity and accountability. Second, they create effective channels and venues to deliver this critical communication.

Progress Reviews Are Ineffective and Rare

Effective organizations perform routine strategy self-examinations often in the implementation phase in order to critically assess progress, diagnose issues and make timely adjustments. A strong, ongoing review process is dialog driven and determines: Is accountability in place? Are milestones and metrics being met? Are original assumptions from planning still accurate? What is going well (poorly) and why? How are our competitors reacting to our strategy?

Even a great strategic plan will fail if not implemented as conceived or is not given time to prove its effectiveness. Great leadership devises strategies that are grounded in fact make implementation a priority and inspire confidence in those who carry them out. They put no less priority on execution and alignment than the planning effort itself. In doing so, the plan moves from the theoretical to the practical and from an intensive and resource-consuming event focus to a reflexive and ongoing part of the organizational culture.

Commerce Matters with Benjamin Akande

Source: The Ladue News Review: Getting to Plan B

Date: Thursday, January 21, 2010 11:08 PM CST

Plan B is a place no one wants to go.  In our society, a Plan B isn’t synonymous with success. Even its name comes off as the also-ran, the ‘next best’ thing or the back-up when all else fails. But the truth is, many Plan B’s are better than their alpha predecessors. The smart executive makes sure they are as well-researched and as well-grounded in reality as any of the other plans before them. And as authors John Mullins and Randy Komisar note in their latest bestseller, Getting to Plan B, those ‘also-rans’ could be your answer to beating the odds to succeed.

To prove their point, Mullins and Komisar load their narrative with examples of successes snatched from the jaws of defeat.  To find one of the most striking Cinderella stories, you need to go to Google. No, I don’t mean its search engine.  Look into its business plan.  Google’s original plan was purely academic, with two students at Stanford trying to find a better way of finding information. They did, and by invitation or word-of-mouth, a following was born. But as the demand for Google grew, so did the need for money to maintain its infrastructure. Creators Sergey Brin and Larry Page found themselves in need of revenue.

Brin and Page considered advertising ‘evil,’ so the several Plan Bs that followed focused on investments and licensing. The results were marginal at best, so Google set out to find a better method that wouldn’t fly in the face of their mantra to provide information to all, not just those who can afford it. The answer was paid listings (well separated from Google’s organic searches), and then a cost-per-click model. To this day, no ads are displayed on Google’s home page.

Throughout its evolution, Google’s executives continually identified ‘leaps of faith’ they were making along the way through each of their new plans for revenue.  The reality is that left unguarded, these untested questions (which many businesses bank on) can easily sink a company into failure.  But, according to the authors, Google survived by recognizing them and seeing how they related to the five elements that determine a business model’s viability: revenue, gross margin, operating, working capital and investment models.

As the economy continues its limp out of the recession, more enterprising entrepreneurs will be forced into the world of the self-employed or to take matters into their own hands and start their own business.  For these, the lessons of Getting to Plan B are invaluable.  This is our year to embrace new ideas, to be bold enough to innovate and challenge conventional wisdom. We are all entrepreneurs looking for the next best thing, whether it is a new product or a better way to do things.  All require a solid business plan that is data-driven, strategic, well thought-out and crafted from the lessons learned from other peoples’ mistakes. By heeding the insight in this book, our second plan or backup may turn out to be the best plan of all.