Companies must abandon several common assumptions about planning and execution for a strategy to succeed.
Every year, executives at American corporations dutifully gather together their top brass, lock themselves in a room and go through the time-honored tradition known as strategic planning. After a few hours — or a few days — they emerge with a sacred document that will increase their sales, make their services shine, engage their staff and secure their futures.
Well, at least that’s the story they tell us in business school. In reality, most companies craft a half-baked strategic plan that is only partially implemented and has sketchy buy-in at best.
Based on their research, Robert Kaplan of Harvard Business School and David Norton of the Balanced Scorecard Collaborative estimate that as many as 90 percent of all corporate strategies are not executed successfully. Beyond not being properly implemented, the strategies themselves are often problematic.
Henry Mintzberg, in his seminal 1993 book The Rise and Fall of Strategic Planning, refers to strategic planning as an “oxymoron,” claiming that “the process can straitjacket an organization by stifling innovation and commitment.”
So what’s a well-meaning executive to do if he or she wants to make the most of the strategic planning process while avoiding the pitfalls of poor design and implementation? To start, he or she must understand the four myths that lead to wishful, wasteful or less-than-worthwhile strategic planning efforts.
Myth No. 1: Content Is King
Most executives believe that if you get the content of your strategy right, the success of that strategy is a foregone conclusion. They assume that the substance of the strategy must be composed of realistic objectives and the most accurate and valid information.
In their quest to create a strategy that can credibly stand up to the scrutiny of these criteria — and senior management approval — companies often employ outside experts, such as consulting and marketing firms, to analyze, research and benchmark their industry, competitors and markets. In addition, they use tools such as a SWOT (strengths, weaknesses, opportunities and threats) analysis to help create objectives that address both the past performance and current circumstances of the company. Sounds reasonable. And therein lies the problem.
What goes unrecognized and unaddressed is that no strategy can ever be right or reasonable enough to account for all the events that might emerge on the road to its fulfillment. Not to mention the amount of buy-in required from all levels to deal with those events as they arise. Therefore, perfect content is an illusion that leads to an increasing investment of resources in the pursuit of the one true strategy that will win the day.
In reality, any strategy is only as good as the degree to which the people within the organization are committed to it. Even the most accurate and well-crafted plan will fail if people don’t take accountability for delivering it.
Picture the following scenario: A large national service company spent $2 million to hire a top-tier consulting firm to figure out what direction it should take the company. By conducting a standard SWOT (strengths, weaknesses, opportunities, threats) analysis, the consultants came up with a well-thought-out, several-hundred-page strategy document housed in a beautiful binder — that no one on the management team believed would work.
Even though the company had just spent millions coming up with the “right” content for the strategy, it did not have the environment of trust, partnership and open communication necessary for it to be executed.
Leaders who are looking to generate alignment and commitment behind a strategy cannot rely solely on the content of the strategy itself, but must address the context — the organizational culture — in which that strategy is to be executed. For any strategy to succeed, authentic, courageous communication and ownership is essential.
Myth No. 2: Consensus Equals Success
In the eyes of many leaders, the ultimate level of buy-in for a strategic plan is simply consensus. The belief behind this myth is that if everyone feels pretty good about the plan and has no strong objections, it’s about the best that can be hoped for.
But the problem with taking a consensus-building approach is that it requires settling for the lowest common denominator that everyone can agree with, rather than striving for solutions that challenge current thinking.
Margaret Thatcher, former prime minister of England, once said: “To me, consensus seems to be the process of abandoning all beliefs, principles, values and policies in search of something in which no one believes, but to which no one objects — the process of avoiding the very issues that have to be solved, merely because you cannot get agreement on the way ahead.”
Ultimately, consensus can lead to cynicism and resignation that, when difficulties in execution are encountered, manifest in a chorus of “I told you so,” “If only they had listened to me,” and “I didn’t really believe it was the right course of action.”
In reality, consensus is way too low a bar for the fulfillment of any strategic plan that requires substantial organizational change. There is, in fact, something about engaging in the process of developing the strategy itself that is fundamental to people feeling ownership over it. Input into the strategy but a lack of involvement in developing it may create compliance, but being actively involved in its generation creates commitment.
To generate this commitment, executives need to set the bar to the higher goal of alignment. Reaching this alignment requires putting people’s concerns, doubts, uncertainties and water-cooler conversations on the table so they can be dealt with out in the open. Alignment is achieved when people leave the strategy discussions fully on board with whatever decision the group has reached, with no plan B, no pocket vetoes and no reservations about fully investing themselves in pursuing the agreed-upon direction.
Myth No. 3: Exclusion Is Efficient
The typical strategic planning process is an exclusive affair. Executives often believe that the fewer people involved in the process, the easier it will be. As such, they often limit participation to a small group of business unit heads or the strategy development group.
But putting together the strategic planning team is not a matter of finding the perfect group size — it’s about gathering together the right people. You must include both those individuals who have the best sense about where the organization needs to go and those who are going to implement the agreed-upon direction and objectives.
Unfortunately, it is often an elite group of people who are removed from the day-to-day issues of the business who do the strategy development. While the objective view that these individuals provide can be useful, those who are then tasked with the implementation of the strategy frequently respond to it with skepticism, cynicism, outright disbelief and even resentment. Beyond the emotional cost, the lack of listening to input from those closest to the issues can be an expensive proposition.
While some impatient executives might see this broader inclusion as slowing things down, slower in this case is faster — since doing things right from the start saves time and money and prevents having to do everything all over again.
Myth No. 4: Communication Creates Commitment
Town halls, road shows, all-hands meetings and webinars are all popular vehicles for spreading the word and gaining buy-in once the strategic plan has been crafted. Most senior executives will tout these communication efforts as a critical step in helping the organization understand what the strategy means and what role each person plays in bringing it to fruition.
But while these types of events can generate a significant amount of energy and excitement, they also contain serious pitfalls that can lead to cynicism rather than commitment.
One of these pitfalls is the mistaken belief that employees are empty vessels, just waiting for the word from above about where the company is headed and what they should be doing to help it get there.
Far from being empty, people are already full. They’re full of frustrations and disappointments about what executives have said they were going to do in the past and what they actually did. They’re full from promises made and not kept and from accepting requests to get involved in a company strategy and then being ignored when times got tough.
Employees have little time — or need — for fanfare and hype. What they want to know is that their bosses understand and are committed to addressing the challenges they face in putting a strategy in place.
For example: If staff communicate that a certain supervisor is a tyrant, will management listen and hold that person accountable for demonstrating the values they are promoting? If systems are broken or inadequate, will management hear the impact that this has on staff and make the proper investment to set things right? If staff members are caught in the crossfire of feuding bosses, will the leaders of the company leave them to their warring factions or let them know political gamesmanship won’t be tolerated?
Only by listening to what workers are saying — through both their words and their behavior — will leaders become aware of and able to address the issues that are preventing them from embracing the company’s strategic objectives. When this type of listening happens and action is taken, commitment to the strategic plan follows suit.
Strategic planning is not an accounting and forecasting exercise. It’s not a weekend off-site spent in a room, hashing out who’s willing to go along with what. And it’s not a bunch of words put to paper and placed in a binder. It is a living, breathing, organic leadership action. It requires not a calculator, but the courage and conviction to inspire everyone to be their best and get on the same page. As Academy Award-winning director Francis Ford Coppola once said: “The first step in making a good movie is getting everyone involved to be making the same movie.”