8 REASONS WHY STRATEGIC PLANS FAIL!!


Did you know that nearly 70% of Strategic Planning fails? 

For a process that presumably receives so much attention, this is an appalling figure.   Knowledge of the pitfalls below will dramatically increase the probability that you will fall into the 30 % of Strategic Plans that succeed during your next Planning Cycle.

There have been at least 50 documented reasons explaining the misuse of strategic planning (ref. Strategic Planning, George A. Steiner).

The most important are listed below while the FACTS are from the Harvard Business Review.

Executive Leadership
1) Top management’s assumption that it can delegate the planning function to a planner.

2) Top management becomes so engrossed in current problems that it spends      insufficient time on long-range planning, and therefore the process becomes discredited among other managers and staff.

3) Top management’s consistently rejecting the formal planning mechanism by making  intuitive decisions, which conflict with the formal plans.

4) Lack of continuity due to turnover of Executive Leadership.  This is particularly a problem with appointees to government agencies but also can be a factor where private sector CEO’s change frequently.

5) FACT-85% percent of management teams spend less than one-hour a month on  strategy issues.

Culture

1) Failure to create a climate in the organization which is congenial and not resistant to planning.

2) Resistance to Change (reference last week’s blog)-People are typically resistant to  change and prefer to stay in their comfort zone. With people who are anti-change, it   would be hard for the organization to successfully push through their strategy. Hence, it is  important that communication of the plans be handled carefully, as well as the proper management of the resistors.

Exclusion

1) Failure to assume the necessary involvement in the planning process of major line personnel especially in the SWOTs stage.

2) FACT-95% of employees do not understand their organization’s strategy

Lack of Integration

1) Assuming that comprehensive planning is something separate from the entire management process.

2) Failure of top management to review with departmental and divisional heads the long- range plans which they have developed.

3) FACT- Only 27% of a typical organization’s employees have access to its strategic plan.

4) FACT-60% of typical organizations do not link their strategic priorities to their budget.

5) FACT- 70% of middle managers and more than 90% of front-line employees have
compensation that is not linked to the strategy.

Excessive Structure

1) Injecting so much formality into the system that it lacks flexibility, looseness, and
simplicity; and restrains creativity.

2) FACT- Many larger organizations don’t have a consistent way to even describe their strategy, other than in a large strategic planning binder.

Poor Execution

1) Lack of a periodic review cycle during the strategic cycle.

2) FACT-90% of well-formulated strategies fail due to poor execution.

3) FACT-according to several surveys of top executives only 19% of strategic plans achieve their objectives.

Lack of Goals and Metrics

1) Failure to develop company goals suitable as a basis for formulating long-range plans.

2) Failing to use plans as standards for measuring managerial performance.

 3) FACT-92% of organizations do not report on lead performance indicators.

Unsuccessful Strategy

1) Failure to develop plan on coherent company strengths and address current weaknesses.

2) Failing to consider competitive changes.

If you use the above as a checklist against which to measure the quality of your planning and execution process, you will dramatically improve your chances for success.

Even though, to adequately write and implementate Strategic Plans is probably one of the most complex and senior activities to execute in a company.

Article by Alexander R. Paruschke (@aparuschke)
Sources: Harvard Business Review

 

Acerca de aparuschke

As a professional service firm with international operations, we specialise in managing complex change solutions for different companies. apcore guides clients through Organisational Changes, Innovation Management and New Business Model Designs, as well as implement Innovative Management Strategies and Internationalisation processes thanks to our expertise and experience in various sectors.
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