Why Strategic Planning Efforts Fail
The main reason strategic planning attempts fail is that the Plan was usually never used to run the business, never a living document. The effort remained in one of those annual sessions led by a Facilitator or Consultant, some simulations, a bit of tourism or extramural meetings, and finally the Strategic Plan takes its place of honor in the odd library, where if it has luck can be used as a book holder.
There may be myriad reasons why strategic planning fails, but we will focus on five of them that appear to be the key causes that have been observed:
• Daily Management insufficiently differentiated from futuristic objectives.
• Mission and values not very specific, weakly linked to the organization
• Vague vision and strategies and a weak link with the company.
• Lack of relevant data when the Plan development process was carried out.
• Lack of periodic monitoring and improvement of the planning process.
1. DAILY MANAGEMENT INSUFFICIENTLY DIFFERENTIATED FROM FUTURIST OBJECTIVES
When day-to-day work is not separated from important plans, people have great difficulty balancing resources between urgent and important activities. Because not doing urgent activities causes the most immediate pain, the tendency is to focus resources on those activities that are urgent. Let us remember that of "If we are crocodiles up to the nape of the neck, it is very difficult to stay focused on the primary objective which is to empty the swamp." This joke was not born because it is nice, it was born because each and every one of the people who work has experienced this situation. When the boss meets with them and asks them why such or which objectives have not been achieved, the answer we hear the most is: "I have not had time" or "The day to day does not allow it."
This inability to separate daily work from important goals is one of the biggest reasons for worker frustration. From their point of view, those big goals only add more work to what already overwhelms them. How can they be expected to work on new things when there aren't even enough hours in the day to do their normal job? Until this issue is resolved, there is little chance that we will focus on the overriding goals of our plan. The business will continue to be run in a reactive way, usually attending to emergencies one after another.
To resolve this dilemma, management and workers need to work together to define the essential elements of each department's work, or of each group's responsibility. Resources should then be allocated to support those activities in progress. This means making decisions about those activities that are not going to be supported. Not removing from the plate those things that we are not going to eat can lead to downstream disaster. An adequate balance of resources should not consume 100% of the worker's time. At least 5-10% of people's time should be unencumbered. These uncommitted resources can then be invested in critical areas of organizational growth, or continuous improvement projects.
2. MISSION UNCLEAR AND LIMITED DEPLOYMENT
The best way to effectively separate day-to-day activities from essential activities is to develop an effective Mission. The Mission describes the reason for being of the company, some also call it Purpose. The Mission identifies the clients and those fundamental needs that the company is covering for them. The different internal departments or business units within the company can also rely on their own missions; but all of them must be aligned with the Mission of the company. When people know why they are doing what they are doing and how they support the organization as a whole, they are motivated and able to act independently and creatively to fulfill the Mission.
An effective Mission focuses on markets and customers, not products and services. She must be specific, achievable and motivating. The simplest form of Mission is "To meet the needs of customers Through….". The “The” and “From” part of the Mission describe the type of business the company is in. The “Through” part describes the key strategies that are implemented to achieve the business objectives.
Avoid complicating your Mission with qualifiers, values, measurements, and other "Odes to the Flag." Keep your Mission simple so people can remember it. Check out these two examples below for a fictitious power company:
“Our Mission is to provide quality electric power, with ample response capacity and at reasonable cost to our customers, through a dedicated and talented workforce that believes in teamwork, in being good citizens, in equity, and integrity; and that it is in a continuous search for excellence in everything we do. We strive to achieve the highest levels of customer satisfaction and we strive to give our shareholders an acceptable return on their investment. "
"Our Mission to improve the standard of living of residential and commercial customers in Southern California by providing uninterrupted electrical power"
Which of these missions is most likely to be remembered? Which of them manifests a true focus on the customer? Which of them identifies who and what is the most important? The secret to an effective Mission is to keep it simple and focused on how the customer will benefit from your products and services.
After we develop the Mission, we must deploy it throughout the organization. If the deployment is effective, each and everyone can describe how their work fits into and supports the company's Mission.
Performance measurements also had to be developed at each level deployed. We should collect data to establish typical or normal performance. Once we have identified normal performance, Management can establish boundaries for activities. These radios of action allow the processes to be almost totally managed and managed by the workers themselves. As long as performance remains within expected limits, Management can be confident that performance is normal, and in this way can focus on the most essential objectives of the Strategic Plan.
3. VISION AND STRATEGIC PLANNING VAGUE AND WEAKLY LINKED TO THE ORGANIZATION
The Mission and Business Foundations describe what the company's business is. The Company Vision describes what the business of the future should be. Visions appeal to emotions. They describe the future in terms of metaphors, symbols, and feelings. A Vision is a very powerful image that draws people to it, just as light draws insects in the dark of night.
Before beginning their demanding four-year preparation for the Olympics, the athletes see themselves slowly climbing the steps of the awards podium for the ceremony, feel the gold medal being wrapped around their neck and hear the National Anthem intoned. of his country. On more than one occasion, this Vision will help them overcome the suffering and demands necessary to become one of the greatest athletes in the world. Companies, departments and all elements of the organization also need to have your Vision. The effect is exactly the same; When the going gets tough, Vision provides the motivation and tenacity to support the effort.
Sometimes the Vision is also known as a Strategic Intent. Those who are not market leaders tend to have visions where they beat a key competitor. Market leaders tend to have broader views; For example, the Vision of Coca Cola is: "Make a Coca Cola available to everyone, around the world." McDonalds wants to: "Serve food to the people, wherever they are gathered." In both cases, a visual image is created that points in the direction the company wants to go.
The Vision must guide all organizational change and all improvement activities. The best way to do this is to capture the Vision on a long-term goal. Then we must identify three to five key activities that ensure the Vision will be achieved. This long-term plan is the starting point for the annual planning process. The annual plan identifies the essential things we must accomplish this year to achieve the Vision. All other critical activities and processes must then be deployed in all necessary areas of the organization. The owners of these critical activities and processes must be identified and assigned to then develop performance measurements that will allow us to monitor progress.
4. LACK OF AN ADEQUATE ANALYSIS OF THE DATA DURING THE DEVELOPMENT OF THE PLAN
Many of the Strategic Planning sessions take place outside the walls in an intense two or three day session. Although this technique gives excellent results to improve the teamwork of the management group, since the event is separated from the source of information, we rarely have dynamic access to the necessary data, which leads to opinions taking the place of the dating at these meetings. The person with the best communication skills (often the one with the loudest voice) tends to dominate and influence the direction of the group. Consensus is difficult because it is not easy to separate the opinions of those who express them. For example, if you hold someone's opinions very high, it is very likely that you will mistake their opinions for facts. On the other hand, if you don't trust someone,You are likely to mistake your opinions for hidden agendas or confusing motives.
A good technique to incorporate a good flow of data into the planning process is to hold meetings in the company, where the data is accessible. Instead of a single intense session, consider holding multiple meetings in a one to two week period. When data is presented and analyzed, it is common for it to answer many questions as well as generate new questions. By holding a series of short meetings, concerns drawn from the data analysis can be clarified with new information or analysis at the next meeting.
Each company has a particular type of data for its planning process, but in general, the cat must cover the following key areas:
• Sales and its trend.
• Customer satisfaction and trend.
• The competitors and what direction they are taking.
• Technological trends.
• Trends in product and service providers.
• Key competitive advantages of the organization.
The data in each of these areas should be segmented and analyzed until the existence of certain key opportunities are obvious to all participants. Focusing on data allows individual personalities to be removed from the decision-making process; as well as it strengthens the capacity to convince the members because the decisions can be supported by the available data.
5. LACK OF PERIODIC MONITORING AND IMPROVEMENT OF THE PROCESS
No matter how extraordinary our plan is, if its progress is not evaluated periodically, the plan will fail to precipitate the required change. People want to work on those things that are important. If nobody asks about the progress of the plan, people will perceive that the activities derived from it are not important. The follow-up process is perhaps the most important step in the planning process.
Effective follow-up must be put on the agenda. A follow-up meeting schedule is a good way to communicate when the follow-up will take place. People need to know that monitoring will always occur, and that they are expected to present the status of the Fundamental Aspects of their area, and also of the Future Goals for which they are responsible in the strategic plan. The old adage is valid: “You. inspect what you expect ”. If Management does not show that it values the monitoring process, the employees will not value it either. Infrequent follow-up or just a low and shallow flight over the evaluated aspects implies that the topics are not important. Nobody wants to work on something that is not important.
In general, effective monitoring must consider the following aspects:
• Must be driven on a regular basis.
• Come as is, no fancy introductions needed.
• Use real data to evaluate performance, do not use opinions or anecdotes.
• Maintain an honest and open climate.
• Evaluate the basics of the business first, followed by information on activities deemed essential for the future of the plan.
It is important that the monitoring process includes specific data. It is very easy to include statements such as: “we have made progress” or “we will continue our efforts”. If we allow these insights to be made in follow-up meetings, we will find that they will start to show up at every evaluation and we will have no objective evidence of true progress. Using valid indicators to measure progress helps us to focus on the essentials, to make statements such as "Why haven't we achieved the goal?" The discussion that follows will provide insight into those aspects that help us explore alternatives for improvement.
When conducting an evaluation, it is important for the Manager to maintain a calm and non-threatening attitude. If we attack the owner of the process every time a goal is not achieved, our attitude will lead him to omit information that he may consider negative for his performance, which destroys the evaluation process. Creating a climate of openness, honesty, and support is the responsibility of the Manager.
Effective follow-up evaluations require the process owner to bring all necessary support data to the meeting. The Business Basics should be evaluated first. Generally these aspects will be behaving as expected and therefore this part of the follow-up process should be relatively quick; you don't need to spend too much time on things that are going well. On the other hand, if the performance of a basic aspect of the business exceeds the expected limits during the evaluated period, the owner of the process must describe the situation and the actions taken to solve the problem and prevent it from recurring.
After reviewing the Basics, progress towards achieving the Futuristic Goals should be evaluated. This evaluation should be done by comparing what was expected to be achieved against what was actually achieved. Any deviation should be analyzed in depth until its root cause is found. Based on the understanding of the root cause, the implications for the future should be discussed until agreement is reached on the expected results in the period contemplated until the next follow-up.
As the year progresses, it may become obvious that the original goals are not going to be met. This can be caused by changes in the business environment that require changes in plans; or also for the fact of having underestimated the required resources. If this occurs, the monitoring process should be used to document the changes rather than recreating a new Annual Strategic Plan. Doing so will prevent it from being unnecessarily modified or set aside because it no longer reflects the current situation.
Summary
Strategic Planning is an essential element of business success, but many companies do not use it effectively to guide their business activities. Some of the main reasons include mixing the basic or everyday aspects of the business with future activities, Missions and Vague Visions, misuse or non-use of data, and lack of monitoring and tracking of progress.
Each company should evaluate its own planning process and determine if it is being used effectively. If the planning process is not producing the desired results, then the process should be changed or improved.
The recommendations and techniques presented in this work are offered as solutions for the most common causes of weakness. However, the most important point is that companies should continue to modify and improve their planning process until it becomes an integral part of their business process.
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