If you want to grow, refine or even define your business, a strategic plan is a must. It determines the purpose of your business, sets a vision for the future and determines specific steps to get there.
Most senior executives understand the value of strategic plans and are willing to invest significant time and resources to develop them. However, all too often strategic plans fail to deliver on their vision. In fact, by some estimates 70 percent of strategic plans fail.
What makes for a successful strategic plan? After 20 years of facilitating strategic planning for dozens of organizations, I have come to understand that regardless of the industry, company size or current market conditions, strategic plans require the following six characteristics to succeed.
Six must-haves for successful strategic plans
Must-have 1: Senior management collectively owns the strategic plan
In most organizations each senior manager has a silo or line responsibility under his or her purview. In strategic planning, however, the entire senior management team must come together to recognize their collective ownership of the overall vision and strategic direction of the entire organization. To make this work, it’s advisable to have each senior manager’s compensation or bonus structure be tied to the organization’s execution of the plan as a whole, not just that of an individual department or area.
Must-have 2: The strategic plan is inclusive.
We often see strategic plans developed by CEOs or senior management teams and then cascaded down their respective organizations. This approach rarely works because the people on the ground—those ultimately responsible for executing the nuts and bolts of the plan—haven’t had input along the way.
The best plans make space for employees to be heard and to contribute to the plan as management begins to design tactics that will deliver on the vision. People respond better and feel ownership when they feel respected and included. What’s more, input from people on the front lines is invaluable because it grounds the strategic plan in the practical realities of the workplace and culture.
Must-have 3: The strategic plan incorporates operational realities.
Many organizations struggle to acknowledge their challenges and weaknesses. Without a candid assessment of the organization’s landscape, a strategic plan will not be effective.
With strategic planning, there’s an entire marathon between the starting blocks and the finish line. An organization’s operational realities will dictate the best way to run that marathon. If you don’t know your weaknesses, you will hit the wall before you even get to the five-mile marker.
Must-have 4: The strategic plan includes specific and tangible actions assigned to individuals.
We typically see an organization’s senior management team go off-site and create grandiose strategic plans that sound great in principle. However, when those same mangers get back to their desks, the operational realities of their jobs take precedence. Day-to-day tasks sideline many of their inspired plans and ideas.
The best strategic plans are extremely detailed. They drill down to the specificity of who will do what by when—and then not only hold those individuals accountable for delivery, but also provide them with the resources to do so.
Must-have 5: The strategic plan incorporates specific measures to evaluate progress.
How will you know that your strategic plan is a success?
It’s amazing how many organizations don’t ask themselves that question. In the majority of cases, organizations have to spend a few years just laying a strong foundation—they may have to build or refine a team, put in place systems, develop partnerships or more. This often means that monetary results don’t come quickly. So, how do you know you’re on track? How do you appease a board of directors that might be looking at the bottom line as an indicator of success?
The best strategic plans build in regular quantitative and qualitative measurements and milestones. In addition, those milestones must take into account not just whether an action was completed, but that it was done well.
Must-have 6: The strategic plan is linked to the organization’s profit and loss statement.
To be effective, strategic plans must be grounded in economic realities: planning takes considerable time and resources, embracing dramatic change can be expensive, and plans need to be funded and marketed to be successful. All these factors have associated costs that affect the profit and loss of the organization over both the short and long term. It’s essential that organizations understand these costs when devising and approving goals and actions.