My friend Lewis Green wrote an article on this subject in 2007, part of which is included in this article. Since that time, the economy has tanked and many businesses have tossed out their strategic plans. Some have even tossed out their bosses. As companies struggled to stay alive, they have focused on cost cutting. Some bosses have been smart enough to lead the development of a plan that is in tune with their current realities while others have just cut. The “cutters” are and will be in trouble
Lewis asked “Is there anyone in business foolish enough to claim strategic planning always achieves your goals and results in success?” Certainly, having the plan alone will not result in success
Management consulting firm Marakon Associates and the Economist Intelligence Unit surveyed senior executives at 197 companies. Respondents said their firms achieved only 63 percent of the expected results of their strategic plans. And in a white paper entitled Three Reasons Why Good Strategies Fail: Execution, Execution, Execution, which carried the above research, Wharton management professor Lawrence G. Hrebiniak says MBA-trained managers know a lot about how to develop a plan but very little about how to carry it out. “Most of our MBAs receive great training in planning but far less in execution,” explained Hrebiniak.
Based on my experience, these findings are correct. When a plan is developed and that is missing so often, the failure comes from poor execution. Execution with brilliance comes with experience.
Some say that executives can not always be held entirely responsible. As long as shareholders and board members insist upon short-term results, only the most powerful and fearless executives will reap the long-term rewards and margins that strategic planning can deliver. But isn’t that the challenge for CEOs. That is what is causing the lifespan of CEOs to become shorter and shorter and the need for turnaround executives to come in and rescue the company.
So how do we as CEOs, executives and senior managers most effectively use strategic planning and get the desired results from it?
• Do annual strategic planning to provide overall direction but make monthly adjustments to stay current. You will be amazed at how quickly your business plan can be outdated. This applies to all businesses—whether a sole proprietorship or a mega multi-national corporation. While this provides a longer term direction, it takes advantage of flexibility and resilience.
• Be confident. Set high goals, short and long term. Don’t be intimidated by the Street or the Boardroom or your own fears. Those who merely set goals they can easily make never get around to stretching the business to achieve higher margins and outstanding profits.
• Use metrics to measure every goal in every functional area.
• Align every department, function and employee so that every ounce of the business’s energy is directed at achieving the goals set within the business plan
• Tie pay and benefits directly to success or failure.
• Do not focus on cost cutting. Make the focus of the plan marketing and sales. Companies have to operate cost effectively, but without revenue there is no company,
• Communicate, communicate, and communicate! If you want your plan to succeed, every member of your culture must be engaged and informed.
Turnaround management is about identifying the issues and opportunities, creating winning plans and then executing to satisfy both the short and long term objectives. So stop blaming the plan and the boss and start turning the business around.
Let me know how you are doing or how I can help.
Maver Management Group