Friday, October 30, 2009

Two Factors for a Successful Strategic Planning Office

The very idea of a Strategic Planning Office is antithetical to the successful practice of strategic planning in historical application. In the 1970's GE had hundreds of strategic planners on staff who worked tirelessly, but achieved virtually nothing.

The very idea of a "separate" office is a dangerous one. SPO's typically should perform two major functions. 1) Conducting critical research on trends. Surveys, collecting data, investigating changes in the industry and broader world environment. 2) Facilitation of organization-wide and departmental strategic plannign processes. So, why is this dangerous? 1) The separation of strategic planning from the people who need to execute it means that the very people who need to own the plan are merely recipients of the plan from someone else. Without ownership, they are not likely to succeed. A separate planning department is unable to monitor and adjust as well as the "doers" who are carrying out the plan. Plans that are static and don't follow leading indicators or make mid-course corrections in view of changing environments are bound to fail. 2) Data collection by a third party, unrelated to the key performance of a plan will likely be data that reinforces the status quo. What is needed, is a wider worldview that stimulates innovative and disruptive thinking. Third party research rarely accomplishes this goal.

This not to say that external SPOs cannot succeed, but rather, that they must be structured to 1) guide and support the planning process from within the teams who are carrying out the plan 2) their process encourages innovative and disruptive thinking and guides teams through tough decisions that may challenge current power structures and fiefdoms within the organization, 3) the planning process must be viewed as continuous, not as something the SPO performs once a year, 4) project teams must be responsible for continuous monitoring, measurement and adjustment of the plan as situations change, 5) teams must think of strategic planning as their means to "create" a future rather than simply carrying on business as usual or responding reactively to internal and external environmental impacts.

Malcolm Gladwell speaks in both Blink and Outliers about the need for extraordinary experience nad expertise to spot subtle changes and trends. Strategic planning specialists must understand that their expertise is in facilitating information sharing and process for people who have spent years in gaining specialized expertise. A good SPO will leverage that expertise for the organization when the proper relationship exists.

Friday, October 9, 2009

Ten Challenges and Ten Solutions (abbreviated)

Here are the short lists of the top ten reasons for strategic planning failure and the top ten steps to bridge the execution gap.














Ten Challenges to Traditional Strategic Planning

  1. Failure to "plan for planning"
  2. Informal vs. formal strategic planning
  3. Failure to research trends
  4. Assume one vision for the future
  5. Failure to communicate the plan
  6. Failure to align individual's action plans to the organization's objectives
  7. Failure to assess competency gaps and address with hiring and training
  8. Organizational structure and processes do not support the plan
  9. Failure to reinforce the plan with all stakeholders on a regular basis
  10. Failure to develop and track detailed performance metrics


Ten Steps to bridge the execution gap

  1. Plan the process
  2. Trends and Future Scenarios
  3. Mission, Vision, Values
  4. Objectives, Strategies
  5. Metrics/Dashboards
  6. Communication Plan
  7. Organization/Process Analysis
  8. Competency gap analysis
  9. Alignment, Prioritization,individual Action Plan
  10. Execute, measure, reinforce

For more detail, see http://strategicscenarios.com











Monday, October 5, 2009

Top Ten Reasons Strategic Planning Initiatives Fail


During the past few decades numerous surveys have shown that between sixty and eighty percent of organizations fail to achieve the targets set in their strategic plans.1 Those are not good odds and it begs the question, where does the strategic planning process fail?

Part of the answer may be found by asking ourselves "what is the strategic planning process" and what does "failure" mean?

Traditional strategic planning involves a facilitated session that results in some kind of documentation of the organization's Mission, Vision and Values, then the Objectives and strategies needed to achieve the objectives. These five elements are the key components to any strategic plan. Any organization who has developed these five things is far ahead of those who have not. They have clearly defined who they are, what they do, where they want to go and how they want to get there.

The problem is that even the most well developed strategy is not worth much if it is not linked to execution. I have heard of many strategic plans that, when complete, go immediately on the bookshelf only to gather dust until next year.

A successful strategic plan is one that not only lays out strategy for the firm, but that also includes an execution plan that is built into and linked to the strategic plan.

"If 90% of organizations fail to execute strategy, that's a problem" David Norton
So, if we look at the top ten reasons strategic plans fail, all of them have to do with the unmet needs of tying strategy to execution. Here is the list:

1) Organizations fail to "plan for planning". That is, they make assumptions about what a strategic plan should look like (e.g. the five elements), who should be involved, what the steps are, how long it should take, how much it should cost, and what the organization needs to know before it can embark on planning.
2) Organizations that use informal strategic planning. Informal strategic planning is typically a "business as usual" approach that may accompany development of the firm's annual budget. Formal strategic plans are not written down, but may be discussed at high levels in an ad hoc fashion.
3) Don't do the homework. In order to break out of the status quo, organizations need to do a significant amount of homework before strategic planning in order to understand where they truly stand in relation to trends worldwide, in their industry and internally to the organization.
4) Assume one vision for the future. A strategic plan that is a "forecast" for the future is bound to fail when that future fails to materialize. Nobody can predict the future consistently and with accuracy.
5) Don't communicate the plan. Some organizations are either lazy or feel their staff don't need to know the strategic plan. Others feel that the secrecy of the strategic plan is needed to protect proprietary ideas. Others don't realize the benefits of sharing the strategic plan not only with management and staff but suppliers, clients and others who do business with the organization.
6) Failure to align. If the strategic plan is written and lives in a bubble in the executive suite without being integrated into each and every employee's action plan, then the objectives in the plan are not likely to be carried out. Alignment harnesses the power of everyone working together towards the same goals. Alignment answers the WIIFM (What's In It For Me) question when employees understand their compensation will be based on measurable results of their actions towards achieving the organizations' objectives.
7) A culture of metrics. Metrics are the key to execution of any strategic plan. When properly based on benchmarks and baselines, metrics make the vague strategies in the strategic plan very explicit. Until specific measurements are identified and regularly carried out, most staff will not have any idea what the strategic plan is all about.
8) Continuous reinforcement of the plan. Change is difficult and people tend towards their comfort zones. The changes that a strategic plan demand are not likely to occur during a single meeting to discuss the contents of the new strategic plan. The plan must be continuously reinforced during ongoing decision making processes, monthly metrics reporting, employee reviews, company newsletters and other media throughout the year.
9) Organizational Structure. What if your strategy is to streamline operations by eliminating silos around product lines? If you don't make part of your strategic planning process include organizational restructuring to match the strategy then the strategy will fail.
10) Competencies. Organizations have competencies and the individuals within them have competencies. During times of change you will need to perform a gap analysis to understand the gaps where existing skillsets do not meet the skills needed to execute the new strategies. Without employee development and/or strategic hiring, your strategy will fail.



1 The Execution Premium: Linking Strategy to Operations for Competitive Advantage, Robert S. Kaplan, David P. Norton. Harvard Business Press, Boston, MA 2008

Sunday, October 4, 2009

Notes from Your Strategic Planning Office

Google the term "Strategic Planning Office" and see what you find on the first few pages. Military, state and local government agencies, cities, universities, and more. Each of these organizations has a Strategic Planning Office (SPO) whose sole purpose is to facilitate, create and manage the strategic planning and implementation process.

The SPO is an interesting concept when you think about it. Its existence is based on a vision of strategic planning as an ongoing function that has its own raison d'etre, like any other department in an organization. The SPO serves the organization and all of its departments in the same way that, for example, an Information Technology department does. IT has no reason to be, save for serving the information management needs of the core business functions. The SPO acts as a specialized support organization within the organization to care and feed the strategic planning process.

Take a look at some of the links you see on the google search. The sophistication of the SPOs vary significantly where, in some cases, the SPO is not really an "O" (office) at all, but rather an ad hoc committee. (University of Iowa) In others, there may be two people who work in the office of the president or provost of a university. (UNM) At Stanford Medical School, there are six full time team members and at University of Sydney, there are sixteen. What do these people do?

The SPO fills in the gaps most commonly left unaddressed by organizations that do create formal strategic plans. The major areas they address include: research, facilitation, advice and consultancy to leadership, metrics data collection and statistical analysis. These are many of the areas which, when they are either assumed, or are dealt with on an ad hoc basis, lead to failure of strategic planning efforts in less sophisticated organizations.

This blog shares ideas about strategic planning from the point of view of an outside Strategic Planning Office, specifically Strategic Scenarios, LLC. which operates as an external SPO for organizations who do not have the internal capacity to conduct these functions in house on a full time basis, yet which see a need for strategic planning that actually gets executed, resulting in the ongoing strategic advantage of the firm.