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