Vol. 1 — No. 2

Successful Implementation of Strategic Planning

You have a great strategy. Now what? Studies say that the biggest obstacle to strategic planning success is implementing the plan. According to a Fortune cover story explaining CEO failures the authors concluded, “In the majority of cases, we estimate about 70%, the real problem is not bad strategy but bad execution.”

Why is it so difficult? There isn’t just one reason. Every organization is a bit different. But there are some general implementation guidelines that, if followed, go a long way to ensuring strategic plan success.

Start with a great plan: Long range strategic plans, when done well, and managed dynamically are not an annual exercise. Usually every three to five years will suffice. Since you are not doing them routinely and they have such a large bearing on how you run your company, do them well. Invest the time to do it thoroughly. Incomplete plans, plans based on poor information or plans done without the proper players make implementation nearly impossible. Too many companies wish to deal with strategic planning in a one day retreat. Good strategic planning is too comprehensive to be well done in a rush.

Get Leadership Commitment: It starts at the top. Leaders, both informal and informal influencers in the company, need to be committed to the plan. Usually that occurs because they are a key part of creating the plan, but not always. If you have a leader who, once the plan is in place, challenges the validity of the plan and can’t be convinced it is the right direction, it may be necessary to ask them to step into a role not impacted directly by the plan. It is hard to rally the troops to support the plan if leadership doesn’t. You must do more than talk the talk but walk the walk.

Pace the Plan: Most strategic plans are long term, require change and often, reallocated resources. Most companies can’t absorb big changes overnight or yield significant results all at once. Companies need to pace their plan—figure out the key initiatives in each time period—creating a critical path necessary for success. Maybe a company has to divest “broken” businesses first, to free capital so they can subsequently invest in new business. Or possibly an organization needs to identify current “best customers” first--figure out who they are and what they want--before they spend to acquire more new customers (without knowing what type of customer they are pursuing). A paced plan allows the organization to see the flow of the master plan and how priorities and resources will shift over time to accomplish the plan. This provides reassurance that the plan is achievable and helps align company priorities.

Establish leading indicators: Many organizations measure outcomes, but leading indicators provide an early warning system of what is working and what isn’t so it can be corrected in a timely way. Most plans are based on assumptions of the future. Many of those assumptions will be right—a few won’t. Leading indicators are measures that help give you insight into why you aren’t achieving the end result desired. A measure like customer satisfaction may help explain why sales are up or down with tenured customers. Or charting the number of web site visits may be an indicator of expected web purchasers. These kind of measures are diagnostic—they help you understand the results you are getting and give you insight into where the problem or opportunities are that need to be addressed.

Link to division and department initiatives: Strategy happens one decision at a time. To have a unified strategy requires each operating area to deliver against an integrated overarching concept. Therefore, each business group in the organization needs to align their activities and behavior to achieving that strategy, using it to define their key initiatives and work plans. Ask each department to show you their before and after…here is what we did before the strategic plan and here is what we will do now to implement the plan. It will be helpful if you have done the pacing first so they can see at what point their operation plays the biggest role.

Align with resources: Because a strategy is a choice about which activities to pursue to achieve your goals, the strategy selected mandates alignment with the resources of your organization. The structure of the company, the skill sets and capabilities, and budgets must reflect those strategic choices. According to an article written by Mankins and Steele titled, “Turning Great Strategy into Great Performance” and published in Harvard Business Review in July of 2005, inadequate or unavailable resources is the most significant factor in companies underperforming their stated goals. Be sure to link these processes with the strategic plan if you want to achieve your corporate plan.

Communicate, communicate, communicate: Just as location is the heart of successful real estate transactions, communication is the key to successful strategic implementation. It is just not possible to over communicate. Create a communication plan that identifies who the key stakeholders are, what message they need to hear to understand the direction and do their part, decide who will tell them and when and how they will be told. Allow opportunity for discussion as it helps provide clarity. And then keep communicating. The average person needs to hear new information seven times before it sinks it. Mankins and Steele say that poorly communicated strategy is the second most pervasive cause of unrealized performance. So what can you do? Communicate every month with new information, updates on progress, successes stories, awards and incentives for success, or other related topics that clarifies what is needed and encourages continued support.