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Why strategic planning fails

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Why does strategic planning fail? I hope the assertion that strategic planning does fail is not a surprise to anyone since it would perpetuate another fallacy of planning. The Harvard Business Review puts the ROI of traditional planning at 34% or less. In fact according to several surveys of top executives only 19% of strategic plans achieve their objectives. Perhaps another not so surprising data point is that among those same executives, only 25% of them are even motivated by the plans they create.

Why then do so many organizations devote so much time and energy to the annual ritual of developing or updating their strategic plans if they are doomed to failure from the start. Just think of all of the smart, well-educated, experienced managers and executives devoting so much of their organizations limited resources on an activity with such a poor track record of producing results?

Before I get too much farther allow me to offer a you a great summary on The Predictable Failure of Strategic Planning as just one of many great sources of valuable insights. Another interesting and quick read is Strategic Planning Failure. Papers like this 

would certainly add more value to your planning readiness as an effective counterbalance to all of the gibberish from the planning industry.

But that is not the end of the shocking facts surrounding strategic plan failures and strategy execution: CONTINUE READING


Discussion
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pcalento
Paul Calento 256 Points | Mon, 08/29/2011 - 01:01

Joel's comments make a lot of sense to me, particularly the one about "lack of discipline and focus". Follow-thru is key. But too many organizations reward the creation of a plan, but not the execution of it. Perhaps one of the reason's is what Joel Dobbs calls "the busyness epidemic".

--Paul Calento

(note: I work on projects sponsored by EnterpriseCIOForum.com and HP)

jdobbs
Joel Dobbs 321 Points | Sat, 08/20/2011 - 21:23

Great topic Jerry.

I think that there are two dangers, for lack of a better word, associated with strategic planning.  First, as you point out, organizations fail to follow their plans.  I believe that there are at least three reasons why this happens:

1. The plans are developed in relative isolation by groups of strategic planners who operate in somewhat of a vacum from the rest of the organization.  Strategic planning groups used to be common in companies but, thankfully, have fallen out of favor so hopefully this is rare.

2. Lack of discipline and focus. Plans exist but once completed are never used for making strategic decisions.  Sounds crazy but it happens a lot.

3. Lack of leadership, starting at the top.  If the organization's leader does not consistently communicate the organization's strategies to its employees and key stakeholders they are not perceived as a priority and conveniently ignored without consequences.

At the other end of the specrtum is the situation where the strategic plan becomes a strategic straight jacket.  The company rigidly sticks to their plans at the expense of new opportunities or in the face of evidence that the plan is wrong.  "When the horse is dead, dismount!"  

Strategic planning, done well, is a continuous process that requires the involvement and buy-in of many stakeholders and requires discipline and focus for follow through.  All of those things are hard work, and hard work is hard.

pearl
Pearl Zhu 89 Points | Wed, 08/17/2011 - 15:48

Hi, Jerry, as old saying, it's not plan, it's planning matters, however, toady's strategic planning is more about the plan crafted by a few senior folks a couple of years ago, doesn't convey clearly aross the organizations, put the other way, there's no dynamic links between strategic planning, people, technology seamlessly. In today's dynamic economic environment, strategic planning has to be embeded into the business process optimization, enterprise/IT architecture, and translated into KPI, let all, including front line staff execute it on the daily base. thanks.