In my last post I summarized the top 4 reasons why 9 out of 10 Strategic Plans fail. But you don’t get rewarded for predicting rain, you get rewarded for building an ark. So how do you ensure that you achieve your strategic plans? How do you keep everyone moving in the same direction? How do you get the most out of everyone’s efforts? How do you make sure that every day you take another significant step toward your most important enterprise goals?
Making your Strategic Plan as focused and as simple as possible, but not too simple, is the quick answer.
Evaluating the winds and currents
When setting direction, you have to examine all of the issues that will have an impact on your journey. You look at the voice of your customers, employees and shareholders to analyze your strengths, weaknesses, opportunities, and threats. This in-depth analysis of information from inside and outside your company is essential for charting the right course in a fast changing world. When conducting this analysis, it is critical to give top priority to customer feedback since every companies future ultimately depends on its ability to serve customers better than the competitors.
As an example, your overarching goals for each of your major constituents could be:
- Customer: the “provider of choice” as measured by customer delight
- Employee: the “employer of choice” as measured by employee satisfaction levels
- Shareholder: #1 in Shareholder return
- Community: “highly valued member of community” as measured by philanthropic contributions
Measuring your progress
Once you’ve established your overarching goals, you need to make sure that you develop strategies that really drive the business forward. I like to use the “rule of 3” – no more than 3 major strategies for each identified goal. You will also need to develop concrete metrics with breakthrough objectives for each strategy that can be monitored on an ongoing basis, like a speedometer or mileage gauge.
As an example, one of the strategies that you establish to become the “employer of choice” could be:
- Retain the best employees. We will retain outstanding performers at every level of the region by developing a spirited, team oriented culture and work environment that combines exciting professional challenges with opportunities for professional growth.
- Performance Metric: Employee Retention
- Current Performance: 82%
- Benchmark: 95%
Turning long-term strategies into short-term tactics
OK. You’re making progress because you’ve defined clear-cut goals, strategies and metrics for the entire company. Now it’s time to analyze the gaps between current performance and the benchmark by utilizing tried and true quality tools and six sigma to develop improvement initiatives to close the gap (see Power Tools for a short list of these invaluable quality tools).
- Retain the best: Using my “rule of 3” again, identify the top 3 tactics to close the gap in the coming 12-18 months. NOTE: Just as with strategies, choosing more than 3 tactics greatly diminishes your chances of making any progress due to resource constraints, lack of focus, etc.
- Recognize and reward outstanding performance at every opportunity.
- Create an inspiring and competitive team environment by establishing bold objectives and enabling employees to achieve them.
- Sharpen focus on results by sharing and publicizing them throughout the region.
Getting everyone on board
Once you have identified the tactical plan for the upcoming year, you need to deploy the objectives throughout the organization using a concept called the “time span of control”. For example:
As the leader, you are focused on delivering the year.
→ Your management team has to deliver 4 good quarters to achieve the annual objectives.
→ Their team has to deliver 3 good months every quarter.
→ The front line leaders have to deliver 4 good weeks every month.
→ And each employee has to deliver 5 good days each week.
Approaching deployment of your objectives in this manner ensures that everyone in the company knows how they connect to the strategic goals. It also identifies the budget required to achieve each tactic and it identifies where your incentives are mis-aligned.
Going back to our “employer of choice” example, one of the tactics to “Retain the best” was to recognize and reward outstanding performance. Formalizing this tactic could be as simple as an agenda item in every front line leader’s weekly meeting or an employee of the month program. Establishing a budget for the reward program is also important.
Developing a simple document to serve as your compass
When you complete this integrated planning process, you publish a simple straightforward, Simple 3 Page Strategic Plan (remember, I did say simple!) that lists your vision, goals, strategies, and top priority tactics. It also includes a scorecard for tracking progress to the goals.
This document becomes the official company-wide strategic plan that sets the direction each year. Another thing, everyone gets a copy. It’s short, crisp, and it’s meant to be that way. After all, the goal isn’t to list every activity at your company. The purpose is to help everyone focus on the top priorities for the upcoming year as you journey to your five-year goals.
Results-oriented management process
While winning strategies and tactics are important, you can never forget that the best plan in the world is only ink on a page. The real challenge comes in putting the plan to work – and making it work. You need to implement a disciplined way to convert this good work into breakthrough results. This is where the “time span of control” comes in handy again.
Each management level described above has to develop a management process around their “time span of control” to ensure that you have chosen the right tactics and they are delivering the predicted results.
Just as before, the objective is to deliver the annual objectives as part of the 5 year plan.
→ Every Quarter the Board and the investment community requires the leader to provide a status to ensure progress to the annual objectives.
→ To ensure those quarterly calls go well, you need to conduct Monthly Operational Reviews with your Management team to make sure they deliver 3 good months.
→ Your Management team establishes, for example, weekly Sales meetings to ensure that they deliver 4 good weeks.
→ And each employee knows what they have to do each day to ensure they deliver 5 good days.
The reason this approach works so well is that it specifically addresses the four reasons why strategic plans typically fail as I outlined in the first post. The simple communication document ensures every employee knows the plan. The results oriented management process keeps the management team focused on performance against the goals. And lastly, the “time span of control” formally deploys the goals, identifies budget needs, and establishes the right employee incentives.
Adding everyone’s “favorite” tactic to the strategic plan is easy (and good for the makers of 3 ring binders) – making hard choices is not. Following the “rule of 3” keeps the plans focused, short, and crisp. This limit on strategies and tactics will also force your organization to focus on the few things that will move the needle the most.
I think we can do much better than a 10% success rate on our strategic plans. What do you think?
- How to Achieve your Strategic Plan: Part 1 of 2 (perpetualinnovationmachine.wordpress.com)