Strategic Planning: 4 Common Mistakes Executives Make

Strategic Planning Defined:

If I asked 10 executives to define strategic planning, I would likely receive 10 different answers.  At Brixey & Meyer, we define strategic planning as the process that links the organization's objectives and goals to the resources and actions required to achieve them.  At its core, strategic planning is the combination of strategy--how an organization acquires, organizes and deploys assets to create a sustainable competitive advantage, with planning--the process of thinking about and documenting the activities required to achieve desired outcomes.

Common Mistakes in Strategic Planning:

Many organizations engage in some type of strategic planning.  Unfortunately, even with a strategic plan in place, most still experience less than optimal outcomes due to very common mistakes and omissions.  Below are 4 of the most common mistakes made by leaders in the strategic planning process:

1. Mistake #1:  Leaders confuse goal setting for strategic planning

Too often, leaders believe that goal setting is equivalent to strategic planning.  They spend time formulating clear goals such as "we want to grow revenue by 25%" or "we will be #1 in our market by the end of 2015."  These clear goals are an important component of the strategic planning process and they provide the organization with a necessary definition of success.  However, goal setting alone is insufficient.  It doesn't define the actions necessary to achieve success nor does goal setting give critical insight into resource allocation, project prioritization and asset utilization.  There is an old quote that says "a goal without a plan  is really just a wish."  Goal setting, when not included in the context of a broader strategic planning process, is often just wishful thinking.

2.  Mistake #2:  Leaders treat strategic planning like a one-time event

While many organizations have strategic plans, few run their operations with a continuous planning process. Instead, leaders view planning as a one-time event that is completed annually. This is typically accomplished in an offsite session or in full-day planning meetings. Senior leaders huddle together, discuss issues facing the business and compile “next year’s” strategic plan. As soon as the strategic plan is finalized, the whole document is shelved and begins to gather dust. It is rarely referenced and doesn’t serve as a reliable roadmap for the organization. Treating strategic planning as a one-time event limits its usefulness, breeds cynicism in the organization and fails to provide a valuable operating framework for decision making. 

3. Mistake #3:  Leaders create strategies that are overly generic

As stated earlier, a strategy is how an organization acquires, organizes and deploys assets to create a competitive advantage. Target Brands, Inc., the retailing giant with the nearly ubiquitous red logo, is a company that successfully leveraged its existing retailing assets to build a remarkably successful business. Target is now the dominant player in the “upscale discounter” market, a market that didn’t exist until leaders at Target deployed a very unique strategy to create it. Too often, leaders fail to fully capitalize on the unique assets owned or controlled by their organization. Leaders settle for generic approaches---“we’ll be the low cost provider” or “our customer service will be unmatched”, rather than devoting the time and energy necessary to create tailored strategies that leverage unique assets and capitalize on viable market opportunities.  

4.  Mistake #4:  Leaders fail to implement strategic plans

Recently, The Economist Intelligence Unit conducted a study of almost 600 C-level executives and senior managers. The study showed that, while 88% of executives agree that it is very important to the future success of their organization that they successfully execute strategic initiatives, only 12% rated their organizations as excellent in actually delivering strategic initiatives. This disconnect between knowing and doing shows how challenging strategy execution can be. The study noted that the leading causes of strategic implementation failure are a lack of change management skills, inadequate allocation of resources and a lack of project management skills---all internal factors within an organization’s control. And failing to deliver strategic initiatives with excellence has a dramatic impact on financial and other key results, as lower tier strategy implementers reported vastly inferior business outcomes

A Better Way to Do Strategic Planning

To start, ensure that your organization’s goals are more than mere wishes by conducting goal-setting within the framework of a broader strategic planning process.  Implement a formal strategic planning process that is part of the natural, continuous operating cycle of your organization. Develop specific strategies that leverage your organization’s unique assets and take advantage of your rare market insight. Finally, focus on implementation. Assign resources with the necessary skills and available bandwidth to execute effectively. A simple, well-executed strategic plan will generate significantly better results than a complex plan that is poorly implemented. What strategic planning mistakes have you come across?