Strategic Planning: 12 Common Mistakes (Part 1 of 2)
In a recent post, 12 Common Traits of Companies With Successful Corporate Planning, we examined common patterns of companies experiencing success in their corporate strategic planning efforts. This week and next, we will will examine 12 common mistakes made in corporate strategic planning.
This week, let’s look at the first six common mistakes.
1. The timeframe of the plan is too long
While business strategies should be expected to be steady and relatively unchanged for a longer period of time, strategic plans need to remain sharply focused on accomplishing strategic priorities in a timely manner. The plans also need more frequent refreshing to keep them from becoming stale and to keep the organization energized on plan execution. Long-term planning certainly has its place in a corporate world, but shorter operational plan horizons, going only 12 months out, allow organizations to utilize valuable current information and remain engaged in delivering to the plan milestones. A rolling 12-month plan that is updated on a quarterly basis offers more value to the organization in several ways. As long-term plan goals are partially or fully met, the operational component of the plan moves forward and is refreshed with more accurate and updated information for the coming 12 months. New objectives and sub-initiatives move up as others are completed and move out. This provides actionable data for managers to work from during budgeting and gives executives a more realistic sense of actual plan momentum and progress.
2. Too many strategic goals
Organizations often have a long wish list of goals, ranging from pie-in-the-sky to mundane. Dreaming up goals is generally not an issue. Instead, the issue is having the discipline to narrow down prioritized goals to a manageable and achievable level. Five goals is a good number to consider as a maximum. When you consider that each goal will lead to a sequence of programs, initiatives, activities and deliverables that will need to be managed and implemented throughout the organization, it’s easy to see how a long list of goals can inhibit implementation success.
3. Goals not tied to measurable outcomes
Organizational goals should be constructed in terms of outcomes that will mean something tangible to customers, employees and the organization’s markets served. Likewise, goals should be defined in such a way that they can be measured and managed throughout the layers of the organization. Goals should help propel action and achievement from the managers and workers who will be involved in accomplishing them.
4. Employees are unaware of the goals
Believe it or not, this can be a huge problem in many organizations. When the corporate planning process fails to consider the individuals who will actually implement the plan, breakdowns happen and desired outcomes are rarely attained. Detailed plans of action are needed for each initiative and goals should be carefully communicated throughout the organization so that everyone knows and understands not only the “big picture”, but what is expected specifically of them.
5. Key vendors and partners not considered
By communicating organizational goals to key vendors, distributors, suppliers and partners, much needed buy-in and assistance can be gained from these external parties to achieve desired outcomes. For example, asking for price reductions, extended payment terms, or quantity discounts can be greatly facilitated when suppliers and partners are made part of the process and understand what may be in it for them in the long-run.
6. Plan leaves too much room for interpretation
This mistake typically circles back to the way organizational goals have been defined. If there is ambiguity in the way the goals are explained, they will be easily misinterpreted by members of the organization and will result in execution that misses the intended mark. Starting with a clearly defined outcome, much of this interpretation and resulting ambiguity can be replaced by clearly defined expectations.
Making one or more of these common mistakes can be detrimental to the execution of corporate strategy. Next week we will explore six more common planning mistakes to avoid making during the strategic planning process.