Whether companies operate on a fiscal year or not, the period between Labor Day and Thanksgiving is often when they establish plans for the upcoming year. Most of those plans fail. Depending on which study you follow, the statistics range from a dismal 3% of companies whose executives say they are successful at executing their strategies to at best about one out of every three organizations that integrates its plans into its daily operations with high effectiveness.
I’ve led nearly 200 strategic planning sessions throughout the U.S. and Canada in dozens of industries. Usually when I’m first brought in, I quickly discover that one or more of four fatal flaws is preventing the organization from achieving its long-term objectives.
There are many reasons most plans fail. Here are those top four, from least to most important:
4. Belief that a budget is a plan.
When planning is approached as a budgeting exercise, there can be a tendency to fill in the numbers on a spreadsheet based on a mindset that says, the people are in place, other costs are givens, the work is what it is, so here’s the number for next year. High-performing companies budget, too, of course, but they use the planning process to give them something more: a springboard for identifying and evaluating new opportunities, considering new strategies, and discussing objectives that may at first seem unattainable. The planning process also should be expected to identify people, processes, and programs that no longer serve the enterprise or are inefficient. It requires trust first, planning second, and budgeting third.
3. Reluctance to address big issues.
In the excitement of using the planning session to articulate a vision, agree on priorities, and develop a road map for success, leaders too often fail to spend time reaching agreement on the current situation. To achieve the objectives you and your team say you want, you must talk about all the obstacles to high performance. Alignment does not mean absence of conflict. Just the opposite. Authentic alignment is achieved only when conflict is encouraged, options for resolving that conflict are weighed, and a solution is reached that all leaders support. Debate is healthy, though argument is not. And for healthy conflict to occur, leaders must trust one another. You can’t talk openly and candidly about problems, fears, and controversy with people you don’t trust and care about. When trust is present, you and your team can focus on fixing problems, replicating successes, and carving up sacred cows. Absent trust, your planning process will be a waste of time.
2. Getting too complicated.
The thicker the plan, the more likely your failure. In the spirit of the Broadway producer who advised the writer to condense the summary of his play to fit on the back of a business card, keep your plan simple and short. Don’t write a plan with dozens of pages. Rather, spend your time gaining commitment among your leadership team on what must be accomplished and how your objectives will be met. Invest the time you save in planning on execution, because executing the plan will take everything you’ve got. I’ve developed a one-page template I call the Migration Chart to help leaders convert their ideas into the priorities they must address as their organizations migrate from Point A to Point B. What they put there is not the final plan, but it forces them to first agree on what matters most. (You can download the Migration Chart for free here.)