I think strategic plans have gotten a bad rap. If you believe the research most companies don’t even have one even though it is said that over 75% of businesses that fail don’t have a plan.
When talking to people, especially those that don’t have a plan, I often hear, “strategic plans are useless, they are just guesses”.
In doing the background research for my book, “Bottom Line Focus”, I read a lot on the subject and I think I finally understand why plans are perceived as guesses.
Most people simply don’t know how to develop a meaningful plan.
They document some “goals” as to where they want to take their organizations, assign some actions based on those goals and then basically hope it all happens.
Before you can develop a meaningful plan for your organization you need to understand three things very clearly.
1. Where you want the organization to be in 3 to 5 years, in detail. What markets, what products, what your differentiator will be in that market etc.
2. Where you are now. A detailed look internally at your strengths and limitations, as well as externally at your opportunities and threats.
3. What small, timed and clear steps you need to accomplish to get you from step 2 to step 1.
Major organizational changes are accomplished by a thorough understanding of what needs to be done and where you want to go, along with clear accountability and buy in of all concerned.
Like the old saying goes you “eat an elephant one bit at a time”.
In order to get better strategic planning results, you need to spend some time developing a sound strategic planning process. My 35 years of experience has taught me most companies simply don’t know how to plan.
As I mentioned in my last blog post I just finished reading a book entitled “How Toyota Got to be Number 1” by David Magee. He writes in detail of how Toyota’s long-term strategy is based on the single goal of striving to build the best vehicle in the world, and to offer consumers more for their money. Everything they do is focused on that vision.
Most of us think that the Toyota Manufacturing System is the basis for their success; The truth is that is simply one of the many tools they use to achieve their goal of building the best vehicles. The real secret is the culture they create within the organization that fosters employee engagement, and maybe most importantly the expectation that every employee will immediately report problems and take steps to solve them. They strive to develop a culture where everyone’s input is valued and sought after.
This culture is part of their strategy and is found in everything from the hiring process to over a year of training for most employees. The point is their strategic plan states they want to build the best vehicles possible, and they have set goals for every function of the organization that focuses on attainment of that vision. Everyone in the company from production, to management, to engineering and including human resources develops goals that align with the strategic direction, and they constantly review problems that may interfere with attainment of their vision.
The bottom line is if you want better strategic planning results put effort into development of a better strategic planning process.