Hi, I’m Steve Davis, and I want to talk to you about why most strategic plans fail.
Now, I’ve literally been in hundreds of strategic planning sessions at both small companies and big companies and most of them fail. The problem is at most of these strategic planning sessions, the people in the meeting only focus on
what marketing and sales tactics they’re going to use in the coming year. They never discuss what the key issues are.
Adapt or Die
For instance, one of the key things the company should always ask themselves every year that they do strategic planning is this: Does our business model still make sense? The thing is, businesses and markets are not static. They’re vibrant. They’re dynamic. They’re living. Some never challenge the status quo. You have to be willing to do that.
That’s one reason why I love Jeff Bezos—because he’s willing to cannibalize whatever he’s doing at Amazon to ensure the long-term viability of the company.
So basically when it comes to strategic planning, your motto should be, “We need to adapt—and continuously adapt—or die.”
Talk to Your Customers
One thing you should do as part of your strategic planning process is to really get out there. Talk to customers you have. Talk to customers you lost to find out why you’re losing business. What is the reality in the market? Unless you understand what the reality in the market is, you can’t come up with an action plan for growth.
If you are in a crisis mode, if sales are down, sales are flat, if your product launch has gone bad, if you’re in a downward spiral… like Winston Churchill said, “Never let a good crisis go to waste.”
A Change Everyone Supports
If if you’re going to change your company’s direction, you have to have very clear objectives that everybody can understand and get behind.
When you have your strategic plan and it’s very comprehensive, you may find that it’s much easier to implement if you take an iterative process rather than go whole hog and jump in with both feet. This way, it’s easier for you to implement throughout the entire organization, easier for your customers to comprehend, and easier for your salesforce to adapt. In most cases, it’s best to go with an iterative process as long as you have a vision for where you see your business in the long term.
Transparency: Keeping Your Company on the Same Page
Another problem: lack of transparency. People don’t like change. That’s why they protect the status quo. The only way to get around that is to have open, transparent communications.
In a couple turnarounds that I did early on, we have weekly get-togethers, weekly fireside chats with the troops on what’s currently going on and what our general thoughts are. You want everybody to back you. You want everybody to get in the same boat rowing in the same direction. It gives them a comfort level.
After all, what happens if things are going wrong and morale really tanks? It will tank if you’re in a turnaround situation. Your best people are going to wind up leaving, and that’s the last thing that you need is key people of the organization leaving you and you’re trying to redirect the company.
Celebrate Small Victories
So one thing you should do is celebrate small successes along the way. Companies in turnaround situations don’t do that. So when you get a small success, celebrate it. When you have a new product release, celebrate it. If you get a new key account, celebrate it.
Strategic planning is not the end-all be-all. You need to understand everything it goes through to make it successful. Key communications is really, ultimately what makes a strategic plan successful throughout your organization.
Know it. Embrace it. Communicate it. Then you’ll have a strategic planning process in place that works.