In my work with executive teams, I see many mistakes in strategic planning. Of course, the worst is not doing strategic planning, but even if you decide to invest in a strategy process, there are plenty of ways to go off the rails. I’ll share a few common ones and provide alternatives to improve the quality of the process and the outcome.
This post is the final in a series about strategic planning. You can get more tips and tactics from the others. Here’s how to get your process started. But you can go back one step if you’re trying to justify why strategic planning is worth the effort. And be sure to peruse this to ensure what you’re doing is strategic rather than operational planning.
Where Things Go Wrong in Strategic Planning
There are many ways to derail your strategic planning process or at least sub-optimize it. As I mentioned in a previous post, you extract the value from doing the planning as much as from having the strategy. The thinking, anticipating, envisioning, debating, challenging, and choosing that you go through are critical. It’s not just about producing a document. Avoiding these mistakes will increase the likelihood that the process creates valuable insights.
Who Should Be Included in Strategic Planning?
Mistake #1: Defaulting to the Executive Team
The executive team usually leads the strategic planning process, but sticking with just the executive team can be a mistake. An optimal process requires an elusive balance of skills and personalities. Sure, you need vision, creativity, and ingenuity, but you also need a deep understanding of your industry and your company. You need people who embrace change and people who spot risk. You need people who help you diverge, and then later; you need people who help you converge (it’s doubtful that these will be the same people). I’m saying that you want diversity of experience, styles, and perspectives around your strategy table. Unfortunately, many executive teams don’t have enough of it.
Another reason you might not want to limit strategic planning to the executive team is that the executives have the most vested interest in keeping the organization as it is. If you suspect turf wars, egos, or individual agendas might hamper your strategic planning process, this article will give you tips on addressing interpersonal issues before you launch your planning process.
For both reasons (a dearth of diversity and dysfunctional dynamics), I often recommend bolstering the executive team by adding a handful of people to form what I call a Strategy Council. For example, you could add people who are tuned in to the external environment, those who’ve worked in other organizations in the industry, visionaries, technology gurus, or one or two highly analytical people. You can have 12-15 people in these conversations, and they will work well.
Where Do We Start to Create a Strategy?
Mistake #2: Definition Tactics Before Setting Trajectory
Another common mistake is diving into your SWOT analysis (strengths, weaknesses, opportunities, and threats) without first understanding what you’re trying to accomplish. It’s hard to discern what factors in the external environment are relevant if you don’t know where you’re headed. It’s like listening to the traffic report before selecting a destination—interesting but irrelevant.
Instead of going straight to the external environment, start by defining the north star for your strategy, including your organization’s purpose (or mission) and strategic goals. Knowing why you exist and what you need to achieve will define the trajectory and slope of your strategies.
Your purpose defines your trajectory, which opportunities you’re moving toward, and which you’ll ignore. Your strategic goals define the slope or steepness of your strategy; how ambitious your strategies must be. On the other hand, if your strategic goal is to prevent acquisition by doubling your size and taking advantage of scale, your strategies will need to be bold. If your goals are more modest, your strategies can be too.
Without a north star, every opportunity looks exciting; every threat seems terrifying. But when you know what you are, where you’ll play, and how you’ll know you’re winning, you’ll realize which opportunities and threats need your attention and resources and which don’t.
How Many Strategic Priorities Are Too Many?
Mistake #3: Avoiding Hard Choices
Sometimes teams get stuck in the trap of thinking that more strategies and tactics will increase their organization’s chance of success. I have found it’s the exact opposite. Strategic organizations pick a lane and focus their resources and attention on a small number of plays that will make them successful. If you’re a giant corporation like Microsoft or 3M, you might have room for multiple strategies. Still, most organizations do themselves a disserve by trying to be everything to everyone.
When facilitating strategic planning, I encourage my clients to land on four, max five, strategic imperatives. They should be so mission-critical that everyone in the organization can remember them and use them to make decisions in their daily work. More than four or five, and there’s no way anyone will remember them, let alone use them to guide their priorities. Note: strategic imperatives are insights, not actions, and no cost is associated with them. It’s the limits of people’s attention that constrain how many you include.
When it comes to strategic projects, which are the tactics you use to advance your strategies, you are constrained by both attention and resources. If you try to have five projects for each of your five strategies, you’re diluting your resources across 25 projects. That’s probably too many to fund and ask people to implement. So instead, pick a small number of projects that each advance your organization on multiple strategies. Finish those and then add the next set.
More Mistakes You Make in Strategic Planning
I could go on and on with more mistakes that might erode, dilute, or distort your strategic planning process.
Mistake #4: Setting unrealistic goals (aka “the hockey stick”)
Mistake #5: Being too internally focused and creating an operational rather than a strategic plan
Mistake #6: Having a vanity purpose statement or goals that don’t stand up to financial pressure
Mistake #7: Not making evidence-based decisions
Mistake: #8: Being blind to the risk of over-strengths
Mistake #9: Talking about the tactics and projects as if they were the strategy
Mistake #10: Writing the strategy in lackluster, jargon-filled language that no one cares about or remembers
I’m going to need to do parts two and three of this post to expand on mistakes 4-10. But that’s for another day.
Which of these strategic planning mistakes have you seen? And which ones did I miss? Let me know.