I was recently invited to return to the University of Pennsylvania’s Wharton School of Business for the fourth year in a row to teach a special class on strategic planning for the Securities Industry Institute. I called my contact a few months before the session to ask if it was possible to shift the class more from “strategic planning” to “strategic thinking” this year, but was surprised to find out that 98 executives had already signed up for the class based on the catalog description of it as “a solid look at how to write an effective strategic plan.” So, I decided to go back and take a hard look at the program and see if I could update it a bit and was surprised to have an epiphany of sorts…
I have long decried that one of the factors that inhibit the ability to write a good strategic plan is the lack of “strategic thinking” that typically goes into the planning process. If a practitioner is not spending serious time and effort on the thinking part of the equation, there is the possibility they can do the planning part of the process (the methodology, the framework) superbly, only to create a flawed plan because it was based on poor information and ideas. (The old GI = GO… Garbage In = Garbage Out – a computer programming term) Then I realized that there was another major issue that I simply had not been stressing enough: the execution of the plan.
Every year I ask the executives in this class: “What percentage of the time do you think companies that have a solid strategic plan – actually effectively execute that plan?” The answer I typically get is 10-15% – YIKES! Everybody knows that even a brilliant plan that is poorly executed is almost worthless (actually it is very, very costly!). And there can be no denying that every strategic planner in the world will jump up and down about how important it is to “execute to plan” – but then it struck me – that maybe the reason this number was so incredibly low was that almost no one makes planning for effective execution part of the actual strategic planning process. Ah-ha!
It has been my experience that most organizations spend very little time doing any real strategic thinking before they begin planning… then spend a lot of time, energy, and money on an elaborate “planning retreat” that focuses heavily on process… and then walk away from the planning retreat and simply expect that they can pass out the plan and it will be dutifully implemented by their people. I say NO, not unless just as much energy, time, and effort goes into creating a system and a process for ensuring effective execution as well. What I am suggesting, and will now add to all of my classes, is that a strategic plan is NOT complete until you have also written a clear, specific, measurable and detailed ” Strategic Execution Plan. ”
In an effort to better understand the “process” for being more effective at execution, I sat down and read 22 books on effective execution (4,000+ pages). What I learned is that they all basically said the exact same thing. To successfully execute any significant strategic initiative you need to follow these steps:
1. Figure out what to FOCUS on (and by default – what you must say NO to). Where will you allocate resources? What are your core competencies? Where can you differentiate your products and services for a sustainable competitive advantage? What do you need to stop doing? How exactly will you compete for markets, customers, and profit? The answers to these questions are of course… your strategic plan!
2. Communicate the plan and vision to everyone involved – over and over again – in every way possible – in order to gain alignment and commitment. The people involved in executing the plan need to truly understand it and clearly see their role in making it happen.
3. Create systems/processes/procedures to ensure that the plan is executed in an effective manner. Personally, I hate having to follow procedures – but I absolutely know they are critical in ensuring that the good ideas in your plan become reality.
4. Give people the training, resources, help, and support necessary to follow the systems and processes. Set them up for success. Make it easy for them to win by giving them everything they need to effectively implement the plan. The most important likely being – time!
5. Monitor and track progress. A few keys on this… use as few measures as is necessary – you do not want to add in a bunch of extra paperwork and reporting. Just because something is easy to measure – does not mean you should. Just because something important is very hard to measure – does not mean you can skip it. And lastly, after you have identified the five or six key measures – post them for everyone to see. Make sure everyone knows what the targets are, how they are measured, and exactly how well you are doing towards those targets. Transparency is the watchword.
6. Reward successes lavishly – deal decisively with mediocrity.
If you follow these steps with great discipline, you should be able to see quite startling positive results. And interestingly enough, when I put this list up in one of my classes and ask the participants if they honestly follow a process similar to this to make sure they are executing successfully – almost no one says they are. Another ah-ha!
So, I now see planning as a three-part process: Strategic Thinking + Strategic Planning + Execution Planning. You can be incredibly innovative and have stunning ideas that you run through a wonderful planning process, but without the detailed and specific systems in place to ensure execution, the plan will simply go up on the shelf as credenza-ware, only to be pulled down for next year’s planning retreat – dusted off – and have all the dates pushed out 18 months. That is no way to use a strategic plan.
Hope this helps – I look forward to your comments.