Strategic planning has failed the U.S. automakers, the giants of Wall Street, and it seems, our entire free market and regulatory systems. Should strategic planners consider opportunities and threats or simply die given our current economic mess?The SWOT (strengths, weaknesses, opportunities, threats) analysis technique has been used for a couple of decades. Environment scanning (external) together with the SWOT analysis (internal and external) has become all the rage. Yet no one is really taking it very seriously -- at least those who find themselves on the verge of bankruptcy, foreclosure or going out of business. Think about it: If all of these companies, and entire industries, had any common sense, let alone true devotion to strategic planning, wouldn't they have been able to plan for things to hit the fan, especially, the "probable?" If so, maybe GM ( MTLQQ), Chrysler, Citigroup ( C), Bank of America ( BAC) and JPMorgan Chase ( JPM) wouldn't have needed billions in bailouts. Now I'm not even addressing the "possible." So let's look at these terms in relationship to the art, science and voodoo of strategic planning. If you regard strategic planning as a necessary evil, you're doing it wrong. It is as fundamental as revenue, profit and cash flow. In fact, it is one of the best ways to ensure those things happen in abundance. Most of the problems with planning are the result of bad experiences with bad sessions, bad plans or bad execution. Here are The Six Typical Strategic Planning Blunders:
- 1. Boss-Led Event: Bosses must be champions of the process, but never facilitators of the process. Why? You end up with a boss event rather than a critical thinking event. It's only natural that everyone in the room would want to agree, impress and posture in front of the boss, and a professional outside facilitator will minimize that. Instead, he or she will see that the energies are on thinking, imagining and focusing on the opportunities of the firm, not the politics of the audience. Besides, this gives the boss an opportunity to relax and wear another hat of contributor rather than boss.
- 2. Focus on What's Wrong: Sure improvement is why you plan in the first place, but don't get so caught-up on weaknesses and threats that they overshadow strengths and opportunities. The best place to start is to look at your history: where you've come and how you got there. This means it's time to look at the mission statement, the vision statement and the values statement. Here's what each one should contain : Mission: why you're in business, what you provide, and to whom. Vision: what you want to be recognized as, your positioning goal for the future, what you can ultimately become. Values: those principles by which your firm maintains principled profits, performance, and productivity.
- 3. Too Many Targets: The key is not to see how much you can chase, but what you can accomplish that will yield the greatest return by making the biggest improvement. I define improvement as "moving the needle" from one point to another by increasing, decreasing, streamlining or otherwise measuring a change in what exists today and what's desired after the plan has been effective. Examples would be: increasing sales by dollars or a certain percentage; decreasing product time to market by a number of weeks/months; reducing turnover by a certain percentage; developing more lending relationships for cash flow enhancement.
- 4. Lists Rather Than Meaning: A strategic plan always results in "to do lists"; however, they should not be busy work, but meaningful steps to achieving the goals and objectives of the firm. Don't view it as Department A has X number of tasks while Department B only has Y. This is not a competition for who does the most, but rather for how we all pull together to make the company's vision a reality.
- 5. File and Forget: Just as you wouldn't put away the directions or a map while you're en route to your destination, so too is the role of the strategic plan's accessibility. Don't print it up with neat spreadsheets, graphs and logos and shelve it. Have it available for constant reference, and most of all schedule checkpoints to review the progress of tasks before their due dates. There should be a total plan review/update/revision quarterly, if not every two months. This ensures commitment and accountability and provides a reality check that it is indeed working, and everyone is pulling his or her weight. Don't relegate your plan to a pretty binder on a shelf next to last year's.
- 6. No Plan B (or C): Whether it's planner arrogance or myopia, just because you've planned for something to work out doesn't mean circumstances will allow it. You have to consider the possibilities of changing or abandoning a plan altogether with a back-up. This requires imagining bad things may happen. This requires managing the plan. This requires being open to admitting you don't have a crystal ball and flexibility may be the best strategy when it comes to resilience and growth.