We just rolled the clocks back, so chances are you are either getting started or are well into your strategic planning exercises for 2019. Unfortunately, the chances of successfully deploying a strategy and achieving stated goals are low for most organizations. In their book The Balanced Scorecard, authors David Norton and Robert Kaplan note that 90 percent of organizations fail to execute their strategies successfully.
What accounts for a 90% failure rate? Why do so many companies put a ton of effort into developing a strategic plan, only to miss the mark?
In developing the KaiNexus platform for strategy deployment, we’ve had the chance to chat with leaders in many industries about the planning process. We’ve talked a lot about what works, but also about what doesn’t. When it comes to strategy deployment, there are some common pitfalls that our clients have learned to avoid. Here’s what not to do.
Overcomplicate the Strategy
The most successful organizations select just a handful of strategic priorities that are mission-critical for moving the organization to its next phase. They will usually take three to five years to achieve and are closely aligned with the vision of the organization.
Complexity will come in when you operationalize the strategy, so if the starting point is already byzantine, it is likely that something will get lost in translation and that the tactics your team develops won’t get you where you want to go. Simple strategies are also much easier to measure and control.
Close the Boardroom Door
We mean “close the door” in a metaphorical sense. Some leadership teams see strategic planning as a C-level only exercise. They hole up in a room devise a plan and then reveal it to the rest of the organization. It’s no wonder, in this case, that individual employees and mid-level managers don’t become as invested in the plan as leaders would like.
The alternative is to involve as many people in strategic planning as possible. It doesn’t need to be a democracy, but people do need to feel heard in order to internalize accountability.
Focus too Much on the Financials
We get that you need to have financial forecasts for each year, but a strategic plan is not the budget. The budget should support the plan and reflect the values of the organization, but front-line employees are unlikely to rally around your revenue forecast or spend extra effort to bring down COGS unless those goals are tied to a bigger picture in which they see themselves.
Fail to Identify Key Performance Indicators
Imagine playing a basketball game in which the score is not revealed until the final buzzer rings. Players would have a difficult time deciding which shots to take, and coaches would have to guess about when to take a timeout or make a substitution. That’s a bit what strategy deployment without KPIs looks like. You don’t want to wait until the end of the year to measure performance against your annual goal. Instead, smaller incremental measurements help you keep “score” so that you can adjust as necessary.
Try to Do it in Excel
Excel is an outstanding business tool that does a lot of great stuff. (It’s perfect for your budget.) However, it is not the best solution for strategy deployment. Spreadsheets are difficult to “lockdown,” and a lack of standardization can open up the opportunity for error. File duplication can quickly get out of hand and turn into a nightmare with no one knowing which version is correct.
While Excel isn’t the right answer, the instinct to apply technology to strategy deployment is a good one. Fortunately, there are tools built for this purpose that offer performance dashboards, workflow, success broadcasting, project management, and goal alignment. With this type of support, individuals know how their work moves the needle on the overall goals and how their performance will be measured. Cross-functional collaboration is simplified, and leaders know when they need to make adjustments to the operational plan.
For 2019, give your organization the gift that will keep on giving – a solid strategic plan with the tools and culture to support it.