Join Mike Figliuolo for an in-depth discussion in this video Avoiding major strategic planning risks, part of Strategic Planning Foundations.
- Strategic planning takes a lot of time and a lot of energy, it is a high resource type of exercise. Unfortunately, many times that process can be a worthless pain. I've seen strategic planning processes devolve into analysis paralysis. We continue analyzing the market, running financial scenarios, and looking at data and numbers ad nauseam, and the problem is we never advance the plan. Some processes can be extremely cumbersome, too many people get involved, too many iterations of presentations, too many levels of approval, and the worst thing that can happen with a strategic plan is everybody puts in all this effort, and then it gets archived, put on a shelf, and never looked at again.
Now there are some warning signs that you can look for to determine if your strategic planning process is flawed. First, initiative proliferation, do you have to use multiple pages just to add up all the indifferent initiatives you're think about pursuing? The second risk is thinking too small. All the initiatives that are on your list are really small incremental improvements to your business, and don't really advance you to your strategic goals.
A third is thinking too big. All the initiatives are huge and everything has to line up perfectly, and it's a really large bet that you're taking with the organization. Sometimes you can do what I call starving the kids, many organizations have a large profitable business unit, and then they have a lot of smaller ideas that are going to be more rapid growth, and the risk is you invest all your resources in the big known business, and you starve those smaller businesses.
The problem is you're starving your future in doing so. Lastly, I call it the random initiative generator. You look at all your initiatives, and they all seem really great, but when you try to figure out where they're taking you there's no clear direction. An example I've seen when I worked in a strategic planning group, and I first arrived in the group I said, "Let me see our strategic plan." I was handed a list of 37 acquisition targets, and I said, "This is great these all look like "interesting companies that we should "think about pursuing, but where's the plan?" "Well, that's the plan." It wasn't a plan, it was a random list of companies that competed in the market we were in, and we didn't know which of those acquisitions was going to be attractive, and which ones were distractions, and our first task was fixing that strategic planning process, setting direction, and putting some focus to the initiatives that we pursue.
Take a look at your strategic planning process, ask yourself if you're showing some of these symptoms, and make sure you set direction so that you can pursue initiatives that will add value and help you reach your destination.
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- Avoiding strategic planning risks
- Assessing the market
- Conducting a SWOT analysis
- Defining your direction, mission, and vision
- Determining core competencies
- Evaluating and prioritizing opportunities
- Assessing your initiatives
- Organizing for success