Learn how to identify barriers to success in strategic planning so that planning efforts are not sabotaged by preventable issues.
- As you look at your organization's strategy and your current strategic planning process, it's critical to understand there are some really large pitfalls out there that you can fall into. First, do you lack a clear direction? If your organization can't clearly articulate here's where we're going, here's why we exist, and here's what we look like three to five years from now, you may lack direction. Second, do you know how to say no? Or do you say yes to everything? Look at the latest set of initiatives you've pursued over the past year. How many of them had been failures? How many of them should you have walked away from? That's an indicator that you're not saying no. Next is failure to prioritize. Go look at everything everybody's working on right now in terms of major initiatives. Are they all properly resourced or are some of them lagging? If you have a bunch of projects that are stalled or are behind schedule, you probably haven't resourced appropriately and your prioritization process may be broken. Next, lacking diversification. When you look at your portfolio of initiatives, do you have excessive concentration either in a specific market, a specific product, or are your bets spread out? The next pitfall is starving the kids. Are all of your resources going to the one big core business that generates most of your profits and all the great new ideas are never getting funded? And last, not revisiting your strategy on a regular basis. You should be refreshing your strategic plan at least once a year and that doesn't mean doing all of these exercises again, but it does mean sitting down and validating the market and looking at your spot, looking at your core competencies, your vision, your mission and asking, "Are these still valid and relevant?" Let me make this real because these risks are huge. I know a consumer package goods company that failed on several of these dimensions. First, they lacked a clear direction. Everything looked interesting and they were more than willing to pursue something as long as the financial returns looked attractive. Second, they weren't very good at saying no. When something came along with a high enough rate of return, they would tend to pursue it. And third, they didn't look at diversification risk. They were so concentrated in a specific set of new initiatives and new markets they wanted to get into that they took on excessive risk. And the way these failures manifested was they made an acquisition for approximately $100 million in an entirely new market that they didn't know a lot about and they made it based on the fact that the financial return seemed like they would be very attractive. Fast forward three years from that decision and every year they lost between two and $5 million and after three years, they realized they couldn't run the business well, they didn't understand the market and they wrote off the entire business and shut it down. So these pitfalls are real. Do the diagnostics, ask yourself these questions as you look at your overarching strategy to make sure you've got a strategy that's viable and will help you achieve your overall goals.
- Define the principles of strategic planning.
- Identify forces used to assess the market.
- Explain how to conduct a SWOT analysis.
- Articulate how to establish guiding principles and set goals.
- Explain what strategic filters are used for.
- Describe the steps of a strategic planning process.