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Strategic Planning Myths Pave the Road to Failure

October 15, 2009

Gershon

I’m very pleased to host a guest post from one of the three authors of the new book The Power of Strategic Commitment. Gershon Mader was kind enough to write this post which focuses on two myths about strategic planning.

I’ve read this book and found it excellent. It comes at an important time, given the economic and financial turmoil we’ve been experiencing. In particular, The Power of Strategic Commitment contains invaluable insights on how to engage and align people in order to accomplish incredible things. I highly recommend reading it.

I also plan to interview Gershon for an upcoming post, so stay tuned for more.

Strategic Planning Myths Pave the Road to Failure

“The first step in making a good movie is getting everyone involved to be making the same movie.”
– Francis Ford Coppola (film producer).

Movies are big, messy one-off projects, but with a great leader like Francis Ford Coppola they get made brilliantly. Organizations face even bigger challenges. They can spend millions every year on strategic planning, but have little to show for it. Strategies are supposed to rally and unite people, but too often incoherence and politics displace alignment and engagement. One of our long-time clients once said: “Strategic planning – that’s when you go off at the beginning of the year and agree on the organizational priorities, and then go back to work and do what you were going to do anyway.”

So what’s the problem? Many leaders and managers focus on the wrong things because they do not understand what makes their people tick. Here are two dangerous underlying myths about strategic planning:

Myth #1: The effectiveness of a strategy depends on the accuracy and validity of its content.

Most leaders and managers believe that if they get the objectives right and make sure everyone in the organization understands them, their strategy will work. So they analyze, research and benchmark their industry, competitors and market. Then, based on this work, they craft a vision, goals and objectives, which they believe are the most accurate; sometimes they get the help of expensive outside experts. After all, everyone knows that the more you pay for advice, the more accurate it must be. Finally, management informs the troops through elaborate communication schemes, confident that their approach is bulletproof and will ensure that their people are genuinely on board and committed to the new strategy.

Unfortunately, this approach rarely works. When we observe organizations, people’s behavior seems disconnected from the strategy. They may occasionally present the strategy on PowerPoint, but mostly they don’t remember it. They aren’t passionate about it, and it doesn’t shape their decisions, priorities and actions.

Any strategy is only as good as people’s relationship with it.

The most accurate and well-crafted strategy will fail if people don’t own it and aren’t accountable for it. On the other hand, even an adequate strategy is much more likely to succeed when people truly feel a sense of ownership and commitment toward it. Leaders who want to generate total alignment and engagement have to address not just the content of the strategy, but the context in which it has to be executed. This means fostering an environment of authentic and courageous communication and ownership. Only in such an environment can people address the real issues and truly commit their hearts and minds to the work at hand.

Most leaders focus solely on the content of the strategy because they don’t know any better. But the high failure rate of strategic initiatives proves that this is dead wrong.

Myth #2: The more you can predict the future, the better your strategy will be.

Most leaders and managers approach strategic planning from the past. They examine and benchmark their own and competitors’ past performance and trends; they analyze their current environment. Then they extrapolate a goal into the future. They may have best, worst and most likely case scenarios, but all are based on history.

In today’s difficult economic environment, this approach most often leads to what can’t be done, how difficult things will be, and how the outlook for growth and success are bleak. The problem with this thinking is not only that it isn’t true; much worse it’s self-fulfilling. How many times have we been shaken out of our certainties about the future by rogue events and developments? The most immediate examples are the tech bubble, the housing bubble and the recent collapse of the financial sector.

The more you try to predict the future by analyzing the past, the more you are stuck in it. Of course you need a healthy respect for, and an understanding of the past. But as Alan Kay (an ex-Apple Fellow) said: “The only way to predict the future is to create it.”

The most powerful and effective strategies are informed by the past, but invented from the future. This means a team or organization envisions the future, takes a stand and commits to a direction and destination as a responsible, plausible and calculated risk. Then everyone commits to that destination–not because it is completely accurate, but because they believe it is the right future to pursue.

When a team or organization aligns itself around a bold and compelling future people rise to the occasion. They give it their all, and they go above and beyond the call of duty. They collaborate, communicate, share information and look out for each other.

Remember: Strategic planning is not an accounting and forecasting exercise but rather a leadership exercise in getting everyone on the same page. One requires a calculator. The other requires courage.

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