In today’s business landscape, implementing a successful strategic plan is more complex than ever before. With challenges arising from conception to execution, even the most well-thought-out strategies can derail, resulting in failure and disappointment.
As we look across the many factors that must be considered when developing a strategic plan, the question arises: why do strategic plans, even those with the best intentions and utmost diligence, fall short of expectations? Understanding the common reasons behind the failure of strategic plans is key for any business leader aiming to navigate the business landscape successfully.
Below are three common reasons why strategic plans fail and how to avoid them.
One of the most common reasons strategic plans fail is poor communication.
Oftentimes, strategic plans are only communicated at the board level and not shared throughout the whole organization. If your plan is not communicated thoroughly, your employees won’t know what their responsibilities are related to the strategic plan. Additionally, when things actually do start to change, employees may start to ask questions about why things are changing and whether that’s really part of the job they signed up for and the mission and vision of the organization they thought they joined.
In order to avoid this common pitfall, organizations should roll out their strategic plan with a proper introduction. Below are some considerations to keep in mind when developing the communication portion of your plan:
- Clear and Concise Intro—Be sure to integrate a clear and concise introduction to your strategic plan, including timelines, key objectives, future communication plans, presentations, etc.
- Get Employees Involved—Work groups, roundtables, surveys, and 1:1s can all be useful tools to answer your people’s questions, keep them on the same page, and collect useful feedback.
- Status Updates—Communicating a major strategic plan should never be one and done. You must factor in that as the plan changes (which it will), you should be communicating these changes to your organization in planned status updates.
- Change Agent Programs—Change agent programs are a great way to spread positive and accurate messaging company-wide. Picking leaders within your organization that you know are bought in to what the organization wants to achieve allows positivity to flow throughout the company in the background.
- Handle the Naysayers—Every organization has members who will pick apart any plan no matter what it contains. Handling these naysayers should always be a part of the communication strategy from the start. One way to handle complaints is by identifying a member of your strategic planning committee to hold 1:1s with people who may be disgruntled. This allows for an opportunity to handle the issue or complaint directly and provide accurate and consistent messaging.
Another common corporate strategy pitfall is undergoing a major plan with inadequate resources. There are a number of different resources that come into play when undergoing the strategic planning process.
- Financial Resources— A lack of financial resources can prevent a company from growth opportunities. Are you aware of your investment capabilities? Do you have strong relationship with lenders and investors?
- Human Resources—Inadequate staffing, a lack of skilled personnel, and high employee turnover can all kill a strategic execution. Without a competent and motivated workforce, it can be really challenging to implement any strategic initiative.
- Technology Resources—Up-to-date and accurate financial reporting and data management are often overlooked in the strategic planning process. An outdated technological infrastructure can certainly hinder efficiency. Maximizing the capabilities of technology plays a vital role in supporting your corporate strategies for any business. Organizations must have real time access to accurate and relevant information to be able to analyze trends and make informed strategic decisions.
- External Advisors—Aligning yourself with like-minded professionals and experts is an important resource and an outlet for knowledge sharing. Having an external source to provide guidance and feedback is an important extension to any corporate strategy.
- Market Access—Inadequate partnerships, alliances, relationships with customers, suppliers or other stakeholders can also significantly hinder your ability to execute your strategic initiatives. Companies must ensure they are leveraging market resources to allow them to grow and penetrate new markets or distribution channels.
Lastly, strategic plans will nearly always fail if they are based upon unrealistic expectations. Of course, it’s okay to reach, just not so far that you are setting yourself up for failure.
Oftentimes, organizations set overly ambitious growth targets without considering market conditions or internal capabilities. Additionally, setting unrealistic goals can also impact the morale of your organization’s employees. You will immediately disincentivize anyone from trying to achieve them because they know that are unattainable. Unrealistic goals can result from the following:
- Unachievable Funding and Resources—A limited budget, manpower, and technology will always hinder the execution of an ambitious strategy. It’s important to align those objectives with your available funding and resources.
- Aggressive Timelines—Expecting quick results and immediate returns is often unrealistic. Strategies can take time to develop and implement and can take even longer to yield the results. Additionally, unrealistic timelines can lead to rushed decision making, poor quality and a lack of thorough execution. Corporate strategy is a long game and must be approached in a thoughtful and intentional manner.
- Capacity Restraints—Limitations in staffing and production can also hinder the strategic execution. If you don’t have the people and systems in place to implement the plan, it simply cannot be accomplished.
- No Room for Flexibility/Adaptability—Assuming flawless execution of strategy without considering potential risks and challenges is unrealistic. You must be able to respond to changes, pivot, and move forward.
As you undergo the development and implementation of your strategic plan, keep the above factors in mind. Strategic planning is a complex process that should be undertaken with careful consideration. If you need further guidance or have any questions on your own strategic planning process, we are here to help. Please do not hesitate to reach out to discuss your specific situation.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.