strategic annual plan

Why The Traditional Strategic Annual Plan is Failing You

Latest posts by David Martin (see all)

For small to mid-sized enterprises, the annual strategic planning process can be fraught with frustration.

On one hand, it is acknowledged that the most accepted best practice for a business to go from their vision to achieving their stated result, for example, grow revenue by 5x over 24 months with existing resources and infrastructure, is tied to the creation and implementation of a strategic document, like the annual plan or the large PowerPoint, that has all the supporting initiatives and tasks embedded within. On the other hand, those traditional methods are just static words on a page, and it is nearly impossible to observe the cause-and-effect relationship that comes from making daily decisions and to see how those decisions impact the likelihood of achieving critical goals, milestones and KPIs.  Additionally, the research is clear, there is a staggering high failure rate of 70% for small to medium-sized businesses (SMBs) when they attempt to go from vision to result. Why?

For most, the dream of entrepreneurism starts with an idea.  The classic “build a better mousetrap.” With that idea comes a flood of creativity on how to put that idea into motion. That becomes the vision of the company. The energy flows white-hot as management begins to envision what it is that the company wants to achieve, i.e., their desired outcome. Soon objectives and tasks follow on how to tactfully take the vision and turn it into results. That stage is execution. For most, the vision, goals and execution get memorialized within a report and the work begins to make it a reality. As the process begins, too often the vision gets lost, the execution plan stalls and the likelihood of reaching those desired outcomes become more and more fleeting.  Why?

Too often the vision gets lost, the execution plan stalls and the likelihood of reaching those desired outcomes become more and more fleeting.  Why?

Entrepreneurs are constantly bombarded with both known as well as unpredicted issues that impact the enterprise. These issues, or “daily fires,” can easily evolve to become a vampire, draining time, resources and energy for management and the enterprise. And it is becoming more common for management and their teams that their days distill down to fighting fires versus executing their strategic plan so that they can achieve their desired result. This paradigm is supported by the fact that lower-performing teams spend 83% more time fighting fires. Management is all too aware that it is the fires, the competitors, the changing market, the resource constraints, the work that is done and the work that is not done that impact the direction the enterprise travels.


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The problem with the traditional strategic planning method is that it has no way of depicting all these forces in real time. If there is no easy way to adjust and realign the plan to address today’s needs, then there is a greater chance that the lack of actionable intelligence is placing management in an inferior position to execute effectively. Today, it is hard to imagine jumping into your car for a long trip, to an unfamiliar destination, without first entering your destination address into a GPS. We rely on GPS to provide us with the turn-by-turn directions to ensure that we are on the right route to get to our desired destination in the most efficient way, rerouting when traffic, accidents or the unknown impair our ability to arrive on time. Long gone are the days of unfolding the road map, choosing your route and just driving. Yet, that is exactly what too many SMBs do when it comes to their strategic planning process. They are stuck relying on an inert document that has no way to reflect the circumstances of the moment. For the SMB, the traditional annual strategic planning process often does not provide a positive ROI on the time and capital invested.

It is becoming more common for management and their teams that their days distill down to fighting fires versus executing their strategic plan.

The one cold hard truth that every entrepreneur knows is that at the end of the day, the work must get done. There are only so many hours in the day and the choice is clear, revenue producing activities take precedent over the time-consuming process of updating the strategic plan, even though ironically, the strategic plan is vital to achieving your stated result. The research also collaborates what it takes to create, and then constantly update, the traditional plan is often an arduous and frustrating process and is a driving reason why now is the time to retire the traditional strategic plan.

With a new year, comes new thinking. Like the retirement of the traditional road map, it is time to retire the inert strategic document. In its place, it is time to implement a rolling, ongoing, short- and long-term plan that allows management to see how today’s circumstances and decisions impact both the desired short- and long-term goals. In doing so, management will be in the best position to make adjustments in real time as needed and to ensure that those adjustments become aligned throughout the organization, which allows  management to both manage the daily fires while at the same time making sure that the strategic plan provides the best path to achieve the desired result.

When building a rolling and dynamic strategic plan it is essential to construct a solid foundation upon which to build. When assembling that foundation, it is key to implement a “work backwards” methodology that will help identify and explain the cause-and-effect relationships within the decision paradigm of the enterprise.

The following six steps provide a pathway forward to begin the process to transform your static strategic document.

Step 1: Illustrate how the business creates value. At my company, Execution360, we like to start with a flowchart. Keep it simple, clean, concise, and coherent. A flowchart will begin the process of understanding your enterprise visually.

Step 2:  Think about the key metrics (for example revenue, profit, customer satisfaction, marketing success, close rate, team skills, systems, etc.) that you can use to map out how the organization works. Then score the organization on each metric (Green=good, Yellow=ok, Red=poor). Be quantitative where possible and qualitative where needed.

Step 3: Write down the high-level business goals, short and long term. Consider first the mission/vision of the enterprise. Ask the questions that need to be answered, for example, what are the goals that if achieved will deliver on that mission?

Step 4: During this step, you want to identify the objectives that if achieved will deliver on the goals. Before you write them down, look at the flowchart and the performance of each metric. Which metrics are most important, and what objectives will help improve the performance of those metrics?  The objectives should be a combination of what will deliver on the goals and what will improve the key metrics. If possible, score the objective based on the metrics that affect it.

Step 5: Create the projects and tasks that will deliver on the objective. Examples of questions that need to be explored. To create accountability, make clear who is in charge of each project and task and when it should be completed by.

Step 6:  On a periodic and as-needed basis, update the scores and ranking of the metrics and see how it is affecting the objectives. To keep the plan current, a good rule of thumb is to review at minimum twice per month.  Continue to review the results; are the projects and tasks effectively advancing the objectives?  At my company, we developed technology to automate this step. The following is a link to a process flow diagram.

There are a myriad of reasons why management and employees both dislike the strategic review process.  The most reoccurring reason is that the strategic review topics are disconnected from the organization’s current circumstance. However, if the organization is tracking strategy and executing properly and the plan is up-to-date, then having a review meeting can happen on demand with very little preparation. It should be as easy as pulling up a report that consolidates the strategic items for that employee or team and reviewing their performance and the impact it has on achieving key milestones and KPIs.

A rolling, ongoing, short- and long-term plan will provide management with a clear understanding of how it creates value and how it is performing.  Remember, it is much easier to make good decisions when those decisions are based on the most current actionable intelligence derived from within the enterprise itself.

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