A study published in the Harvard Business Review found that organizations typically realize 63% of the financial performance promised by their strategic plans. The other 37% is lost through inadequate resourcing, poor communication, poor definition of actions required and unclear accountability, among other issues.
How do you ensure your organization achieves the full promise of its plan?
Ambition is one of the great driving forces behind success, for both individuals and organizations. The challenge for organizations is that great ambition must be matched with planning and resourcing in order to achieve success.
Mezzanine recently engaged in a strategic planning project with a professional medical association that has great ambition, but limited resources. As part of the 5-year strategic planning cycle, it was vital for the CEO that the planning process not only lay out the right direction for the organization, but that it also identify the tactical requirements to see the plan to implementation.
Typical strategic planning involves an environmental assessment, an evaluation of the perceived needs of the member or customer base, and inputs from the Board on possible strategic options. Often the decision makers in an organization know where they want to take the business, and they have the passion to lead a team towards that goal. Strategic planning typically culminates in a decision on what goals an organization will pursue and how it will measure success.
Less often does the process delve into the detail of identifying how those goals will be achieved, on what timeline and with what resources.
But it’s through that latter, detailed component that the planning process provides the most value to organizations. Strategy is often easy (though not always). It’s the tactics where organizations struggle. While the goal may be clear, the path to it is often not - especially for those who are tasked with achieving it.
If your organization is embarking on a strategic planning process, look beyond that process to Tactical Implementation. Once you’ve identified the goals, work backwards – through what programs and projects will you achieve those goals? What resources will be needed? What timelines are realistic? Are certain kinds of expertise needed that lie outside of the organization? If so, how will they be brought into the organization?
You’re likely to find this process, though demanding, will shed tremendous light on the goals you have set and the resources that are required to achieve them. We usually see organizations have ambitions that far outstrip their realities. This process helps them – both the staff and the Board – identify how to grow with restraint and align strategic appetite with realistic resourcing.
(Source: Turning Great Strategy into Great Performance by Michael Mankins and Richard Steele, HBR July / Aug 2005)