why strategy fails...and how you can make it work

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  • Why strategy fails...and how you can make it work

  • strategicplanning

    the state of

  • #1

    Bain & Company Management Tools Survey, 2013

    Strategic planning today

    most used business tool

    - globally!

  • but just 45%of organizations use it.

    Bain & Company Management Tools Survey, 2013

    Strategic planning today

  • 58% of leaderssay its extremely or

    very important in their

    organizations success.

    Forrest Consulting Strategic Leader Survey, 2013

    Strategic planning today

  • but 42% of leaders sayplanning is not important

    to the success of their

    organization.

    Forrest Consulting Strategic Leader Survey, 2013

    Strategic planning today

  • 74% of leaders saytheir organization doesnt

    use a formal planning

    process to make

    strategic decisions.

    Forrest Consulting Strategic Leader Survey, 2012

    Strategic planning today

  • 70% of organizationswith a plan fail to

    implement it.

    Balanced Scorecard Collective

    Strategic planning today

  • planningCASE FOR

  • Doubles likelihood of SURVIVAL.Noel Capon and James M. Hurlburt, Columbia University,

    and John U. Farley, University of Pennsylvania, 1994

    Increases company LONGEVITY.J. Berman, D. Gordon, and G. Sussman, study of 555 small firms, 1997

    12% greater increase in SALES

    when top management had a high

    commitment to planning.M3 Planning, study of 280 companies

    The case: survival and growth

  • Strategic planning has a positive effect on PERFORMANCE, both in quantitative and qualitative terms.

    Correlation coefficients with strategic planning:

    Earnings per common share +0.79 Attainment of profit objectives +0.51

    Return on invested capital +0.64 Community acceptance +0.48

    Return on owners investment +0.58 Service efficiency +0.47

    Change in return on invested capital +0.56 Attainment of corporate objectives +0.44

    Return on net worth +0.42

    Anders McIlquham-Schmidt, Aarhus University, 2010. A meta-analysis of 45 years of

    research involving 88 studies representing a total sample size of 32,472 observations.

    The case: performance

  • Evidence showsts strategic planningalso brings INTANGIBLE BENEFITS.

    Optimizes growth and developmentLooks aheadAnticipates threatsCapitalizes on opportunities

    Sets priorities

    Identifies resources needs

    Focuses resources

    The case: other benefits

  • modeland a

    process

    a

  • Gap planning model

  • Fast Track process

  • strategy success

    secrets

  • to develop strategy

    useplanning

    The first secret

  • leaders who say planning ismore important in their

    give it greater significancein developing their

    success

    The first secret

    strategy

  • The first secret

    Forrest Consulting Strategic Leader Survey, 2013

  • For greater success,

    The second secret

    use best practices

  • when leaders rate planningmore important in

    the organization is more likelyto use best practices in

    The second secret

    success

    planning

  • The second secret

  • for planning success

    bestpractices

  • treat planning and

    implementation as

    not an event.

    a process

    For planning success

  • - external and internal.

    get input

    For planning success

  • use an outside

    Facilitator.

    For planning success

  • to plan.team

    For planning success

    enlist a diverse

  • develop a shared

    for the organizations future

    based on strengths and

    opportunities.

    vision

    For planning success

  • identify weaknesses and

    threats to find the

    blocking the way

    to the vision.

    gaps

    For planning success

  • many strategy ideas.

    brainstorm

    For planning success

  • use a

    process to narrow

    consensus

    For planning success

    strategies to a handful.

  • Develop annual

    with measures,

    action steps

    For planning success

    timelines and accountabilities.

  • implement!

    For planning success

  • sell the plan

    For planning success

    and communicate progress.

  • measure

    For planning success

    progress and results.

  • plan again

    For planning success

    schedule re-planning and

    (remember, its a process,

    not an event)

  • Why planning

    fails

  • Bad practices

    failsstrategic planning

    because organizationsuse bad practices.

  • 69% form a planning team of eight or fewer individuals.

    Bad practices: Planning team

    Forrest Consulting Strategic Leader Survey, 2013

    34% dont include Directors or other stakeholders on the team.

  • 57% say strategic decisions are made by the CEO or a small group.

    Forrest Consulting Strategic Leader Survey, 2012

    Bad practices: Involvement

    64% say their process doesnt ensure those who carry out strategy

    are involved in making it.

  • Forrest Consulting Strategic Leader Survey, 2012

    Bad practices: Involvement

    47% say planning discussions dont include the most knowledgeable

    and influential participants.

    47% dont report on planning progress and the final plan to the

    wider organization.

  • 56% dont gather pre-planninginput from stakeholders.

    Bad practices: Input

    Forrest Consulting Strategic Leader Survey, 2013

    49% dont develop information on the external environment.

  • 39% want better use of marketand competitive intelligence.

    Bad practices: Input

    Forrest Consulting Strategic Leader Survey, 2013

  • 58% dont believe their process assesses risks as well as benefits.

    Bad practices: Process

    47% dont develop specific action steps for implementing each strategy.

  • 64% say their organization has too many conflicting priorities.

    Bad practices: Strategies

    Forrest Consulting Strategic Leader Survey, 2013

  • 46% dont include plan review, reporting and adjustment.

    Bad practices: Implementation plan

    Forrest Consulting Strategic Leader Survey, 2013

    46% dont assign responsibility for implementing tactics to individuals.

  • 41% dont include the next plan update/ re-planning time.

    Bad practices: Implementation plan

    Forrest Consulting Strategic Leader Survey, 2013

    28% dont assign responsibility for implementing tactics to individuals.

  • 38% dont report implementation and performance to the executive team

    at regular intervals.

    Bad practices: Reporting

    Forrest Consulting Strategic Leader Survey, 2013

    61% dont report regularly to thewider organization on plan

    implementation and performance.

    .

  • 36% dont track plan performanceagainst measurable objectives.

    Bad practices: Tracking

    Forrest Consulting Strategic Leader Survey, 2013

    53% dont track implementation against a pre-set timeline.

    .

  • 60% dont link strategyand budgeting.

    Balanced Scorecard Collective; Forrest Consulting Strategic Leader Survey, 2012

    Bad practices: Resource allocation

    42% are challenged toallocate resources in a way

    that really supports the strategy.

  • problems16 planning

  • 1. Only top management is involved.

    PROBLEMEmployees and stakeholders know little about the plan: Its not theirs. Little or nothing happens.

    REMEDYMake the planning process inclusive. Use surveys, town meetings, drafts, representation and sounding boards.

    2. Not looking externally.

    PROBLEMThe plan produces sub-optimal results, is not transformative, and can put the organization on a bad course.

    REMEDYConduct an environmental scan to find relevant trends and forecasts. Use results in visioning, gap analysis, strategy making.

    3. Execution resources are lacking.

    PROBLEM Implementation is ineffectual or dies because people, funds and other resources are not in place.

    REMEDYAssess resources. Develop strategies and action steps based on resources. Link execution to the annual budget.

    16 strategic planning problems

  • 4. Little or no progress after initial efforts.

    PROBLEMImplementation starts with a bang, but then fizzles. Dont we have a plan somewhere?

    REMEDYUse progress reviews and communication. Spotlight execution so employees dont fall back to operational activities.

    5. No bounds.

    PROBLEMIn the name of the vision everything becomes important. People go on tangents, wasting energy, attention and resources.

    REMEDYRein in any initiative not on the lists of strategies and action steps, unless it should have been listed or is essential for operations.

    6. Grandiosity.

    PROBLEMThe vision sees a grand future, but the organization cant reach it. Strategies can't produce needed results.

    REMEDYGround the plan on stakeholder input and an environmental scan. Seek input on the draft plan and stress test it.

    16 strategic planning problems

  • 7. No commitment.

    PROBLEMLeaders pretend to embrace planning, but dont think real change is needed. The resulting plan sits on the shelf.

    REMEDYUse credible sources and cases, benchmarking, trends and forecasts to stress the need for change and planning.

    8. Complexity.

    PROBLEMThe plan is filled wi