Should I Bother To Plan?
By Bill Dann
Sound familiar? We’ve heard this a lot over the last 25 years. Conventional wisdom tells leaders they should, but their experience was that it added no value. Chief complaints we heard:
- Although it “Felt pretty good, there was no tangible product. All I got was flip charts on the walls.”
- “We never used it.”
- “It was outdated by the time we got it because conditions changed.”
- “Staff resent being asked to do it.”
- “It didn’t impact performance.” “Doesn’t work.”
- “The board is going to go ahead and change our direction on a whim anyway.”
- “If I make these commitments to the board, they will just add to them throughout the year. It sets me up to fail.”
We’ve seen the artifacts of bad planning enough times to know that cynicism about planning is widespread and well-founded.
Before we get deeply into this, let’s clarify some terms.
Planning: Formulating a future course of action; accomplishment.
Of course, you plan. When you set your alarm in the morning, you are planning. Same with your daily to-do list, your vacation reservations, and so forth. What we are talking about here, is strategic planning in particular.
Strategic: Necessary to be effective.
We mean defining the vital few projects to assure future success. Think of it as your change agenda. Henry Mintzberg, author of The Rise and Fall of Strategic Planning, defines it as “an ongoing dialogue about optimizing scarce energy/resources for change/success.”¹
Of course, to us, it makes about as much sense to set your business off on a journey without a plan as it does to head for a new destination in your car without a map. But, you need the right process and tools for strategic planning to add value to your business. Mintzberg cites a survey of U.S. multi-business firms that found most people still committed to strategic planning, but 87 percent were “disappointed” and “frustrated” with their planning systems.
For effective strategic planning, the following are “must have” elements:
- Clear and compelling purpose, vision, and values
This is the mission that good employees sign up for — commit to. It is the source energy and the touchstone of a healthy corporate culture. -
A strategic assessment that ignites innovation
If you simply extrapolate today’s numbers and strategies, you will be run over by a competitor who better connects and delivers on the true needs of customers/stakeholders/donors. - An honest, in-depth, effective assessment of the condition of internal operations, and clarity on leverage points for improved performance
Staying alive means improving your game. Your competitors are doing so. Increased market share, margins, and employee morale depend on it. You need the right tool here. I have never seen a CEO (including myself) who understood the truth about problems in the business. The tool you use must make the invisible, visible. Who participates is also key. You need all vital viewpoints. - An action plan for each strategy, with deliverables, deadlines, individual accountability
It is the failure to get into action and to drive accountability for results that sinks plans. - Measurement of impacts
You need to be able to determine early whether or not your theory about how to grow market share or improve performance, is working. It is not enough to execute the strategy blindly. You need to put more resources into what you find is working, and get off what is not, because the resources you can commit to the change process are scarce. - Ongoing revisions
Your regular accountability sessions on execution of the plan must include revising the plan for changed conditions. Sources of revision: changed competitive conditions, failed strategies, new barriers, missed steps, inability to get cooperation, and so forth. You wouldn’t use an inaccurate highway map and you won’t use an inaccurate strategic plan. - Real accountability
Finally, you have to drive accountability for results. Our experience with hundreds of plans is that success hinges on the leader insisting on results, not on reasons why there are none.
Bibilography:
- Mintzberg, Henry, The Rise and Fall of Strategic Planning, 1994, Free Press Mintzberg, op.cit., p. 137
The Importance of an Internal Assessment
By Bill Dann
CEO’s often think of strategic planning as finding how to achieve growth, rather than how to gain profit. The old business adage of “grow or die,” is true, and justifies the attention of a growing market share. But, also true is the phenomenon of “growing, growing, gone.” That is, sometimes growth outstrips our ability to perform to the extent that each new unit of product or service actually costs us or loses money, rather than bringing in profit. Another truism comes into play here: A well executed sub-optimum strategy will outperform a poorly executed brilliant strategy. Consistency in product or service quality, and customer experience is key to maintaining and gaining market share.
What is an internal assessment?
In explaining our Vision Navigation® strategic planning process, we use a nautical analogy. Think of your assets as a ship. You can use those assets for a variety of purposes and provide a range of services (wage war, heal the sick, run a “love boat,” or a convention center). Deciding on the right product(s) or service(s), the right markets, timing, and so forth, is your strategy for growth. Examining how fit the vessel and crew are to execute the current or future strategy is the internal assessment. It involves evaluating infrastructure, systems, processes, human resources and organizational culture.
Why internal assessments aren’t done
There are a number of reasons why internal assessments aren’t done. Among them: They cost money, and the ROI looks unclear or unacceptable; Doing them creates expectations that we will actually make the needed improvements. Past failures at change, and the unwillingness to confront the real issues, are also common reasons. CEO’s often become overwhelmed. The last thing they feel they need is new information or other problems to solve, so we won’t open that Pandora’s box.
Why they should be done
First, as stated above, maintaining the quality of execution and growing the infrastructure to keep pace with the growth of sales is vital to maintaining market share or unit profitability, as you grow. This is as true for non-profit organizations as it is for-profit ones. No matter the ownership structure or purpose, a single negative customer experience is shared multiple times, with damaging effects. Overburdened staff, last-minute purchases, delays due to system inadequacies, and, generally, not managing growth, can have long-term negative impacts.
Second, it is our experience that CEO’s do not know the true condition of their organizations. Employees are wondering, why things don’t get better. The answer is: Because management doesn’t recognize the problem. In short, it doesn’t know the truth.
In summary, it is not what you don’t know that is killing you. It is what you think you know, that you actually don’t. You think you know something, and that leads to not doing an assessment. The result is often a missed opportunity to solve a problem that can bring about a huge gain in performance.
What we have found
We have done hundreds of internal assessments as part of our Vision Navigation® strategic planning process. I recently had our staff compile results from those assessments, and here is what we have found:
- We have administered the LifeCycle Insight™ to numerous organizations, many of them multiple times. We use this tool, among others, because it shows the condition of an organization relative to an ideal condition, known as Prime. That is, an organization knows what destination it is shooting for, because it allows for sorting out the data, and for analysis by department, location, management level, and so forth. The analysis is always performed with the CEO on the one hand and the rest of the organization on the other. The results are consistent and astounding. Almost 100 percent of the time, the CEO’s view of the organization is reverse of what the rest of the organization sees. In other words, what the CEO sees as a strength, the rest of the organization sees as a problem. (I overstate this slightly to get your attention, because it deserves attention.)
- Without a properly-conducted and analyzed internal assessment, management tends to reactively attack the symptoms of underlying problems, rather than the underlying problems themselves. Huge gains in performance result when the underlying problems are solved.
- 44 percent of the assessments included HR and training and development issues (evaluations, unacceptable turnover, lack of training, and so forth).
- Just over 25 percent of the assessments we studied included poor, or unclear, organizational structure as an issue.
- Just over 25 percent included internal communications as an issue.
- Just over 15 percent included lack of clear vision, and many of these organizations had strategic plans. They just weren’t communicated to the troops.
- Lack of alignment of management with governing boards or owners, is another theme. Surprisingly, if it exists, it is well known in the rank and file, and has a damaging impact on morale.
What to do
Strategic plans involve allocations of scarce financial and management resources that can be applied to change — rather than maintaining — existing operations. A good plan should be a balance of an investment to bring about growth and an investment to improve performance. The proper balance depends on the condition of the organization. One client CEO, using our ship analogy, announced to his board after completing an internal assessment, “We are not fit to sail. I need at least one year in dry-dock to get her fixed. We are not now capable of executing any new growth strategy. We would sink if we did.” On the other hand, if your infrastructure and corporate culture are sound, you are poised to focus on opportunities in the marketplace that will fuel growth.
An effective internal assessment has these attributes:
- It includes input from all viewpoints in the organization. (Maybe not all employees but all levels of employees.)
- It is structured so that participants can look at the organization relative to an ideal, or model organization. That is, how do we compare where we are with where we should be. This can be done via a questionnaire, a best practices analysis, or by other methods.
- Priority-setting is based on which conditions and potential solutions have the greatest potential for overall improvement. Remember: You are not reacting to pain, but finding root causes.
Once you have these in place, your ability to make profound and lasting, internal improvements in the organization, will dramatically improve.