Successful strategic planning is an elusive goal for many companies. Harvard Business Review puts the ROI of traditional planning at 34% or less, and other studies have pegged the failure rate at 70% and sometimes even as high as 90%.
One reason for the high failure rate is that planning tends to be treated as an annual event rather than an ongoing process. Moreover, most organizations fail to align their strategies with their processes and technology. As problems occur in such companies, different silos of activity independently make operational changes on the fly that render the strategic plan irrelevant until it is revised the next year.
A successful strategic plan is a dynamic, living document of actions that are grounded in the true drivers of an organization's activities. The plan can reflect new goals and ideas, of course, but it must align with existing processes and technology or, at a minimum, define paths towards alignment that can be realistically executed. The way to create such a plan is through a process called Strategy Alignment and Deployment, or SA&D.
SA&D aligns a strategy with all areas of an organization and then guides its execution. The alignment piece validates that all proposed changes support the organization's strategic goals, while the execution piece defines specific activities that each part of the organization must accomplish. In short, SA&D turns talk into goal-oriented action.
SA&D starts with three requirements:
- A consistent organization-wide methodology: To avoid confusion at the local level, you need to develop a consistent planning methodology for the entire company as the first step in aligning all elements of the organization. This is often referred to as Leader Standard Work, or LSW.
- A robust governance system: To ensure success, you must institute a governance system to track progress against a few critical key performance metrics. You'll want enterprise-level metrics for each overall 'breakthrough objective' and its corresponding 'annual improvement priority.'
- . A change management plan. If your plan requires significant realignment, you'll need to mitigate potential resistance by implementing SA&D first in groups that are not averse to change. Their improved performance can then be used to influence change-averse groups.
Driving strategy to execution is a big undertaking, so it is important to remember that most organizations require several iterations of execution to become proficient in the SA&D process. I don't claim that SA&D is an overnight fix, but it is a sustainable, even transformative one. Those who stick with it will achieve their strategic plan's goals and objectives while becoming the most competitive organization in their industry.