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INDUSTRIAL ENGINEER – VOLUME 44: NUMBER 01
By: Chuck Parke
Organization without a vision for the future won’t get there
Most organization conduct some form of strategic planning. However, very few of them reap the full benefits of a robust strategic planning process. In fairness to the organizations that fall short, numerous pitfalls lie in wait for those who approach strategic planning without a comprehensive understanding of what is required to realize success.
Strategic planning is an essential part of doing business. Forgoing strategic planning due to time constrains places many leaders in the “whack-a-mole” game; they constantly are fighting fires and getting little assistance from their support staff because they have not provide clear direction and accountability. The role of the leader becomes significantly more enjoyable and successful when the direction is clear and employees understand their role in accomplishing the organization’s goals and objectives.
Prior to developing a strategic plan, every organization must take an external and internal audit or inventory of its current and future operating environment. Externally, a review of economic conditions and the competitive environment is needed to develop a meaningful plan. From an internal perspective, many organizations fail to be brutally honest in their self-assessment of current strengths and weaknesses. Overestimating your organization’s current performances can change your strategic goals into “stretch goals” due to the inaccuracy of the baseline evaluation.
Another major pitfall in the strategic planning process is the alignment and breadth of priority setting. In order to maximize the impact of strategic planning, every level of the organizations must be aligned in its priorities. If a priority at the plant level could not be linked to priorities at the corporate level, then the plant priority needed to be challenged.
Almost every strategic planning expert will agree that leaders should limit the number of strategic priorities to five or less. This type of strategic planning typically overtaxes the resources of an organization and eventually leads to “planning fail.” Leaders have to separate areas they want to improve incrementally from those areas that need significant improvement. One of the most ignored components of strategic planning is that of strategy testing. Testing a strategy on a subset of the organization to understand the weaknesses and hurdles that have to be addressed just make good sense.
Before moving to the next logical step of governance, a focused effort needs to be made to identify and address resource gaps. These gaps could include people, skill sets, financial support and other things. Officials who fail to address The goal for any strategic plan is to support and improve the underlying business, which means considering the needs and wants of customers.
Therefore you have to make sure that your strategic plan identifies objections. Such strategic planning challenges come in two phases – overcoming the hesitancy of inventors and others who fail to see the business value or your solution, followed by convincing end users to shell out for your product or service.
“The point is that the drive, determination and dedication need to be combined with systematically overcoming the inevitable objections, which means you need a plan.”
The lack of governance process is an additional pitfall for organizations that embark on strategic planning. Many have spent valuable time developing a strategic plan only to set it on the shelf until the urge to develop another plan returns in subsequent years. This lack of governance leads to a static plan and a lack of accountability on terms of the actions required to execute the plan. Strategic planning reviews should be held at a minimum of every other month. It is critical that these reviews do not mix daily issues with strategic issues. Finally, governance must include a strong link ton an organization’s performance management system.
Related to the governance and performance management aspect is the critical step of establishing metrics. In too many cases, poorly designed metric lead to suboptimal or even disastrous results. Metrics drive behavior. Over time, these behavior become organizational culture. Metrics need to be well-designed to measure the overall success of the priorities and subsequent strategic accurately, but, more importantly, they must drive the behavior that the organization desires. For example, establishing a singular metric for machine uptime could lead to operating the equipment in an unsafe manner or ignoring preventive maintenance schedule.
The last major pitfall revolves around communication. Even when the senior leadership team develops a solid strategic plan, it needs to develop a plan to communicate that strategy to the rest of the organization. Employee need to understand where the senior leaders are taking them and why. Armed with thus knowledge, the opportunity for a much higher level of employee engagement exists and, subsequently, a much higher chance of success.
While it is critical that employees understand the strategic direction, it is equally important that they mentally can connect the dots as to how their role in the organization impacts the strategies. Attaining this level of comprehension requires more effort than posting the strategic plan on the portal or handing out flyers.
Ultimately, you have to ask this question, “If you are not leading an effective strategic planning process for your organization, then who is?” This is the question I pose to senior leaders in our executive leadership classes. The answer is almost “nobody.” Can your organization survive if the leadership team is focused solely on the problems of today as opposed to preparing for the challenges and opportunities to come? Strategic planning is paramount to an organization’s long-term competitive viability. Too often, mistakes are made the turn strategic planning into a paper exercise as opposed to a meaningful, worthwhile leadership process.
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