Having run strategy sessions for businesses of all types and sizes, from early-stage startups to high growth companies, I have come to realise that creating a solid and effective strategic planning process is challenging, and few companies get it right. Based on my experience, here are the top five mistakes that companies commonly make when developing and implementing strategy.
- Lack of a clear framework
A successful strategic planning system requires a base framework that connects strategy data and insights to key decisions and action plans. Without a clear implementation plan, strategy remains a dream, and without a clear strategy, an implementation plan is merely a task list. Each component of your strategy planning system should feed the next component to allow you to trace key actions and decisions to insights around market opportunities. It is important to start with the big picture, including the business’s core values, the target market, and an analysis of the competitive landscape, and then find areas for strategic differentiation. From there, create an operational model and roadmap for implementation, driving quarterly planning and accountability for the senior leadership team.
- No meeting rhythms
A common mistake that senior teams make is spending several days discussing and developing a strategy for the coming quarters and years, only to leave the meetings and get wrapped up in the day-to-day running of the business. The best strategic ideas are worthless if they never get implemented. Successful companies have a clear set of meetings and dedicated time to work on and implement a strategy. Annually, they plan out the next three to five years of key milestones. Quarterly, they update and evolve their plan, define their key objectives, and drive accountability for completion. Monthly, they review and update their plans and respond to any new shifts in the market. Finally, weekly, they review progress, catch obstacles, and keep each other on track for the quarter.
- Involving the wrong people
Teams can involve too many people and slow up the process with too much discussion and too many points of view. On the other hand, they can also fail to involve enough people and miss key insights, failing to get proper buy-in from key business leaders. It is crucial to include people who have unique insights, data, and understanding of the business and the market and who are needed to properly assess the opportunities and make key decisions. Additionally, people with power and influence need to buy into the outcomes and decisions developed in the process.
- Too many priorities
A good strategy is a series of complex but important decisions that define the handful of things a company is going to focus on to be unique in its market. A good strategy also includes decisions about what a company is NOT going to do. Prioritising everything dliutes a company’s position in the market and makes it impossible for buyers to see any uniqueness in their products or services. This puts the company in a position to be a commodity and forces it to compete on prices, which is a painful place to be, especially for growth companies.
- Missing action plan
A plan is worthless if it is not implemented. Strategic planning sessions often result in a binder of documents that sits on the shelf for the rest of the year. To avoid this, ensure that your strategic plan gets translated into a set of operational priorities and a roadmap of key milestones that set clear objectives on a quarterly basis. Then, use these when doing your quarterly planning and priorities.
Developing and implementing a successful strategy is challenging, but there are ways to make it easier and more effective. A good strategy should guide priorities and decision-making at all levels of the organisation. If your strategy isn’t doing that, take a step back and make some changes before investing any more time or money in your planning.