How much of your annual strategy will you achieve?
If you are like most companies, probably around 60%. Research estimates that 70% to 90% of strategies fail due to poor execution. A good strategy does not need to be smarter than last year’s strategy: it needs to be more actionable.
Often strategies are not completely executed upon for a number of reasons, among others:
- Not enough time dedicated to strategy planning, because we spend our days fighting fires.
- Lack of alignment among the leadership team. Strategy is about saying “No” to tempting initiatives, but if your team doesn’t go deep enough to surface disagreements and discuss necessary trade-offs, your team’s commitment to your strategy is only superficial. As a result, employees do what they think is best, often unable to connect the overall company priorities with their daily work – leading to a waste of resources.
- No connection with an operational plan.
How to put together an actionable strategic plan?
Here are four tips to make your annual strategic plan more actionable:
Invest time to debate strategy – at least one full day, preferably two.
I sometimes hear small companies complain that “this is for large companies; we don’t have time for this!” They are wrong: there is no minimum size to invest time in strategy. A friend of mine is a solopreneur; once a year he spends a full workday in a local forest to reflect on the past year and define his strategic priorities for the upcoming year. Taking the necessary time to select the right annual priorities will make next year much more effective: a well-facilitated strategic planning workshop day is a great investment towards better strategy execution. In other words: slow down now to go faster next year.
Invest extra time and effort to de-complexify your plan.
Smart people tend to make things detailed and complex. However: Your plan is good if you have managed to boil it down to its fundamental essence – so that your strategic message doesn’t get lost in translation when you communicate it to your employees.
Create alignment with your leadership team.
As CEOs we like to think that we listen to our teams, while they often don’t feel listened to: we satisfy ourselves with superficial agreements and don’t go deep enough to surface disagreements. The way your strategy planning workshop is facilitated has a tremendous impact on team alignment – and hence the way your strategy will (or not) be executed. Here are some facilitation ideas:
- Ask one of your team members to play devil’s advocate (“What is the #1 reason why this would not be a good idea?”).
- Ask another one to play your Core Customer and take part in the strategy conversation from the customer’s point of view.
- Track how long each speaks in your strategic meeting; if you speak more than other participants, you haven’t listened enough.
- Keep quiet for 5 seconds before saying anything – so introverted team members have a greater chance to speak up.
Discuss the right topics with your team at your strategy planning workshop.
This agenda will help you define an actionable strategy:
- Reflect on the year completed: what went well and what should go better next year?
- Discuss key changes inside and outside your company. What has been happening with clients and suppliers? How are competitors evolving? Tools like a SWOT analysis or Porter’s 5 forces can help reflect on this.
- Strategic differentiation: What makes you different in the eyes of your Core Customer? What do you need to do next year in order to accentuate your strategic differentiation and avoid commoditization?
- Define your 3-year plan: what are your 3-year goals, and which three to five strategic initiatives do you have to put in place in the next 3 years to reach them?
- Define your 1-year plan: among these 3-year initiatives, which ones do you need to work on next year, and what do you want to achieve? What are your financial and non-financial goals for next year?
- Define two to three Q1 quarterly priorities, that will enable you to move closer to executing your 1-year goals and priorities – which will put you on the right track to achieve your 3-year goals. Make sure that each quarterly priority has:
- A clear description of what success looks like – to align views on expectations.
- One (and only one) person accountable – who will ensure that the priority gets executed on time.
- A way to track progress on a weekly basis (e.g. a 13-week plan) – so you can take corrective actions along the way.
The sequence of these topics is not random:
- Debating what you should do better next year forces you to address conflicts head-on in a constructive manner – which will help you have better discussions later in the day.
- Tackling the 3-year plan first and then working backward helps see the bigger picture – and by the time you get to the 1-year plan, you and your team will have a clearer view of what is truly essential in order to move in the right direction.
- It ends with very tangible quarterly priorities phrased in such a way that everyone knows what they have to work on the following Monday – and will help you turn strategy into action.
As a business growth coach, I work with founders of mid-market companies who are frustrated because their business is not growing the way they want; my passion is to help them identify and remove the growth roadblocks they have been hitting so they can grow faster and with less pain. Sometimes these issues stem from a strategy that looks good on paper, but that is not actionable. I help them gain team alignment and convert their strategy into concrete next steps so that they can execute it with confidence. I would like to learn about your growth roadblocks; contact me to discuss at Xavier@AmbroseGrowth.com.