Overcome "Why Strategic Plans Fail", for a Breakout Strategy

By Doug Treen

Organizations often fail to reach their potential growth. The book identifies the hidden dilemmas and pitfalls of strategic planning. It creates awareness of the planning traps, so companies can create a breakout strategy. This is not another theoretical book. It is written for the Board, CEO and Executives who are responsible for creating the company's future.It is a hands-on book reflecting the practical insights of the author's own experiences conducting strategic planning. It includes process guidelines along with an organizational assessment tool to identify areas that an organization needs to work on to create strategic success. The book emphasizes participative planning, awareness building, reality checks, innovation, differentiation, tactical testing, execution, change management, perfomance planning and strategic controls.
Above all the book will enable your firm to come to grips with its organizational capability, enabling it to identify new opportunities for a breakout strategy.

• Language: English
• Publisher: Trafford Publishing
• Release date: Mar 28, 2012
• ISBN: 9781466921467

Book preview

OVERCOME 

Why Strategic Plans Fail, 

 For a 

 BREAKOUT 

 STRATEGY

DOUG TREEN

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© Copyright 2012 Doug Treen.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the written prior permission of the author.

ISBN: 978-1-4669-2117-7 (sc)

ISBN: 978-1-4669-2146-7 (e)

Trafford rev. 04/10/2012

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Contents

Preface

Chapter One: Introduction to Strategic Planning

Chapter Two: Strategic Boot Camp, A Dialectical Process

Chapter Three: Hierarchy of Why Strategic Plans Fail

Chapter Four: Strategic Formulation

Chapter Five: The Pitfalls of Strategic Planning

Chapter Six: Organizational Strategic Paralysis

Chapter Seven: Organizational Unconsciousness

Chapter Eight: Building Strategic Awareness

Chapter Nine: Strategy and Structure

Chapter Ten: Strategy and Process

Chapter Eleven: Strategy and People

Chapter Twelve: Creating Core Competency

Chapter Thirteen: Strategy and Change

Chapter Fourteen: Organizational Readiness

Appendix: Strategic Planning Diagnostic Questionnaire

For my son, Adam

Preface

There are a lot of great people at Apple, but they’re doing the wrong things because the plan has been wrong, he said. I’ve found people who can’t wait to fall into line behind a good strategy, but there just hasn’t been one. The crowd again erupted in yelps, whistles, and cheers."

Steve Jobs, before re-joining Apple, while CEO Pixar guest speaker at Macworld Boston 1997 after Apple sales had fallen 30% in two years.

Steve Jobs, Walter Isaccson

Strategy is existential. Ignore it at your own peril because it is fundamental to survival.

Strategy originated in the fundamental thinking of survival of groups, tribes and societies as tactics, methods, tricks, plans and the stratagem of war. Sun Tzu about 500 BC wrote in China, The Art of War, (Translated by Samuel B. Griffin, Oxford University Press, London, 1963). This book was the first recorded treatise on military strategies to be used in war. He introduced in writing many of the concepts used in strategic analysis today: environmental analysis, competitive intelligence and analysis, strengths and weakness, manoeuvres, terrain or field analysis, offensive strategy, etc. Marketing has grown from these roots of how to out-manoeuvre the enemies and competitors, today referred to as marketing wars. Strategy is basic for survival. It is not an option if you want your company to survive and thrive. Continuing to do the same things amidst a changing competitive environment will put any company out of business. Strategy is a basic response to the changes of competitors, customers and the environment. Strategy is the best, if not the only pathway to a company’s future success. Without a viable strategy a company’s future will be in peril.

The management challenge is that managers find it difficult to separate themselves from the pressing immediacy of day to day operations to create and implement a new robust strategy. However, managers must learn the art of leading the changes towards the new strategy while simultaneously juggling with daily operations. Through many trade-offs, tough decisions and constant transformation, the daily operations become aligned with the long term strategy. Management must navigate through conflicting demands of employees, the board, suppliers, shareholders and customers while attaining short term results. Amidst such stakeholder constraints, management must make visionary changes to implement a future strategy. Strategic management is tough but necessary to create the future. A new strategy is the distant lighthouse to arrive at a future success while constantly navigating through the perilous rocks, heavy waves and changing winds of the present. The light of this vision helps connect present decisions toward the future strategy. Without a comprehensive strategy a company will waste time on disjointed efforts and initiatives. One division may contradict the initiatives of others. Firms will lose their edge in the activity trap of failing to have a focus or mission. Lost revenue and cost overruns destroy a firm without a focused and coherent strategy. This is why doing strategic planning is essential to a company’s success. Helping you avoid the causes of strategic failure is my goal in this book. Strategy as an offensive launch of the company’s power also has a defensive component built in. Strategy, as marketing war is always urgency in action, not just planning. I define strategic failure, as the failure to have a viable plan to achieve a company’s full potential. It is equally the failure to execute such a plan, to attain those results. If the strategic plan fails it is usually a matter of degree of not reaching a company’s potential.

This book was written for the busy Board Member, CEO and other executives to help build a viable strategic plan. It will also present an early warning system to identify the pitfalls of strategic planning, and to prevent the gaps in the execution of a strategy.

Making strategic plans can be deceptively if not blithely easy; making them work is hard. This is why strategic planning itself must include how the plan could be executed. A strategic plan is incomplete without a viable execution plan. My purpose is to expose the hidden organizational planning factors which can cause strategic plans to fail. The failure of strategic plans to reach their full potential is perhaps the norm. Creating awareness of these pitfalls will help prevent such limits or outright failure. The most common strategic dimension which causes failure is "organizational capability". I will show how such failures can be avoided by focusing on the organizational capability as a primary foundation of strategic planning. This capability includes the ability of a company to do strategic planning and to execute it. The lack of emphasis of organizational capability in essence is the main trigger of strategic failures. Most will recognize after it is too late, that the main cause of the strategic failure is a failure to execute it. This implies that the plan was unrealistic. Often few recognize or understand the causes before the fact, due to organizational blindness and resulting paralysis which led to this failure. Consequently, there is a tendency to repeat such unconscious errors of history which hold back organizations from reaching their potential. The solution is to proactively address the organizational capability to execute in the strategic planning process itself. This book will show how.

Why do I emphasis organizational capability in doing strategic planning? It is because I have become sensitive to such vital organizational success factors in my roles as an organizational developer and practitioner. My qualifications to write this book includes experience as a management consultant of organizational development for ten years, as well as an EVP, Human Resources in the pharmaceutical, financial and automotive industries. I learned in the trenches the hidden but real potential causes of strategic failure. I have also served as a Vice-Chairman of a financial institution where I led the strategic planning process. I began as an academic with a PhD teaching social theory but yearned for concrete field experience to make a difference, only possible on-the-street and so my career rotated between teaching, consulting and management. After completing my MBA, I taught MBA students Organizational Behaviour part time. Throughout this time I have conducted strategic planning programs in three industries. I have further published numerous books and articles reflecting my organizational experience. This book focuses on how to avoid the causes of strategic failure to create effective and robust strategic plans which will allow you to break out of your orbit. The reason why I am explicitly focusing on reasons why strategic plans fail is because I have learned through the hard lessons of the trenches, why my own original academic approach was limited. The book reflects this learning and what I did to improve. Experiencing the organizational and human resources traps and barriers to robust strategic planning helped me go beyond the general theoretical academic mechanics of strategic planning. This valuable real life learning beyond the textbooks, as an active strategic planner is what I wish to share with you in this book. As such this is an insider’s book for practitioners. The book exposes the causes of failure to allow you to rise beyond for a breakout strategic plan which every company wants. Strategic success is possible only by avoiding the minefield of the strategic traps which lead to failure. This book will show how to do this. I am eager to share with you my experiences from the strategic and organizational trenches, so you can avoid the many strategic pitfalls and create your own organizational success.

Why bother making strategic planning a priority? It needs to be the number one priority if you want to control your own destiny. Past successes are no guarantee of future wins. Old visions may be out of sync with new market realities. A company’s team may not have continued to develop the competencies needed for the future. Resources may be tight and so the urgent need for trade-offs and prioritization may make the critical difference between profit and loss. Any company will face a changing industry, new competitive threats and even new hidden opportunities. How many companies had strategic myopia and ruled out, developing a laptop or a handheld device because they were in the mainframe or desktop business? How many companies turned their backs to wireless opportunities because they wanted to stick to the knitting of their core equipment? RCA Victor and Marconi no longer exist because their vacuum tube radio strategy was replaced by transistors, eventually replaced in turn with various wireless communications and computer devices driven by integrated circuits, etc. At the time their management could not see beyond the success of their core products and missed new opportunities. How many hidden opportunities is your company blind to?

Without strategic planning companies may lose such new opportunities or even fall victim to another company’s new strategy. Such new opportunities should not be thought of as extraneous to a core business but as an essential part of its strategic future. Companies sticking to their knitting like the above are destined to become extinct. Being complacent due to past successes is the veil that blinds management to new innovative opportunities. Strategic planning aims to overcome strategic myopia and create that breakout to assure your future success. In the history of business, these examples are not the exception but represent the normal progress of winners and losers. Strategic planning if done right creates winners. Growth in the long run comes from new opportunities which will transform and radically change the business.

Environmental and competitive change is everywhere. The computer age has exploded the pace of change. The lifespan of any strategic business model has collapsed. Instant data on public corporations makes their metrics and existing business models more transparent and vulnerable to attack, particularly those products with high margins. Amazon has destroyed many book sellers even though those retailers had business models to consolidate their mortar and brick locations. Internet banking has forced change in many traditional banks based more on a key location and a customer relationship business model. CNN forced change to the traditional TV news business model. Strategy requires an ambitious mindset where management is prepared to embrace change. The list of the top companies falling off the Fortune 500 list is a testament to the normal decline. This is caused by resting on past success and falling into a comfortable rut. Failing to re-think a strategy in a critical way by taking new environmental threats and opportunities seriously is the common challenge. Consequently, I espouse a more radical planning method which prevents complacency by structuring a strategic critique into the process.

Failure to innovate to create competitive advantage makes companies vulnerable to those which do. Not planning to grow is risky. However standing still without a dynamic strategy to grow is sure death. Your competitors want to eat your lunch and celebrate their great innovative strategy and superior management. Corporate success is no accident. Success simply will not happen without a strategy which can integrate the company towards a coherent new vision given the new emerging competitive environment. Strategic planning is not an option for those who take winning seriously so it’s worth doing it right!

Strategic Challenge

There will be many who will think that they are doing strategic planning well and that they will not need to read this book because they have been successful. While this will be so in certain cases, I offer the following strategic test to help judge your own level of strategic preparedness for the future.

(1)   Is the old way of how your firm conducts strategic planning sufficient for enabling the firm to breakout as an industry leader?

(2)   Do your senior managers see strategic planning as the ultimate improvement vehicle for attaining competitive advantage or do they see it as an administrative annual routine or even a necessary evil?

(3)   Does your senior management understand the current environmental changes including: competitor, customer, technology, supplier, societal values, economic and political trends?

(4)   Does your senior management have a fresh vision and process reflecting how to take advantage of these changes?

(5)   Does your company