Top 10 Mistakes in Strategic Planning
Anne Ogden, Headwaters Group
Using strategic planning in an organization to develop strategies, advance change and
improve implementation has proven challenging for many. A review of some of the
common mistakes made in strategic planning may help your organization eliminate poor
practices and establish more effective ones.
1. Data Poor (and Time Rich)
While analysis does not constitute planning—and surely is not strategy development—
it’s often an under-used tool within a planning process. Instead of letting data drive
planning, some organizations simply “log” the hours in lengthy planning retreats circling
tired ideas and old models of thinking. Data can help teams understand the status quo,
and agree on key assumptions. With careful attention to objectivity, data from
customers and markets can point to new directions and uncover ideas that wouldn’t
typically emerge in a planning session. It’s a sure way to challenge conventional
thinking in an organization or an industry. Lastly, data can deepen the understanding of
alternative futures, and strengthen critical thinking in your planning.
2. Over Programmed
In his 1994 Harvard Business Review article, “The Fall and Rise of Strategic Planning,”
Henry Mintzberg differentiated between formalized strategic planning and strategic
thinking.
“…Strategies cannot be developed on schedule and immaculately conceived. They must
be free to appear at any time and place in the organization, typically through messy
processes of informal learning that must necessarily be carried out by people at various
levels who are deeply involved with the specific issues at hand.”
While “programmed” planning can assist with analysis and implementation, there must
be room for the informal process of invention, learning, and experimenting.
Programmed planning can solidify old models and conventional wisdom. Strategy
development, however, thrives on new ideas, divergent thinking and challenging old
ways. Finding a good balance between open space and more programmed planning is
part of the art of effective strategic planning.
3. Failure to Engage
It’s not difficult to envision a strategic planner dragging management staff by the scruff of
their necks to yet another planning retreat. It happens all the time, and there’s a reason
for it. Often those designing a planning process do so without considering some critical
dynamics:
What is the environment and culture and how will strategic planning work
best? (vs. what’s the new, best thing promoted in the management press?)
Who is the audience, and what do they expect?
What do operations managers need from strategic planning, and how can
they get it?
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Strategic planning must help senior management develop and advance strategy, and
must give something back to operations managers. It must bridge the needs of all
participants as a means to keep them engaged and energized. One simple step is to
make sure that those necessary for developing and implementing strategy have a hand
in designing the process up front.
4. Inattention to Team Dynamics
Most organizations use teams for the more formal part of strategic planning. Yet, a taskdriven facilitator often misses important opportunities to help the team perform better. A
well-functioning team will typically mean improved strategic thinking, more creative
energy, stronger commitment and eventually, better implementation. Take advantage of
a team’s strengths, and take time to address team dynamics as part of your planning
work.
5. Bias
If strategic planning is approached as a tool to open up the process of setting strategy
and to allow space for new ideas, the early stages must ensure that biases toward
certain strategies or outcomes are kept at bay. A lengthy process to confirm a senior
manager’s going-in bias is a poor use of organizational resources. And, using strategic
planning to promote a new management technique typically fails to produce any clarity
on strategy. Be honest with the purpose of planning, and be clear on the boundaries
and scope before even starting a new effort.
6. Weak Link to Financial Plan
While strategic and financial planning are inextricably linked in many industries, health
care organizations struggle with this. Investing time and resources into strategic
planning without such a linkage is not only inadvisable, but borders on irresponsible.
Testing new concepts or strategies for financial implications is critical, and evaluating
alternatives against their impact on financial goals improves the level of decisionmaking. In addition, a weak link to financial planning often means that new strategies
are under-resourced and old strategies, found to be ineffective, are never “cut off”. Build
these financial connections and organizational strategic planning will be a much more
effective tool.
7. Fear of Making Trade-Offs
So many planning sessions produce a laundry list of “priorities”, it’s no wonder managers
tire of the whole process. One underlying cause of these “to-do” lists is senior
management’s unwillingness to make the difficult trade-offs that effective strategy calls
for.
“Trade-offs are frightening, and making no choice is sometimes preferred to risking blame
for a bad choice.” Michael Porter, Harvard Business Review, Nov.-Dec., 1996
While there are times where the best decision is to keep your options open, more often
than not strategic planning reinforces a natural, but ill-advised aversion to committing to
one path. There’s always room for one more goal and one more tactic. While giving
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the illusion of accommodating all the good ideas, a strategic plan that forces no tradeoffs is in fact, leaving the ultimate decision up to the vagaries of organizational politics
and chance. Some strategies will be dropped from this list, as resources are limited, but
management won’t have a voice in which ones these are.
8. Inadequate Use of Scenarios
Whether they are the scenarios developed in the manner of Royal Dutch/Shell,
alternative environmental futures, or testing of alternative strategies, some use of
scenarios substantially enriches strategic planning. This work dramatically improves the
strategic thinking of a team, broadens their “peripheral” vision, and opens up the process
to much more progressive and innovative thinking. For example, testing of alternative
strategies can educate a team quite quickly on the sensitivities of their assumptions.
Such analysis and discussion will help teams make educated choices and be more
prepared to make adjustments as the market changes.
9. Poor Implementation
While some organizations function best with only a general sense of direction and
strategy (not much detail on “how), many others need planning support to improve
implementation and track results. Sometimes for the simple reason that teams run out
of steam, the deployment element of strategic planning is often poorly executed.
Communicating the plan, seeking understanding, linking it to other management tools
and building in feedback loops are all part of effective deployment. (Note: Baldrige
Criteria provide a good resource for conducting a self-assessment of both strategy
development and strategy deployment.) Organizations can maintain some flexibility in
their strategy, while still putting in place some basic tools to improve the odds that they
will achieve their intended results. It’s worth taking the time.
10. Impatience
After setting a new mid-term or long-term course through strategic planning, some
organizations abandon their plan after a year or two and start all over again with a new
focus and new direction. When market forces call for such a change, it’s a responsible
change. However, often organizations haven’t given the strategic plan the chance to
achieve results, and the “new” plan is really a sign that leadership lacks confidence that
they got it right the first time. Stay close to the market and operations, and be ready to
adjust your plan based on solid data. However, resist the urge to tamper and recognize
the organizational costs of major strategic change.
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