The Big Fail
“We’re number one! We’re number one!”
“It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.” – Franklin D. Roosevelt
Let’s start with the best news. Strategic planning is the number one most used business tool globally! 45% of organizations use it, according to Bain & Company’s annual survey of executives. It has scored at or near the top for years. (Bain & Company Management Tools Survey, 2013)
Here’s some more good news. 58% of organizational leaders say strategic planning is extremely or very important in their organization’s success. That’s according to Forrest Consulting’s 2013 Strategic Leader Survey, conducted last year of 314 for-profit and non-profit organizational leaders in decision-making roles, which tracked closely with the results of a similar survey we conducted a year earlier and with a 2006 McKinsey & Company survey. (Our survey reports are available for download at www.forrestconsult.com).
But, unfortunately, the reality is not nearly as good as it might seem. Organizations of all types are not living up to their potential.
Our finding that 58% of organizational leaders say strategic planning is extremely or very important in their organization’s success means 42% say it isn’t very important in their success: Four of every ten organizational leaders say strategic planning has little or no importance in the success of their organization.
Bain’s finding that 45% of organizations use strategic planning means that more than half of organizations don’t use it, according to the executives polled. Strategic planning may be ranked first among tools, but that’s poor solace given its greater disuse.
The “big fail”
“Most people don’t have a plan. That’s why it’s easy to beat most folks.”
– Paul “Bear” Bryant
Many leaders don’t get it.
Let’s start with our finding that 42% of leaders say planning is not important. The woeful reality that a sizeable share of organizational leaders don’t think strategic planning is important for organizational success.
It gets worse: According to our 2012 Strategic Leader Survey, 74% of leaders say “we don’t use a formal planning process to make strategic decisions.” And 57% say that strategic decisions are made by the CEO or a small group. Like Britain during the American Revolution, in a majority of cases the top leader or just a small group are making the strategic decisions for their organization.
Even when organizations create a strategic plan, there is failure. According to the Balanced Scorecard Collective, more than 70% of organizations with a plan fail to implement it. For these organizations, planning is an exercise, not a core process. (Please note that even Bain & Company calls strategic planning a tool, not a process. I think that’s a disservice.)
The Balanced Scorecard Collective also reports that 60% of organizations don’t link strategy and budgeting. Hand in hand with implementation issues, a disconnect between strategy and resource allocation often exists. Resources are not focused on implementation.
“By failing to prepare, you are preparing to fail.” – Benjamin Franklin
The bleak picture of the use of strategic planning painted by the data presented above calls for an answer. The response could be, “Who cares?” If strategic planning coupled with effective implementation were not such a powerful process for driving greater success, a shrug of the shoulders might be called for.
However, the case for strategic planning and effective implementation is compelling. Research, some of it quite recent and not well known, demonstrates the benefits that accrue to organizations which use strategic planning – longevity, growth, financial success and other less tangible but very important payoffs.
In future posts – and in our upcoming book, MOVE! Bridge the strategy gap for greater success – we’ll present the persuasive case for strategic planning. We’ll dig into why organizations don’t plan or plan and implement poorly. We’ll reveal what our research shows to be keys to planning and implementation success. And we’ll present an action plan for moving the organizations we care about to achieve greater success by making strategic planning an effective, on-going core process.
But why wait for the rest of the story? Why not get the organizations you care about planning and implementing now? Then when you read our future posts you will see just how smartly you have acted!