Why strategic planning fails is an assertion that strategic planning fails in the first place, and that the causes might not be well understood. The reasons why strategic planning fails and the rate of failures should not be a surprise to anyone since it would perpetuate another fallacy of planning.
Analysis of Why Strategic Planning Fails
The Harvard Business Review puts the ROI of traditional planning at 34% or less. In fact according to several surveys of top executives only 19% of strategic plans achieve their objectives. Perhaps another not so surprising data point is that among those same executives, only 25% of them are even motivated by the plans they create.
Why then do so many organizations devote so much time and energy to the annual ritual of developing or updating their strategic plans if they are doomed to failure from the start? Just think of all of the smart, well-educated, experienced managers and executives devoting so much of their organization’s limited resources on an activity with such a poor track record of producing results.
Before I get too much farther allow me to offer a you a great summary on The Predictable Failure of Strategic Planning as just one of many great sources of valuable insights. Another interesting and quick read is Strategic Planning Failure. Papers like this will certainly add more value to your planning readiness as an effective counterbalance to all of the gibberish from the planning industry.
But that is not the end of the shocking facts surrounding why strategic planning fails and strategy execution failures:
- 85% percent of management teams spend less than one-hour a month on strategy issues
- Many organizations don’t have a consistent way to even describe their strategy, other than in a large strategic planning binder.
- Only 27% of a typical company’s employees have access to its strategic plan.
- 92% of organizations do not report on lead performance indicators.
- 90% of well-formulated strategies fail due to poor execution.
- 60% of typical organizations do not link their strategic priorities to their budget.
- Two-thirds of HR and IT organizations develop strategic plans that are not linked to the organization’s strategy.
- 70% of middle managers and more than 90% of front-line employees have compensation that is not linked to the strategy.
- Most devastating, 95% of employees do not understand their organization’s strategy.
From the list above there are two reasons why strategic planning fails that stand out the most.
- First, that organizations cannot consistently describe their own strategy.
- Second, that 66% of IT departments continue to develop plans that are not linked to the organization’s strategy.
It is a shame that our collective investment over the years in IT governance and IT control frameworks hasn’t advanced us further than this.
The causes behind strategic planning failures are well understood and described in detail in the references offered here. I suspect anyone that has been forced to endure a strategic planning cycle instinctively knows many of the causes beginning with the process being often very painful to sit through. Planning can be an exhausting exercise made more unbearable by the knowing it is merely an annual ritual not an actionable plan.
Higher Education Strategic Planing
For those experiencing the strategic planning process or any combination of strategic, tactical or operational planning inside higher education you have the added challenge of the process being turned into an academic exercise that in the end:
- Is based on history
- Is lacking meaningful data or forward-looking insights
- Is diluted by consensus or perhaps it is consensus by dilution
- Is intentionally ambiguous and fuzzy
- Is lacking an accountability mechanism
- Is just bad
Why not simply create a strategic plan that says “Do Better”? Seriously – everyone just do better.
After all Google was founded on a simple strategy of Do No Harm in support of their mission to “organize the world’s information and make it universally accessible and useful.”
My instinct tells me we find the elegance of simplicity to be too much of a shock to the senses. I also believe this type of approach places far too much responsibility on the individual to do the right thing and so we resist.
And therein lies the core issue. If we follow a blue ribbon model like the ones depicted here, and things fail, “well we used the model” helps us avoid being accountable. Just look at some of the examples and you’d swear they must be for launching the space shuttle.
The fact is business and organizations don’t move in a linear fashion. Nor do it’s employees or customers behave in a linear fashion. Yet, our strategic planing processes and templates presuppose a linear world:
Mission > Vision > Values > Goals > Objectives > Tactics > KPIs
It’s enough to give me a nose bleed just typing it out. But somehow we must find some form of comfort in the illusion of a scientific method. Otherwise why would we endure the ritual knowing the outcomes?
The reality of our world and therefore the reality for business, organizations, employees and customers is a curvaceous world. There is a high degree of unpredictability, randomness and chaos. Just when you take aim at objective A, objective B comes into sight.
For higher education and especially for the public sector, who’s strategic plan from three years ago or even two years accounted for the economic downturn? How do plans today account for it? What about changing political landscapes?
I am not aware of a single strategic plan in Wisconsin that anticipated the political changes we have seen play out let alone the legislative agenda that has thrust numerous changes on institutions.
Strategic plans and operational plans must allow for the curvaceousness of how events unfold and the fluidity with which situations change. Yes you can still do integrated planning, and pour tons of time into making SMART goals, but it is more important that you build into your plans an approach to allow for creating and maintaining options for uncertainty and for possible changes.
Options planning certainly isn’t new and it does offer a great deal of structure for those who find comfort in it, all while acknowledging the realities of the world and our inability to predict events farther out.
Why strategic planning fails – because we impose a rigid linear methodology to produce a linear plan that does not reflect the world we operate within or the dynamics of higher education. We waste copious amounts of time and energy on components and elements of strategic and tactical plans that never get activated and for which there is no accountability.