We recycle the same statistics about the failure of strategy because we’re still planning and executing the same way we were in the 90s. (Case in point – this 1995 HBR article and this 1994 Forbes article.)
That isn’t to say the rhetoric isn’t tinged a little differently now or that organizations haven’t continued to develop and grow their perspectives. But as a whole, the strategic planning process is the same as it’s always been: Leaders spend days at off-sites creating ideas, building complex spreadsheets to track their plans, never build new process adoption, deprioritize growth initiatives, and then find their metrics in the same place year after year.
While data has been leveraged to transform marketing (social media ads), music (Spotify), and even our daily commute (Waze), planning professionals are not using the information to analyze past performance and build an effective, customized, proactive future state of transformative planning and execution.
My stance is that the path to the future of planning reveals itself through a culture built around Value Realization. The companies that will change the way planning is done won’t just focus on how much of their plan was completed, but on the value initiatives that have driven the organization and how to use this information to adapt their business plans over time.
I had the opportunity to present at AchieveIt’s Leadership Circle with my colleague, Joe Krause, on this very concept – how organizations can evolve into the future of plan execution by changing their ideation techniques and focusing on Value Realization. In our discussion with 25+ strategic execs from across North America, we outlined 5 major steps organizations must take to enable a focus on value.
1. Recognize the Why
Organizations often focus significant effort on two areas of strategy: the groundwork Mission and Vision of the organization, and the projects/initiatives/tasks that need to be done.
We’re strong advocates of an accurate Mission and Vision, but they’re not meaningful on their own. Successful organizations align their true purpose to the activities and outcomes of their plan.
Most organizations suffer from a giant gap between the Mission/Vision and the work itself. Employees disengage because their work doesn’t feel important or connected, and it’s hard to uncover whether activities are moving the organization toward the Vision.
Sometimes you need to broaden your scope from your documented goals to analyze what you’re trying to accomplish at a macro level – and then work backward to reestablish your tactics.
For example, Kaiser Permanente struggled for years to reduce summertime Asthma-related events in New York City. When they took a step back, they used their Mission to “improve the health of our members and communities we serve” as their anchor. After a reframed analysis, they uncovered the cause of Asthma events in the city was a lack of air conditioning and pollutants aggravated by the heat. Instead of focusing on traditional healthcare strategies, they increased access to in-home air conditioning at a fraction of the cost of care.
They drove their numbers in the right direction by choosing new initiatives that aligned with their ultimate Why.
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2. Create Substantive Outcomes
With a clear understanding of your Why, it’s important to understand how you’ll know when you’ve reached your destination.
A real-life example: If your goal is to be a healthier person, you won’t wake up one day and know, “YES! I am now a healthier person.”
For many people, your health goal is tied to a quantifiable metric, or lag measure (e.g. decreased blood pressure, body fat percentage, or body weight). These lag measures are supported by micro-goals, or lead measures (e.g. daily active minutes, macronutrient goals, calorie intake, etc.).
This is commonplace in our personal lives, but many organizations forget their lead and lag measures, the key quantifiable ways to track and measure success. If your goal is, “Improve our product,” remember to define how you’re going to make your product better, and what you’ll measure along the way to know when you’ve achieved your goal.
Organizations can also track too many metrics. This also makes it difficult to clearly report on progress, with too many variables to discern how activities are impacting outcomes.
Successful organizations develop just a few (3-5) critical outcomes that will measure plan success so they can quickly gauge the effectiveness of their tactics and readjust as needed.
3. Align Activities to Outcomes
Alignment is an oft-used buzzword, but the best definition is “clear strategic intent and accountability.”
How do you create strategic intent? The work (strategies, initiatives, projects) should each align to one of your 3-5 critical outcomes.
Your plan shouldn’t resemble a to-do list, but more placement of bets. How will we reach our new business target of $10M? By executing these 5 projects. While no bet is a guarantee, ensuring the clear alignment between activities and outcomes will create insight into cause and effect so you know which tactics affect which outcomes and can make impactful adjustments.
Having trouble aligning your work to big-picture outcomes? For many organizations, this process uncovers one of two scenarios:
1) Work that isn’t aligned anywhere means it shouldn’t be worked on. If it’s not driving a strategic outcome, it’s not worth spending the time and resources.
2) Work that isn’t aligned anywhere means a strategic outcome is missing. Defining your big 3-5 substantive outcomes can be difficult, so this is another technique to work backwards to find which 3-5 overarching goals are most important to your organization.
4. Monitor Results
Now for the fun part – tracking and monitoring. (While many rely on Excel to track their plan execution statuses, hopefully, we don’t need to convince you that there’s a better way.)
As you begin monitoring results, it’s important to balance the quantitative and qualitative information to understand whether initiatives were successful.
While this seems simple, most organizations stop tracking results when their planning year is done. Projects, once implemented, take time to show results that satisfy the original overarching goal. If your organization isn’t reviewing results after the work is done, you’re only measuring project completion, not program efficacy. Without this critical data, you’re unable to learn and adapt or determine an ROI.
Successful organizations determine a frequency to review progress on old initiatives and goals, not just current ones. By incorporating this into your reporting process, you’d be surprised to see how lag measurements change based on the performance of historical initiatives.
5. Inform Decision-Making
What does your organization call the process of creating your strategic plan? Is it ever referred to as a “strategic planning cycle?”
While this is one of the common terms, for many organizations it’s anything but a cycle. A true cycle would mean the activities and outcomes of one year inform the next year’s plan.
Unfortunately, too many companies rely on one of two “techniques:” 1) The lazy approach where any unfinished items are rolled into the next plan by default without analyzing their relevance, or 2) the shiny object pitfall where the new plan is chock-full of ideas from that recent conference you attended.
Ideally, your plan shouldn’t solely be a rollover of unfinished projects or fancy, new ideas, but more of an adjustment on the successes and failures of the previous year.
Value Realization is the Future of Plan Execution
While these five steps are basic, each is pivotal to enable an organization to focus on Value Realization to plan for a more successful future. Most organizations have some combination of these five elements, but it takes all of them in concert, plus a focus on value, to uncover new ways to transform organization planning.
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