The strategic plan is no doubt very important.
I’ve worked with a few CEOs and other executives in different jobs I’ve had, and I’ve had the honor of meeting a couple of startup founders in different capacities as well. These are all very smart people, and very capable people — although they tend to get off the rails in terms of focus, and more on that in a second.
One term you hear a lot among high-level guys (and gals) is “strategic plan.” It’s almost breathless anticipation when someone talks about it. The belief — or it seems this way — is that your strategic plan is a be-all and end-all. You’ll draft it, implement it, and it will guide you to revenue and growth! And if it doesn’t, you’ll adjust to a new strategic plan — a-ha, a “pivot” — and that will guide you to vacations in St. Kitt’s.
There’s a big problem with your strategic plan, though.
Strategic Plan Flaw No. 1: How they’re designed
Most companies still operate in a top-down hierarchy, and in top-down hierarchies, the general belief is that only the top levels — who have the most experience, expertise, and/or responsibility + “skin in the game” — can drive strategy. The strategic plan must come from those levels, and then be followed and worked on by lower levels. (More on this in a second as well.)
This idea of top levels setting strategy is logical in one way. You can’t theoretically give every employee buy-in on strategy, especially at a 10,000-employee company. And if the strategic plan tanks, the CEO is the one getting canned first — so it makes sense that the CEO would drive the strategic plan. Yep.
Here’s the problem, however:
- Strategy planning is about new ways of thinking, i.e. organizational breakthroughs
- In reality, organizational breakthroughs can come from anywhere
- They often come from lower levels with more success because those levels are closest to the customer or end user
Alright, so how do we reconcile this?
Let’s say the executives can still set the strategic plan, because that seems pretty logical. OK. Cool.
But the rank-and-files and middle managers are dealing with issues and customers all week, so they know some of the core issues that should drive the strategic plan. How do we get their input?
This part has to happen. If it doesn’t happen, all you have is a company where the executives do everything in a vacuum, hoard the strategic plan, hoard the financial metrics, and then just expect everyone else to be an executor — because hell, that’s how those executives rose up!
That worked in 1970. Here’s the problem with 2016: a 12 year-old girl in Mumbai has the same information on her phone as a Fortune 100 CEO did in 1970. As a result of this ‘Information Age’ concept, we can’t operate according to the same management principles or formulate our strategic plan in the same way.
But … many companies still do.
Strategic Plan Flaw No. 2: The chasm
You’ve probably seen this graphic, yea?
As we typically use this chart, it’s about product development or technology adoption — “the chasm” is how you move from a select group of cool kids (hipsters!) using your thing to a ton more people using it. You gotta cross the chasm. In the modern era, you predominantly do this with a clean, UX-friendly interface.
We don’t often apply this adoption cycle concept to leadership or strategy, but we really should — and here’s why.
There’s actually a massive chasm in terms of setting up any type of strategic plan in any organization. How so?
- Leaders think at a macro (big-picture) level
- Regular employees think at a micro (daily task) level
Now, you may have arrived at this part and think to yourself: “My boss is a micro-manager. He/she doesn’t think at any type of big picture level.” Well, see … that’s likely true as well. But that comes from a whole different set of ideas and circumstances: namely, most people at work don’t want to be seen as incompetent, so they focus in their areas of perceived strength. Always remember: we want work to be logical, but because it’s made up of human beings, it’s actually an emotional place.
Back to this leadership chasm, tho: you’ve got executives designing a strategic plan at a macro level, but then … hmmm … the work that drives said strategic plan will happen at a micro level. What now?
Strategic Plan Flaw No. 3: Alignment of strategy and execution
This is crucial. Like, absolutely crucial. Like, this is the definition of what ‘business’ really is.
Had a job recently where the CEO and his lieutenants would often talk of culture and purpose and meaning and connection. I’d then go back to my desk and be told to update a PDF from four years ago because “I dunno, I think someone needs it?” This happened about 14–15 times.
So here’s the strategy: “Culture! Purpose! This is how we make a difference and grow!” Macro.
See the lack of alignment between A and B?
If you want your strategic plan to work, you need to be able to align strategy and execution. Thing is, most executives cannot do that:
Here’s the dirty little secret on most senior leaders:
- They have a lot of pressures and responsibilities
- Most of those tend to relate to money or making money
- Because it’s uncouth to lead every meeting discussing money or making money, they come up with other “strategic-sounding” terms they can couch that in
- (Thank you, consultants!)
- They speak on those terms in meetings and e-mails
- The rank-and-files assume that’s part of the strategic plan
- But because it’s really all just buzzwords and fluff, there’s no way to align that to day-to-day tasks
- Organizational priority is now dead in the water
- Every middle manager in the organization is now telling their charges that everything is top priority
- This is the path to 13% global workforce engagement, right here
Strategic Plan Flaw No. 4: Strategy isn’t operations
Strategy isn’t the same thing as operations, although many, many, many senior leaders do not realize that.
Strategic Plan Flaw No. 5: Compensation alignment
If you want a strategic plan to actually go anywhere, you need to tie whatever the strategy is to some kind of benefit, perk, or compensation for — wait for it — everyone. The problem or flaw here is that most organizations design really elaborate methodologies for extra compensation for the top people, and then everyone else down below — doing the execution-level work — gets some kind of odd percentage deal that no one really explains clearly.
So you’re trying to execute a strategic plan, but the people who will actually execute it day-to-day as you run to executive meetings … those people have no clear benefit structure for making sure the strategic plan works?
I realize most people are unclear what their salary even represents, but why would I work hard executing on a strategic plan if I have no understanding of my perks? And then I’d probably become a tad resentful if I saw the perks of everyone else on full display.
So what can be done for a better strategic plan?
Here’s what I’d argue:
- The top executives can still determine the strategic plan, but …
- They must involve others in terms of feedback and pain points
That’s “Segment A.” That has to happen.
- Each element of the strategic plan …
- … must be mapped to departments and day-to-day tasks.
That’s “Segment B.” That has to exist so there’s a connection between strategy and 3:42pm on a Wednesday.
- The strategic plan needs 4–6 KPIs across all levels, and …
- … if those KPIs are being hit, everyone can get compensated somehow.
That’s “Segment C.” Without this, the incentive structure is dead.
Now, I just condensed a very tricky topic of creating a strategic plan down to essentially six bullet points. Obviously, it’s not that simple. But as a framework? You bet your bottom dollar this can work.
If you want to talk to someone who’s really good at connecting the strategic plan with the daily execution, by the way, check out Teamworks based out of Toronto.
Anything else you’ve seen in terms of how to set forward a strategic plan successfully?
My name’s Ted Bauer; I blog here regularly and you can learn about hiring me for freelance and contract gigs as well. You can also subscribe to my newsletter.