Is your strategic plan sitting on the shelf?

Effective strategic planning lays the foundation for a company’s success and leads to significant value creation. However, for many companies, strategic planning becomes a step in the annual budget cycle and any true strategic thinking has stopped or will stop due to time constraints of leaders. One reason for the demise of strategic planning is that many companies, and consultants they have hired, put too much emphasis on the formal process and document. This results in a nice binder for management, with few insights from the process that result in people changing the way they worked.

An effective planning process can be a very effective management tool. It can uncover new markets and opportunities to generate value, unite employees and teams behind common goals, break down silos within the organization, prioritize investments, focus funding and resources on the highest return opportunities and energize an organization. The common goals, language, assumptions, understanding of future opportunities and financial objectives coming out of a successful planning process greatly increases innovation and productivity in a business due to the increased level of alignment in the organization.

Large and small companies alike suffer from the lack of robust strategic planning and therefore can benefit from revisiting their processes. A recent McKinsey and Company survey indicates that fewer than half of executives who responded are satisfied with their company’s approach to planning strategy. Cascades experience is that small company leaders are even less likely to be satisfied with their efforts. These operators are often actively involved in the details of the business and lack both the time and tools to improve their processes. Although the end game is not the process, the McKinsey survey confirmed executives at companies that make good use of a formal process seem to be more satisfied with strategic planning.