Three actions and four questions to make your strategic plan more successful
Has the positive energy coming out of your annual strategic planning session been replaced with a nagging fear that achieving this year’s goals will be more difficult than anticipated?
Don’t worry. You aren’t alone.
Only 2% of leaders expressed confidence that their organization would achieve 80—100% of their goals according to Singapore-based Bridges Consultancy. An article in the Harvard Business Review suggests that strategic plans fail to fully achieve their desired goals between 60—90% of the time.
There are many valid reasons why strategic plans fail. There is one, however, that is seldom mentioned:
Strategic plans typically assume that the future is connected to the present by a straight line drawn by players and circumstances we know today.
Disruption rarely comes from a known competitor. Taxi companies could have made Uber and Lyft inconsequential by planning for a different future. They didn’t. Imagine how Blockbuster’s future would be different had they pursued the offer to buy Netflix rather than dismiss it.
Financial services are no different. Coca-Cola was the earliest known experimenter with digital payments back in 1997. PayPal arrived in 1998. Google Pay launched in 2011, and Apple, Android, and Samsung quickly followed suit. There isn’t a credit union or bank among them.
It is not just technology. Not one of the strategic planning sessions I conducted in the fall of 2019 considered global pandemic as a potential threat.
The 21st Century has been defined by uncertainty at every turn. We thought change was a big deal in the 1990s, but it is nothing compared to what organizations feel today.
It is no wonder that leaders and organizations are reminded of the words of Mike Tyson as they look at their strategic plans: “Everyone has a plan until someone hits you in the mouth.”
And yet, the words of General Dwight Eisenhower still ring true: “Plans are worthless, but planning is everything.”
Unfolding circumstances and events often render the details of a plan irrelevant. Rigorously exploring options and scenarios for the future, on the other hand, opens the door for better results.
How to make our plans more useful and relevant
We can improve our opportunities for success in a world of uncertainty by adopting the following three actions and asking four new questions into our planning process. The nature of the written word requires a sequential order of explanation for ideas that are interrelated.
Action 1: Plan from the future AND the present.
Imagine a goal creating a targeted increase in your credit union’s active membership. Planning only from the present means that you look at where you are today minus historical average losses (churn rate) plus what you think you can accomplish in the next 12 months.
Planning from the future and the past, in contrast, forces you to:
- Plan backwards based on the membership you want at a specific point in time (5 years for instance),
- Determine the growth you need each year to achieve that target,
- Evaluate the required growth rate against your current position and historical average losses and then,
- Establish a goal for the coming year based on what it will take to close the gap you need to achieve your long-term goal.
Most important, planning from the future and the present forces you to be more creative in planning and executing the activities to achieve your goal.
Question 1: What are the assumptions on which your choices are made?
Planning from the future and the present is easier if we state the assumptions on which a target is set. Using membership growth example, hitting your target is easier if you assume that the universe of potential members will grow. A community credit union might look at population growth projections and be guided by that assumption. An Employer Credit Union or even one with large SEG membership might assume that the future growth of the organizations represented will make the goal possible.
Question 2: What happens if our assumptions are substantially wrong?
Let’s flip the previous question. Now we are forced to examine what we would do if our growth assumptions were wrong. Credit unions with a large membership working in public education, for instance, should consider what would happen if the number of school-aged children significantly declines. A credit union with large SEG membership must consider the implications of an economic downturn, closure, or relocation that alters the number of potential members.
The answers to questions 1 and 2 might change your long-term goal. They might also support retaining that goal and achieving it by exploiting new opportunities. The closing of a large employer, for instance, could result in fewer members. It could also create an opportunity to capture increased market share by offering new services.
Question 3: What must go 100% right to achieve this goal?
This question helps you determine if achieving the goal is remotely possible. As an example, your 5-year membership target will require revision if it depends on a technology solution that isn’t currently in place and would take 18 months to implement … even if you could afford to purchase it tomorrow.
Most important, the answer to this question helps you identify the specific activities that must be monitored to achieve the desired result.
Question 4: What cannot go wrong to achieve this goal?
Imagine building a house knowing that there is a non-negotiable move-in date that must be met to prevent your family from being, in effect, homeless.
You would make a list of everything that could go wrong and actively plan to prevent those things from happening. Extra creativity and effort would be applied to get the project back on track if it fell behind before allowing an early miss to alter our desired outcome.
We should take the same approach with our strategic goals. Unfortunately, the immediate response to something going wrong is to change the goal rather than generate ideas to make up for the disruption. Answering this question helps us accomplish both.
Action 2: Conduct quarterly progress reviews to focus effort and ensure goals remain viable.
The world is moving too fast to rely on annual or even semi-annual progress reviews. Quarterly follow-ups allow us to modify, eliminate, or adjust a goal if absolutely necessary. It also creates urgency for sustained attention.
Results occur when we inspect what we expect. A corollary is that the opportunities to get a struggling initiative back on track increase exponentially with the early recognition of problems.
Action 3: Regularly scout the future.
How much time do you and your team devote to thinking about the future? Not just making plans for what to do next, but really thinking about the future and its implications for your organization?
Warren Buffet reportedly invests 80% of his time reading and thinking about the future.
The easy reaction to that is, “He’s Warren Buffet. He can do whatever he wants.”
Mr. Buffet, on the other hand, might reply, “How do you think I got to be Warren Buffet?”
The wagon trains that crossed the plains to settle the west employed a group of people known as “scouts.” Every day they rode out over the horizon in search of answers to two questions:
- Where is the water that will sustain us on the journey?
- Where are the hostile forces (people or environment) that could harm us?
You and your team should invest regular time to actively explore what might be over the horizon. Make this a regular part of your leadership meetings at least quarterly. Every other month is even better.
Here’s how it could work:
- Choose a single broad category such as technology, demographics, the economy, regulatory change, educational trends, or societal change.
- Ask everyone to bring something to the meeting that represents the water and the hostiles about a trend they have identified.
- Discuss the findings and determine if there is a potential development you should monitor, ignore, or pursue to ensure success on your journey.
- Utilize this information to adapt your goals and performance as needed.
Roger von Oech wrote, “Truth is all around us. What matters is where we put our focus.”
Expanding your planning efforts to better anticipate uncertainty and pursue the opportunities it creates is a good place to start.
