Is Strategic Planning Worthless?

It is that time of the year when everyone is scheduling annual meetings and planning sessions. Review, revision, or development of a strategic plan will no doubt be the task of several organizations. Many question whether the strategic planning process actually provides any useful planning. In my experience, I believe strategic planning is a powerful tool, but it is worthless for most organizations. Why the ambivalence? Simply put, most teams do strategic planning incorrectly.

Cutting through all the fluff and dressing of what most people think strategic planning is, the truth is one key element separates all good plans from bad plans. The key element is accountability. That is not to say all plans that have accountability are good, but certainly any plan that lacks accountability is dead on arrival. Without accountability, most strategic plans read like communist propaganda, which is inspirational at inception, but never results in effective execution of goals.

An accountability plan is measurable. Think of a strategic plan like a road map, and it should clearly define where you currently are and where you hope to be. The vaguer you make it, the more you whittle away at accountability. Are you in South Dakota and want to get to North Dakota? Or, are you in Rapid City, SD and want to get to Grand Forks, ND in no less than eight hours, and by no later than Friday? Both plans are measurable, but the latter is more defined and therefore easier to measure whether it is successful.

I think many plans are not accountable, because it is convenient for people not to be held accountable for their actions. This is an unfortunate reality of the human experience, but nobody wants to be held accountable for a plan coming up short. People fear negative repercussions for failing to carry through. Management should address that people need to be held accountable, but failing isn’t necessarily going to reflect poorly on them, because there are always factors outside of everyone’s control, and sometimes plans are unrealistic. A plan that cannot be executed still helps management pin point where plans are weak and create more realistic forecasts going forward.

Most strategic plans are broken from the beginning, because they lack anything to be accountable to. Consider these two mission statements:

1)     GE under the management of Jack Welch "To be the most competitive enterprise in the world by being No. 1 or No. 2 in every market - fixing, selling, or closing every underperforming business that couldn't get there.

2)     Citigroup “Our goal for Citigroup is to be the most respected global financial services company. Like any other public company, we're obligated to deliver profits and growth to our shareholders. Of equal importance is to deliver those profits and generate growth responsibly.”

With GE, the direction the mission statement adds to the strategic plan is obvious. GE can measure whether they rank #1 or #2 in a market, and if they don’t, they will have a plan to fix, sell or close a lagging division. With Citigroup, the mission gives little direction to strategic planning. What does it mean to be the most respected company? How will they get there? What does it mean to generate growth responsibly?

A good strategic plan is accountable; and to be held accountable, performance must be measurable. A strategic plan should provide specific direction and have goals that can be measured. A plan that lacks these features is little more than propaganda that won’t effectively guide institutional growth. Most plans lack accountability and measurable goals, which is why these plans add no value to the organizations they are designed for. Strategic planning is only useful when done right, which is why few organizations find they have strategic plans that are actually useful.