What makes a bad strategic plan?

According to Harvard Business School, 92% of business plans fail due to poor execution. As a result, getting a plan to succeed is difficult.

Your strategy should clearly explain your direction, and how you will be different from your competition. Then, your execution plan should detail specifically where to commit your time and monetary resources to ensure you execute that strategy.

In this episode, Kevin and Brad discuss five things that lead to a bad strategic plan, how to avoid the pitfalls, and a methodology to develop effective strategic plans that succeed more often.

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EPISODE TRANSCRIPT

Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.

Kevin Lawrence  00:13

Hey, welcome to the growth whispers podcast where everything we talk about is about building enduring, great companies, great teams, great, enduring cultures, great, enduring organizations that take care of customers and do good things in the world. I’m Kevin Lawrence, and I’m joined as always with my co host, Brad Giles down in Perth, Australia, Brad, how you doing today?

Brad Giles  00:34

Pretty good. Thank you. Yeah, pretty good. It’s deep, dark, middle of winter right here. And how are you doing?

Kevin Lawrence  00:41

I’m in the middle of amazing summer right here on lemon. I just came from the lake, jumped in here to get the podcast and today it’s fine. I’m wearing a hat and casual. Yeah, it’s great. So hey, those of you listening, if you haven’t yet, hit that subscribe button and give us a great rating. If you think we’re doing a great job. That’s wonderful. Brad, what’s, what’s the topic that we’re doing today?

Brad Giles  01:06

Today? What makes a bad strategic plan? We’ve seen a lot of plans over the years. Quite a few. And yeah, so we thought it’d be interesting to chat about the five things that make a bad strategic plan,

Kevin Lawrence  01:20

right? Yeah. Good people making bad plans. And that’s what we’re about today. Cool. So your Word of the Day? What is your word today? I was thinking about this as I was driving up from the lake, I got one. But anyway, you go ahead.

Brad Giles  01:33

Yeah, it’s dysfunction. And so yeah, so dysfunction, particularly when it comes to teams. And we know that Pat Lencioni taught us about that. But in particular, I was thinking about dysfunction on a board. It’s a fairly common thing on some boards, and what have you. So

Kevin Lawrence  01:52

mine was family that sews beautifully into dysfunctional family. I know, it worked. For me, it was, it was the value of quality time with families where we’re just, you know, having my parents and my kids and a group, you know, we’re spending a week together at the lake. Just awesome. And having that time where you’re just hanging out, and sometimes you’re running to the store and doing some things, but just quality time away from work and you know, an oxygen mask, I talk a lot about resilience rituals. And some people, their families are a little dysfunctional and hard to spend a lot of time with. Yeah. Thankfully, most of that around me is not so just Yeah, I think family, and how it’s rejuvenating essentially, is the essence of it. So beautiful, functional family and dysfunctional family, we could do a lot of talking about that, but interesting thoughts to take into today. Cool. So as we take a look and jump right in here, today, we’re talking about bad plans. Now, you know, Brad, you and I have been working on strategic plans, whether it’s, you know, for you and your companies before you started advising or, and myself been doing it this gig for longer than I’d like to admit sometimes. But we’ve seen it all. And the reality is people, obviously we need plans, and people know that. But sometimes people get into some things, and they don’t realize why it doesn’t work very well, and why their plans actually are bad and not producing great results. Because they should. So we’re gonna dig into that today. And the distinction I want to start with is scalable, versus complex. One of my favorite sayings is simplicity scales, it’s got to be understandable to a grade seven kid to if they understand your plan, that means you’ve got it simple enough, which means you actually understand it properly yourself if you can make it that simple. And, you know, a quote I’ve shared before in a podcast by Mark Twain is, you know, I would have written you a shorter letter. But I didn’t have the time. Yeah, simplicity is hard. So if you want your plan to in your strategic plan to execute, and scale, it’s got to be simple. And yeah, it’s got to be simple. So go ahead, Brian.

Brad Giles  04:04

Yeah, so it’s funny I in the olden days, you and I used to work off paper plans. Now it’s empty. No, we tend to use computers more. But in the paper plans each we would print it out and we would work to the boxes that were on the one page plan. And so one of my favorite sayings was bubble wrap plan. In other words, if you’ve got a box in the mail and would be full of bubble wrap, which only fills up the air, well, people would be doing that in their business plans. Because they aren’t thinking deeply enough about it. And they’re just thinking I’ve got to put something in that books. What is it and it doesn’t mean anything it doesn’t

Kevin Lawrence  04:51

Oh as in just useless crap in a box. It’s just useless crap. A lot of air a lot of fluff a lot of yeah, a lot of fluff

Brad Giles  04:59

and doesn’t. So it just because you’ve got something in a box or something under any of the headlines, right? It’s just, it’s just air. It’s just bubble wrap. Yep.

Kevin Lawrence  05:11

It’ll like it, we’ll see stuff like, yeah, you know, improve our customer experience. Well, why don’t you say like, make the sunshine? Like, it’s, it’s what does that mean? And to what and how do you know and we’ll get into that stuff. So, so so scalable versus complex is a distinction. The key point is strategic planning is hard. And we like it, we do it. We’ve been doing it for decades and done 1000s of plans and planning sessions. There’s two main things of a strategic plan, there’s the strategy piece is deciding what we’re going to invest our energy in aligning our teams to those rate things that create scalable growth, give us a competitive advantage, give us profitability, give us consistency of how we can operate our business. So that’s the strategy making those big decisions, then there’s the execution once you decide to get that crap done. And getting those simple, but hard things are done very well, repeatedly. And you know, and Brad, as you shared, and I’m, you know, as we were talking earlier, some of the source article from us, I’ve heard it, but there’s an article Brad was referring and HBS, from Harvard Business School, is that 92% of business plans fail due to poor execution. And it’s interesting, because in the companies that we work with, often we just get the execution engine going. And things get a lot better. Like, we don’t need to do deep strategy upfront, in a majority of cases, because they don’t even if we did, it wouldn’t get executed. So there’s no point. So getting a strong a good strategy, but executed excellently gives great results. So yeah, cool.

Brad Giles  06:51

Yeah. What’s interesting with that is that when you get a team at the end of a quarter, and they look across the plan, and they’re, let’s say, mostly red, they’ve had a terrible quarter with execution, we go back, we reset we reanalyze. And we come up with some or many of the same things that they just need to go again. So when we don’t execute, yes, well, then it just means that we’re delaying the completion of projects, and we’re gonna have

Kevin Lawrence  07:18

any and you know that because you pick the same goals, which means thinking was right. Yeah. And people will sometimes make excuses. Well, you know, I don’t think it was right. And you’re right, you go back and do it. Again, it was interesting. We just did the company work with the Los Angeles group work with probably, I’m guessing about four years, and was down there for the day last Friday. And as we went through and their process, strategy is clear execution, they probably were executing at A, they’re an A level, right? 90% of the company goals level, and KPIs level, and each leader in the company, also at that 90 ish percent level, on average, the company’s doing great, they consistently do great. We also have strong execution on the people side and their talent reviews, and bringing on strong people. So it’s like, it’s theirs to lose clear strategy, excellent execution on of the strategy, excellent execution on the people side, and external execution on the cash and financial side, well, they got a well oiled machine, let’s just continue to grow. But that’s hard to get to that point, because there’s so much other stuff going on. So the kind of point is to kind of sum up this kind of initial thought is that, you know, in the process of strategy planning, lots of people often pick the wrong things. And they end up with complicated systems that don’t execute well. So it’s a double negative whammy. Not only are they not necessarily picking the right investments, because they’re not sure yet. But they also have a complicated system, so they don’t get execution. And either it’s, they have the people that can’t execute, or they don’t know how to keep people focused on execution. And there’s lots of different reasons. So, you know, we’re gonna dig into that a little bit more, but that’s really kind of the setup on it. And you know, I didn’t want to add before we jumped into our list here, Brian, not just

Brad Giles  09:06

that there’s a few episodes that we refer to, that might be worth listening to it. First is episode 85. Get the most from your strategic planning framework, then episode 90 annual strategic thinking meeting. And then 117 The flywheel Part One, five ways to ensure that your flywheel will build momentum so just a few episodes that you may want to refer to.

Kevin Lawrence  09:36

Yeah, and a key thing that flywheel is a critical piece of a good strategy plan strategic planning for that bigger long term thinking so bad planning what is it we see specifically? And number one is complication. And generally you know, when you have people who aren’t masters trying to do anything because they do complicate it even wrote into the lake and teaching a bunch of kids to surf. And I remember the first time Lake surfing behind the boat. Remember the first time I taught my son and his other son, his other friends are the same age. We probably try like 150 times me and the other dad. And it was a nightmare. And finally, we hired a kid, 17 years old to come teach us. He got them up in a couple minutes. We’re over the lake again this week. And you know, there’s another guy there who’s kind of connected to the family. Yeah, he always doing these in the lake with the kids. When the boards about to go he flips the boards up and supports the kid in the water. And they almost got up first or second try. Yeah, like in C, the simplest I’ve ever seen the absolute mastery. But we tried 150 times we tried every frickin thing in the work. We just didn’t try the right things because we weren’t masters. Yeah, yeah, you know, and complication. So basically, the complication is a problem. And the other rule of thumb, you know that there’s that saying kisser, keep it simple, stupid. But it needs to be keep it simple. And scalable is a nicer way to say it, as we talked about up front. And it was I said, it needs to make sense to a 12 year old kid, simple English, someone who doesn’t understand your business should understand almost everything in your strategic plan from division pieces, right through to the quarterly or monthly or weekly goals. The problem

Brad Giles  11:22

is, is that executives, many are quite smart. And the problem with this part is that smart people want to make things more complex. It’s just in their nature, they want to get into the nuances. And they tend to just by their very nature make things more complex than they need to be. I would disagree

Kevin Lawrence  11:47

with that, Brad. It’s smart people who aren’t masters. So they’re not. They might be intellectually smart, but they’re not actually street smart, or smart in this situation. Because true brilliance is simple. Right? So people who have a lot of intellect who aren’t masters in what they do tend to make things complex.

Brad Giles  12:10

Yeah, yeah. Yeah, that that is true. But if you’re walking your team, or you’re a coach walking your team through a strategic planning process, and they’re not masters at it, they’re going to intuitively try to make it more complex.

Kevin Lawrence  12:26

Yeah, I think yes. Because they’re not master. Yes. They’re not masterful, and I gotta know, what you’re saying is, is that they have a lot of intellectual capability. Yeah. And because they’re not masters, it makes it a bigger mess sometimes, where if a person wasn’t that intelligent, they would probably just have simple ideas. Yep. And because they have lesser understanding, well, these people have a lot more data a lot more understanding. And it’s very hard to boil that down into real simplicity, which is, yeah, love it. And that’s our job as facilitators, when we when our teams to do that kind of stuff, is to get it so that it is simple, which, you know, with the flywheel, for example, getting a flywheel. It’s hard to really nail the flywheel as we’ve talked about in other episodes, but and you have to do multiple sessions normally, to help get all that good smarts there. Let it simmer, come back, do it again. Let it simmer and finally probably lock it. So yes, complication me in some way. Remember this one company, wonderful people, like getting bad advice. Like you needed to be able to run four dimensional models in your brain to understand this thing. Yeah. Like it was so complex. And it was basically their strategy. The strapline was okay, let’s do everything, including the kitchen sink, the bathroom sink, the bathtub, and the old doghouse out back of the house, like everything was in the frickin thing. But they had so neatly organized and all these little quadrants and sections. But really, it takes us back into our it’ll be covered off in point number two, a little bit as well. But it was just, it was like, There’s no way they could win. It was there was no yeah, it was very complicated. So it was takes us in this point number two beautiful transition that we flipped into there is a diluted focus. Yeah. Right. Where you’re basically you got it’s about prioritization, not doing everything, it’s saying no to a lot of things. That’s why we have a rule of thumb, maximum of five on anything, maximum five core values, maximum of five thrusts, you know, ideally, by executive you’d like to have around five KPIs or individuals, you know, maximum of five goals for the company, maximum of five goals for the individual. Generally a maximum of five direct reports maybe six or seven depending on your company in an org structure. have, you know, maximum of five strengths? No, you don’t have 17 strengths give me a frickin break. Like, you know, it’s it’s lack of discipline, lack of prioritization, just dilute your focus, because it’s about it is its strategy is instead of being like a shotgun that just sprays stuff, right now might be a choke shotgun that has more focused, but ideally a rifle, where you’re focused on various very specific things.

Brad Giles  15:29

Yeah. And these things have got to interconnect, they’ve got a link with one another. There’s, there’s no point having, let’s say, if we talk about the Hedgehog, something that you could be best in the world at, that doesn’t connect with your purpose, or it doesn’t connect with your profit per x. And what I mean by that is, the different components of the plan have got to make sense. And I like to say with teams, when we get it, right, there’s almost like a clique. That you sense. Yeah, that makes sense. It connects to all Oh,

Kevin Lawrence  16:03

my gosh, it’s so simple. It’s so obvious. Why didn’t we think about that before? Yeah. Yeah. So you’re feeding into the third point here, Brad, which is about misalignment is that often the pieces don’t fit in, and you know, you’re ever doing a puzzle, and he can’t get a piece to fit, he got this one, if you kind of just give it a little bit extra elbow grease, you can kind of jam it in there. You know, and it’s kinda like, sometimes, people with their plans, they’re just jam and all the whole thing. And then they wonder why the puzzle doesn’t look anything like the picture when they’re done. Yeah, because they jam this one, and then they just jam another one, then you have to jam another one, because you haven’t done it right. Now, hey, when you’re getting started, it’s iterative. It takes quite a few quarters for our clients to get a plan where everything’s tight, don’t get us wrong. But you know, things should be aligned. Like you should have a lot your long term vision, you know, your midterm investments should be in sync in harmony with that, right, and your short term goal and medium term goals and your short term goals. And so when we map it out really is like, to be really tactical, is like your quarterly goal should link to your annual goals. And your annual should be in harmony with mostly your three to five year thrusts. And those thrusts should be connected to and deeply LED or inspired by your flywheel. And your flywheel should be connected to and aligned to your hedgehog, which includes your behavior your hedgehog, and behavior tied into a or b hag is at the center of your hedgehog. Do use Collins terms. And, and you know, when you do your 20 mile march, and all of that should be aligned to your purpose and your values like connected to the culture. It’s just they’re all linked. No, it doesn’t have to be perfect. And but it needs to be in harmony and in sync and kind of feel like it was painted with the same paintbrush.

Brad Giles  18:10

Yeah, yeah, it makes sense, logically that if we follow this path, it’s one single path, everything is on the same journey. Yeah, yeah, you got it.

Kevin Lawrence  18:23

And that is, again, that alignment of your plan and having things in harmony, it just takes work. Right. And it takes time over time. And it’s no different than when designers build a beautiful car. All the parts are kind of engine and the parts come from different suppliers, all kinds of different suppliers. But they’re engineered and designed to fit together and flow together into one seamless package. Again, that’s it. I know, we’re tight at the ultimate, but for sure these things need to be aligned.

Brad Giles  18:51

But like those, you make those improvements, like one day at a time. Yeah, you know, all of that alignment. You can’t just go away and do a two day planning workshop out of nowhere, and everything will fall into place. It, it just doesn’t happen. It takes years of continual focus to get all of the alignment and everything so that it’s operating in the way that you’re describing. Yeah,

Kevin Lawrence  19:19

like it does to become really masterful. It was interesting, um, I was thinking about this. We, there were some neighbors, some people staying with neighbors at the lake. And there’s a young family had kids, you know, kids similar ages. And so we invited them to come up with us on the boat, had a great time, got their kids up surfing, too, and had a bunch of even this one six year old kid. It was awesome. It’s super exciting watching, but the dad was really big into hockey and he runs hockey academies. He was in town for the coaching at a big hockey clinic. In the area that we’re in. I had a great chat about becoming and I have a son who’s a About up and coming and hockey, and talk about what it takes to be masterful. It’s practice and practice and practice and getting coaching and feedback and dialing it in and getting better. And all of that takes a lot of commitment, a lot of energy. And, you know, building a great company takes that. And what we’re talking about in these things, it’s discipline over time, no different than becoming a pro hockey player or, you know, a ballet dancer or artist or anything that you want to master. It’s a lot of work.

Brad Giles  20:31

Yeah, it sure is.

Kevin Lawrence  20:33

So the fourth thing that we see, so the last one was misaligned. So review QuickBooks, so we got complications, diluted focus, misaligned pieces. And then the one that really is problem Microsoft plans is big ideas, or conceptual goals, like big, fluffy goals. Like we’re going to have the we’re going to have best in class customer service.

Brad Giles  21:01

Yeah.

Kevin Lawrence  21:02

Like, what the heck does that mean? And in reality, we’re trying to get down to accountable clear execution goals, quarterly, with all kinds of details in it, but crystal clear deliverables? Yeah, imagine you’re paying a million bucks for what each of these goals, what’s in it for the company? You know, that’ll what’s in it for me?

Brad Giles  21:28

So if you just said, best in class customer service? Well, how do we measure that Navy gets a net promoter score? Okay. How do we know when we’re halfway there? How do we know when we’re a quarter of the way there or three quarters of the way there? So it’s okay to say that, but you’ve got to be able to back it up with how do we measure it? And, importantly, how do we get there? Because when you look at a plan, and it’s got all those fluffy things that you say? Yeah, it’s, it’s just, it’s just destined, maybe not destined to fail, but likely to fail?

Kevin Lawrence  22:02

Well, actually, well, well, well put away How do you even know if it fails? Because you don’t even know what the heck it is? Yes, destined to not improve performance? That’s for sure. Yeah. But failure is hard to gauge. How do you create performance? It’s like, if you had, you know, a game like whether it’s, you know, American football or rugby. Like, if there’s no lines across to get a goal. You just got a bunch of athletes running around on a field. Yeah. Where’s the line? How do you know when you get the point? And when you don’t get the point? Right. So yeah, so you got to have a very measurable what I look like outcomes, what’s the clear outcome? I also like to know is show me the money? What’s in it for what’s the economic benefit. And as you’re talking about the roadmap of how often in our sessions, when we have company goals, we get the people who will be working on that to map out all the details of the house, like the leader of it, and the support if they’re in the room. And then we have the whole room look at and say, Okay, and what are some what could be missing? What are the dependencies on other departments? You know, what else? Could it be due from learnings in the past to improve the how, you know, let’s use the collective intelligence and brainpower on that. And then finally, the accountability, like who is the person accountable? Like one person accountable? Right, there gonna be lots of people helping? Yeah, but one person’s job is to drag it across the line. And with help, but one person will lose asleep if we don’t get it across the line? At least one does, for sure.

Brad Giles  23:36

And we did a podcast on that. Racing, counting accountability versus responsibility. That was it was a good one. Yeah. A lot of people have commented on that one over time. Yeah. So you know, goals can be garbage, we’ve got to make sure that the goals are specific that we know, importantly, how we’re going to get there. Because if the business plan doesn’t explain how we’re going to execute it, then it’s just a list of dreams. That’s just it. Wouldn’t it be wonderful if we had excellent customer service? Or wouldn’t it be wonderful if we took our business from 15 million to 50 million, or whatever it might be? Yeah,

Kevin Lawrence  24:16

yep. Not rocket science. And again, all of this stuff in the world that we use is summarizing it in a one page strategic plan. One page keeps it simple. And over time, we’ve edited and tweaked them in different ways both of us have to make them super their clients. We added a lot more good Collins principles into the one that we recommend people use. The point of it is it summarize some, some are simple. So the big ideas and conceptual goals very clear, accountable goals with clear execution plans set at a minimum every quarter. And finally, finally, go ahead. Go ahead. You go ahead. You take it Yep,

Brad Giles  24:55

no problem. Finally, no individual ownership is So everything that’s going to be executed needs to have someone who is going to execute it. But the way that I like to describe it as in 90 days time, who’s going to be the person that voices to the room that this is red? Or this is green? Like someone’s going to have to do? We can all speak in concert? Who’s gonna be the person? And who’s going to be the person throughout that drives that to be executed to ultimately be green? You know, we can you’re wearing a hat at the moment, Kev, we can only wear one hat at once. Yes, yeah. So we need to be really clear on who has the ownership over that. And that could be the priorities that help to work on the business. Or it could be KPIs for that individual. But whatever it is really clear ownership as to, this is my job. And that’s your job. And I’m not here to do your job, and you’re not here to do my job.

Kevin Lawrence  25:55

Yes. And I also know, at the end of the quarter, I’m going to stand and deliver and present how I did, I am going to present my report card to the team and show how I did on all these things. So I can be accountable. So real simple stuff, right. And people, you know, simplicity is hard. But we know that bad strat planning is good people doing their best, like I don’t know. And often, sometimes they you know, it helps to have the right tools. That’s why we’re in the business, the rib, but complication, keep it really simple. And you need simple tools to help and do that we have a lot of simple tools that we use, and they’re almost insultingly simple to some people that might, you know, take pride in complicated intellectual tools. Ours are simple and they just work, diluted focus, and you’ve really just got to prioritize and think maximum of five on almost anything, but isn’t the purpose

Brad Giles  26:52

that they work? Like, the purpose of a tool is that it works.

Kevin Lawrence  26:57

Now, but most of the stuff is way too complicated to scale. That’s, that’s the problem. Yes. You know, people have insanely complicated things where I’m exaggerating, but it’s like you need to be a PhD to understand it, or you need to sit down for a half an hour to understand it. Versus it’s obvious and easily understood in 37 seconds. Yeah. So complication, deluded focus, you got to prioritize misalignment, make sure your plans are into line and over time sewed them together. So they’re in sync and in harmony, and they kind of things feel helped to fuel each other. Instead of big ideas and big bold ideas and conceptual goals, clear, accountable quarterly deliverables, and annual deliverables and three rules. And then no ownership, who is the person that owns it so they can stand and deliver? They can present the record Porcaro, how they did? They can take the applause, or feel the tension of having let people down for not delivering.

Brad Giles  27:56

Awesome, awesome good stuff. Yeah, episode. Well, I hope you’ve enjoyed today’s episode, which was five things that make a bad strategic plan. You can find us on YouTube. If you search the growth whispers if you are so inclined to look at our smiling faces. Obviously, we are also on podcasts where you’re probably listening to us. And my name is Brad you can find me at evolution partners.com That Are you or Kevin? You can find at Lawrence and koat.com. Also, we’ve both got interesting newsletters that you may enjoy that we put out each week Kevin’s and mine are separate. You’ll find it at our relative addresses. I hope you’ve enjoyed the episode. I look forward to chatting to you again next week. Have a great week.

Kevin Lawrence  28:45

Have a good one.