It’s a familiar exercise. The CEO assembles a team and repairs to an off-site meeting with cell phones, whiteboards, and iPads to produce multi-colored charts depicting visions, missions and goals, both qualitative and quantitative. The result? The annual strategic plan.
Familiar, yes. But productive? Not always. As likely as not, the annual strategic plan that starts strong out of the gate loses relevance as the first quarter fades into the second, the third, and finally ends where the process began—assembling a plan for the next year.
Why are so many annual plans shoved aside when day-to-day issues intervene? For some companies the strategic plan is an annual exercise in wishful thinking, with goals that are unrealistic or too complex to achieve. For other companies, the goals are achievable but are poorly defined or not actionable. Then there are the plans that require a new technology, a revamped workforce, or a new partnership that fails to materialize.
Any one of these things can derail a well-intentioned plan—and since many of them are predictable, they can be prevented with a bit of foresight. Here are five things that smart executives can do to align strategy with capabilities for success:
An annual strategy session should not be the sole impetus for wholesale organizational change. But if every year you develop a plan that’s never actually followed because it is too complex or your organization is not able to carry it out, then taking a hard look at your capabilities and making changes is essential.
These are unsettled times, and annual strategic plans must consider the risk of disruptive technologies, shifting customer expectations, and political and financial turmoil. But the assessment and anticipation of such risks needs to rest on the foundation of an annual plan that is simple, well marketed internally, and grounded in the reality of your organization’s capabilities. Following the checklist can help ensure that your next annual retreat is meaningful and not just another exercise.
Johnson Controls CEO Oliver has led a corporate transformation focused on making buildings greener.
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