Implementing the Strategic Plan -- 3 Executive Coaches Share Business Secrets

Implementing the Strategic Plan - Vistage executive coaches share secrets

Implementation is the most difficult part of the strategic planning process. It's achieving the objectives set out in the plan while remaining alert and flexible to new opportunities as they unfold.

To be effective, a business must integrate the results of the planning process with other systems, such as budgeting, compensation and information systems. This may mean discarding some formerly accepted business practices in favor of new processes. The overall goal is integrating the results of strategic planning with daily, weekly and monthly routines.

Vistage expert resource speaker Stephen Haines, President of Centre for Strategic Management, offers these "change structures" to aid in implementing the strategic plan:

The CEO. A visible CEO is the single most important factor needed to spur change in an organization. The CEO should develop a "stump speech" around the strategic plan -- promoting its values, mission statement, actions, etc. -- and then spread the word wherever possible.

Day-to-day coordination. Enlist a support person to coordinate the basic change programs.

Executive team. This management team keeps a close eye on the top three priorities under each strategy in the plan. The CEO should receive direct reports from the team on a regular basis.

Strategy sponsorship teams. Organize top and middle managers into strategy teams (a team for each strategy). These people form cross-functional teams that become change agents for each strategy.

The goals articulated in the strategic plan should drive marketing and sales efforts, human resources practices and research and development. These goals become a central part of the business by guiding daily operational activities.

Avoid common strategic planning implementation mistakes.

Strategic planning entails risks. The process may expose underlying conflicts within the organization. It may disrupt the flow of information, the ways decisions are made, even established relationships between "power players." The point is not to allow current operating problems to dictate or deter long-range planning.

When strategic plans fail, top management is often to blame. The reasons?

Lack of communication -- The plan doesn't get communicated to employees who keep on working in the dark.
Mired in the day-to-day -- Managers consumed by daily operating problems lose sight of long-term goals.
Out of the ordinary -- The plan is treated as something separate and removed from the management process.
Just say no -- Management ends up discarding the plan, choosing instead to make intuitive decisions that clash with accepted objectives. The result is confusion among employees throughout the ranks.

Haines lists other common mistakes when implementing strategies:

A scatter-shot approach to planning and strategic change
Failure to integrate planning at all levels
Developing vision, mission and value statements as fluff
Having yearly weekend retreats only
Failing to complete an effective implementation process
Violating the "people-support-what-they-help-create" premise
Conducting business as usual after strategic planning
Failing to make the tough choices
Lacking a scoreboard: measuring what's easy, not what's important
Neglecting to benchmark yourself against the competition
Seeing the planning document as an end in itself
Having confusing terminology and language

Reach out to stakeholders.

Above all else, the business must communicate strategy clearly and regularly to employees. When the CEO and top management demonstrate the link between strategy and specific business decisions, front-line staff are encouraged to think strategically as well.

Vistage expert resource speaker and former Vistage executive coach Ole Carlson suggests a "fireside chat" between planning team members and employees. "Take the written document back to the people you influence and discuss it with them in a conversational manner. Set up a feedback mechanism -- suggestion box, one-on-one meeting, monthly updates -- so they have a chance to respond as well."

This process facilitates employee "buy-in" and a broader understanding of the organization's goals and objectives. "Change is like an iceberg," Haines says. "About two-thirds of an iceberg is underwater. In small to mid-sized business, everyone focuses on the content of the change. The problem isn't just identifying what needs to be done differently. While you are thinking about the content, there is something else going on called the process of change."

He adds: "If you don't get people to buy in on the process of how the change is managed, it will fail. This process is going on beneath the waves of the iceberg. The question is whether you make the process work for or against you."

Our Vistage experts suggest carrying this a step further: share the strategic plan with other stakeholders like investors, customers, alliance partners, etc. An "open book" approach will likely generate more helpful ideas and suggestions about the future of your business.

Measure progress in the plan.

"Progress in a plan can be measured through such key indicators as revenue, gross sales and the number of new customers," Carlson says. "The planning team must decide what measurements are most applicable to long-term objectives."

"If you can't measure it, you can't manage it," John Johnson, former Vistage executive coach, long-time Vistage expert resource speaker, and author of The 60-Minute Strategic Plan, says. He uses a fictitious business called "The Good Egg Company" to illustrate his approach to strategic planning. For the Good Egg Co., this includes measuring:

Number of new customers
Total new product dollar sales
Percentage margin
Return on assets
Return on equity
Return on investment
Market share
Employee morale
Customer satisfaction

Monitor the strategic plan.

Finally, to keep a plan alive, it must be monitored. Here are some guidelines:

Regular updates. Progress reviews should be scheduled on a monthly or quarterly basis, depending on the level of activity and time frame of the plan. This can encompass corporate, regional and departmental strategies. Specific tasks should be part of relevant management meetings.
Challenge underlying assumptions. While monitoring the plan's ongoing progress, also continue to examine its underlying assumptions, the continued validity of its objectives and the influence of unanticipated events.
Create a "champion" for every strategy and action. Says Johnson: "The champion has to be someone other than the CEO, because he or she isn't accountable to anyone. The champion doesn't necessarily have to complete the actions, but must see that they get done."
Stay committed. Every action must have a due date. The CEO can let the due date slip, but don't let it go away. "This tells the champion that you aren't giving up on the strategy," Johnson says. "When you keep following up, the champion will see that you're serious about the strategy and getting it done."
Conduct short-term reviews. Carlson suggests scheduling team "huddles" every 90 days to keep the plan "reviewed, reloaded and re-energized." (Haines prefers 60-day reviews by senior management.) These reviews offer the opportunity to take another look at the original plan, determine if objectives are being met and implement new action steps as necessary. Another benefit: during these huddles, the CEO can identify those individuals who are getting things done and those who aren't (the "empty suits").
Expand skills. In the weeks and months following the planning process, expand employee skills through training, recruitment or acquisition to include new competencies required by the strategic plan.
Target sales. Sales and marketing tools form the link between business strategy and sales strategy. Designed correctly, these sales tools communicate an organization's value and message to the marketplace, and generate positive feedback from customers and clients.
Make milestones. Go beyond monitoring; build milestones into the plan that must be achieved within a specific time-frame.
Reward success. Johnson calls it the "pucker factor" -- any incentives that greatly increase employee motivation. These can range from a week off with pay to videos of the best movie Oscar winners of the past 25 years. "Apply some positive and/or negative consequences for achieving or not achieving the organization's stated strategy. These consequences may be great or small, as long as they lift the strategy above the daily morass so people make it a priority. Find creative ways to motivate people and reward them for focusing on the strategy and vision."

Haines offers a "Strategic Change Process Checklist," including:

Finalize a strategic plan or major change with a rollout plan.
Align the budget to annual priorities and fund the change.
Build all department/division/unit annual plans around the organization-wide annual priorities/goals.
Set up a bimonthly/quarterly strategic change leadership steering committee to manage the change process.
Establish key success measures and a tracking system.
Revise the performance management and rewards systems.
Examine your organizational structure as well as staff/succession planning to support the desired vision.
Set up staff development to build your own internal cadre of expertise with skills to achieve your vision and core values.
Build a game plan to ensure a critical mass for change.
Set sponsorship teams in place for each core strategy.
Set up annual strategic review dates, including new assessments and a large group annual plan review meeting.

After considerable work and effort, a strategic plan is in place. Is the job done? Not at all, according to our Vistage business experts.

"Over the life of a strategic plan, a company's vision may stay the same, but its strategies will probably need to be revised," Haines says. "Some businesses can maintain a strategic plan for a year or longer, while others have to respond to market changes in less time. Usually, this means refining specific strategies and goals to meet changing circumstances each year."

According to Carlson, a strategic plan should be "proactively reactive." Move ahead with the plan as designed, but be prepared to let go and switch strategies as necessary, Carlson says. "When the horse is dead, you have to get off." In today's fast-paced business environment, who has the luxury to stop and figure things out in their leisure time?

No one strategic planning model is right for all organizations or circumstances. Planning teams can choose from a variety of models with an even wider range of approaches. But our Vistage business experts agree: a business that develops and executes a strategic plan gains significantly from the experience. A business that starts with a working model and achieves a tangible plan will be more successful than a business with no plan at all.