For CEOs, crafting a successful strategic plan requires careful planning and consideration of various factors. From identifying the right objectives to researching potential opportunities, there are many challenges that must be addressed to create an effective strategy. In this post, we will explore some of the key challenges associated with creating a strategic plan and offer tips for overcoming these obstacles.
5 Key Challenges When Creating a Strategic Plan
Setting a realistic mission: According to an article in the Harvard Business Review, one of the biggest challenges of creating a strategic plan is developing a clear and compelling vision that inspires and motivates all stakeholders (Kaplan and Mikes, 2012). In addition, a CEO must be able to balance the need for short-term results with the long-term goals of the company, as well as adapt the strategic plan as market conditions and business priorities change. TIP: Use values that speak to authentic company and team messaging. Understand the industry and its competitive landscape so that a strategy can be tailored, communicated, and measured to the company’s specific goals and strengths.
Developing actionable strategies: A strategic plan must include actionable strategies that can be implemented to achieve the company's goals and objectives. Developing these strategies can be challenging, particularly when multiple stakeholders are involved in the process. TIP: Collaborate with stakeholders through a facilitated method of strategic planning to identify goals and metrics that are suitable for the desired outcomes. Consider the resources available in the organization and any roadblocks. Prioritize and plan for their implementation by creating timelines and assigning responsibility for executing each strategy.
Gathering and analyzing data: To create an effective strategic plan, a company must gather and analyze data from a variety of sources, including market research, customer feedback, and internal performance metrics. This can be a time-consuming and resource-intensive process. TIP: Establish processes that ensure the necessary data is collected to fit the desired goals and metrics while efficiently leveraging technology or engaging with outside firms to provide additional support. Focus on current and desired success while working to uncover meaningful insights that can inform the business strategy.
Communicating the plan: Communicating the strategic plan to all stakeholders, including employees, customers, investors, and partners, can be a complex task that requires effective communication skills and a clear understanding of the company's messaging. TIP: Create a framework that outlines who needs to be informed, when and how they should be informed along with a timeline including consistent dashboards, metrics, and communication/meeting cadence. Make sure that all stakeholders are aware of the plan, understand its objectives, and how it will be implemented.
Ensuring alignment and incentives: Ensuring that all stakeholders are aligned with the strategic plan and committed to its implementation can be challenging, particularly when there are competing priorities or differing opinions. As Jeff Immelt, former CEO of General Electric, said in an interview with McKinsey & Company in 2017, "The hardest thing is the alignment of people and the amount of people you have to align around the strategy, because ultimately, it’s a decision that requires a lot of input and has to be implemented by many people." (McKinsey & Company, 2017). TIP: Make certain everyone understands the strategy, its goals, their role, and their incentive structure for meeting/exceeding goals. Communicate the plan with stakeholders including how and when they receive updates and how they can provide feedback. Recognize performance that contributes to the overall success of the strategy using a combination of company and individual success.
Additionally, ensure that the plan is flexible enough to adapt to changing market conditions and business priorities. As Indra Nooyi, former CEO of PepsiCo, said in an interview with Harvard Business Review in 2018, "You need a strategic plan, but you also need to be agile enough to make adjustments along the way." (Harvard Business Review, 2018). As Reed Hastings, CEO of Netflix, said in an interview with McKinsey & Company in 2017, "Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different. The company that claims to stand for everything really stands for nothing." (McKinsey & Company, 2017).
Developing a strategic plan is an important task for any business. Although it can be challenging to create and implement a successful strategy, with the right approach and careful consideration of all stakeholders, you can create a plan that will help your business succeed in the long run. If you're looking for help crafting a strategic plan for your company, contact us today to learn more about how we can support you in this process. Together, we can create a plan that aligns with your vision and mission and sets your business on the path to success.
Free PDF download: 5 Key Challenges and Tips for Creating a Strategic Plan
References:
McKinsey & Company. (2017). A CEO's guide to crafting a compelling strategy. Retrieved from https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/a-ceos-guide-to-crafting-a-compelling-strategy
Harvard Business Review. (2018). Indra Nooyi on creating a sustainable business model. Retrieved from https://hbr.org/podcast/2018/06/indra-nooyi-on-creating-a-sustainable-business-model
Kaplan, R. S., & Mikes, A. (2012). Developing a strategic vision for your career. Harvard Business Review, 90(6), 105-111.
Nadella, S. (2019). Hit Refresh: The Quest to Rediscover Microsoft's Soul and Imagine a Better Future for Everyone. Harper Business.
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