"It is impossible for ideas to
compete in the marketplace if no forum for
their presentation is provided or available."
Thomas Mann, 1896
The Business Forum
of Planning: Why Most Plans Fail
Thomas R. Northup
Strategic planning is the most
important activity a CEO, a Division Manager and even a department
manager can undertake. Effective planning focuses the team. Focus drives
performance and performance drives results. Effective planning will
produce consistent results. Profitability and revenue will increase year
study of small to medium sized companies, Figure 1, demonstrates the
importance of planning. Companies with equal capabilities with and without
planning had vastly different results.
The message is that strategic planning
will produce competitive advantage in your marketplace.
Large companies have departments
devoted to strategic analysis and planning. Business units in large
companies find it necessary to plan their activities to coordinate with the
Small to medium sized companies do not
understand the value of planning and do not plan. Typically the CEO of a
smaller company admits, "We are too busy with day-to-day issues and do not
have the time for planning."
business environment has changed significantly during the last decade.
Rapidly changing technology, quick information transfer and global
competition have shortened the business cycle. Faced with these changes,
Leaders find it difficult to drive their companies to deliver sustainable
result, companies have far less time to react to changing conditions and
place themselves at a tremendous disadvantage when they focus only on the
Effective Planning Model
The Leader must balance day-to-day
issues and long term vision, which are not mutually exclusive. While
daily productivity and short term results are important, effective
planning allows the organization to proactively react to longer term
market changes. The leader must give both short and long term issues the
proper emphasis for the organization to truly prosper.
The most successful organizations focus
on a planning model that integrates both short and long term needs, creating
an effective planning process that produces consistent sustainable results
The model in Figure 2 shows all three
areas: the strategic plan, the operational plan and results management,
integrated into a framework that drives results towards the long term vision
of the organization. This model integrates both processes: finding where the
company wants to go and how it will get there.
In this model, the management team
develops the plan. When the team takes responsibility for thinking through
and completing the analysis, it owns the plan. Successful CEOs understand
that they must personally commit to this success and drive the process.
Vision, Mission &
Key Results Areas
Integrated Planning Process Ó 2003 The Executive Guide to Strategic
Planning, by Patrick J. Below, George L. Morrisey, Betty L. Acomb (Jossey
The integrated process starts with
strategic planning, which usually focuses three to five years into the
future and evaluates what business the organization is in and how to
position itself to get there. A detailed analysis of the past provides a
starting point for decisions about the future. The plan covers both external
and internal aspects, determining the key success factors in each market
segment and within the organization. Management evaluates performance
against these benchmarks and determines the gap between where the company is
now and where it wants to be. The key is to identify how to turn these
success factors into core competencies.
Operational planning identifies the
results that implementation of the strategic plan will produce during that
year. An operational plan works best when it crosses functional areas,
requiring the input and coordination of several departments. This breaks
down departmental silos and develops stronger organizational teamwork.
While senior management usually does
strategic planning, operational planning should include lower levels of the
organization. Focusing on the issues throughout the organization ensures
wide commitment from key people.
Plans often fall behind in execution.
Continuous effort is crucial to results management. Every day short term
priorities take management time and delay results. Management must use
focused discipline to regularly monitor and control progress.
The effective leader understands the
importance of active involvement by everyone in the planning process. His
personal high payoff activity is to challenge his team to think more
strategically every day.
We all plan to some degree already.
However, you should assess your current planning process and compare it
to the integrated planning model. Use these questions as thought
starters and idea generators.
planning processes, what worked well? What should you have built upon
and continued? What did not work well and should be improved?
of your organization's performance in the past fiscal year, what are the
biggest lessons you learned that can improve performance during the next
you consider to be the two or three most important organizational
priorities for the next fiscal year?
view, how can the organization do a better job of understanding and
meeting the needs of your various markets?
you improve growth during the next one to three years using a more
robust planning process?
To determine your planning gap,
evaluate the effectiveness of your current practice compared to the best
practice as defined in the integrated planning model. If your gap is large,
you should explore how to better utilize planning to focus you and your
The integrated planning process
defines best practice in strategic planning. Many plans fail to some
degree because the three areas are not integrated into a coordinated
process. Plans often fail to fulfill their potential in each of the
three categories because:
No true strategic analysis and
thinking is conducted.
Annual budgeting is considered
planning. Budgeting is not even a comprehensive operational plan.
There is no regular effective
results management process.
The plan does not have management
buy-in because it is compiled and written by outsiders.
Planning that has active management
participation in all its phases is the most important activity a leader and
his team can undertake. Organizations that follow the integrated planning
process raise their effectiveness to a level that cannot be reached by any
other means. The focus they develop generates competitive advantage in their
Integrated planning requires the
effective manager to share power with his management team. In this way he
builds personal motivation among the management team by allowing them to
contribute to creating the direction of the organization. The benefit is a
very strong team working with mutual trust and shared accountability.
The combined best thinking of the team
rises to a very high level as the planning process draws on the wealth of
knowledge that employees, with differing professional interests, experiences
and perspectives, bring to their jobs.
The magic of effective planning is the
development of a proactive, highly successful organization where
profitability and revenue increase year after year.
If you would like to explore
strategic transformation, I would be happy to meet with you to discuss the
state of your business.
I will ask you to complete
three assessments that evaluate your organization strategically, in
leadership and personal productivity. This is your commitment to a focused
high quality interchange.
There is no obligation. We
will meet as long as necessary to have an in depth review. My objective is
to first build our relationship. If we agree to continue working together,
great, if not then my hope is that our discussion will lead you to
Thomas R. Northup is a Fellow of The Business
Forum Institute and is a nationally recognized management expert,
consultant, speaker and coach. He is the author of the book, The Five
Hidden Mistakes CEOs Make. How to Unlock the Secrets and Drive Growth
and Profitability. Marshall Goldsmith, author of the New York
Times best-seller, What Got You Here Won’t Get You There, said about Five Mistakes “Gleaned from years of success as a CEO in his
own right, Tom Northup masterfully provides practical wisdom and tools
to move senior leaders beyond the status quo to help them see what
they need to see, not just what they want to see.” Tom is the
former CEO and principal of three successful businesses, and he
understands the business complexities faced by today’s busy executives.
He is experienced in high growth situations, new product start-ups,
strategic planning, market analysis, team operations, and
turn-around/reorganization. Today, through coaching, consulting,
mentoring, and training, Tom provides practical experience and
thoughtful leadership. Tom works side-by-side with clients to develop
plans and implement strategies to …. build capabilities that increase
revenue and profitability year after year, make companies more proactive
in the marketplace, build effective management teams, foster greater
corporate wide accountability and generate sustained results. He is a
goal-oriented executive experienced in developing strong management
teams all with a focus on driving continuous results and success.
Tom graduated with a BS in Mathematics from Bucknell University and has
an MBA from Syracuse University. He is an active with the Forum for
Corporate Directors, the Institute of Management Consultants and runs a
CEO roundtable at the Irvine Chamber of Commerce. In addition to his
book he has written many articles on management that have been published throughout the
Visit the Authors Web Site
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