why planning fails in middle sized enterprises

Why Planning Fails in Middle-sized Enterprises by Walter Adamson

Most strategic plans fail to deliver their goals because there is insufficient attention bythe leadership team on the management of strategic change.

For most middle-sized enterprises the risk is high because:

· they develop a strategic plan in response to a threat, a "reinvention strategy;"and,

· they do not have deliberate, effective change management processes in place.

CEOs can greatly increase the chance of success of strategic change initiatives, eventhose induced by anxiety or shock, by appointing a Change Leadership Teams, and atthe same time by paying serious attention to using vision, mission and values statementsas implementation tools.

Keywords: SME; middle-sized enterprise; strategic change leadership; values.

Walter AdamsonFounder and Principal

Digital Investor Pty Ltdwww.digitalinvestor.com.au

[email protected]+61 403 345 632

As published in Strategic DirectionVolume 20 Number 10 2004 pp2-4

Strategic Direction is a publication ofEmerald Group Publishing Ltd

Its mission is to provide chief executiveswith concise, action-oriented applications

of current experience and thinking on business strategy.

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Most plans fail

Most strategic plans fail to deliver their goals because there is insufficient attention bythe leadership team on the management of strategic change.For most middle-sizedenterprises the risk is high because:

· they develop a strategic plan in response to a threat, a "reinvention strategy;"and,

· they do not have deliberate, effective change management processes in place.

My rule for the best possible chance of success is for the CEO to establish a StrategicChange Leadership Team to guide the implementation of the strategic plan.

The role of the Strategic Change Leadership Team

The Strategic Change Leadership Team needs to be focused on the implementation ofeach element of the Strategic Plan. It is responsible for appointing sub-groups to carryout specific tasks and assignments.

The Team reports to the CEO or the Board and must hold itself responsible for settingthe program and meeting the implementation targets. In this way it becomes the creatorand overseer of the "program office" for the implementation of the strategic plan.

Part of the Team's early role is to not only set out the program as a set of projects butalso to seek to clearly link the implementation activities to business benefits.

These benefits should be apparent from the Strategic Plan - but this doesn’t mean thatmapping the benefits to particular projects is easy. Nonetheless, this mapping work isan important initial job for the Strategic Change Leadership Team.

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It is also highly desirable that the Team plan a series of pilot and mini-projects whichare aimed at delivering the business benefits of the change program.

By seeing through these mini-projects the risks and unknowns of the larger project willcome to be better understood. Then, the plan can be adjusted against those outcomes ina cycle of continuous improvement and pro-active risk management.

First actions for the CEO

The CEO should appoint the Strategic Change Leadership Team. They should assign theTeam to directly manage the most critical actions from the Strategic Plan, or as analternative have task-groups appointed to overview specific tasks.

All the Team members do not have to permanent; they might come and go according tothe type of change being led. For example, changes to a specific business unit or marketmay require a particular specialist, changes to channels may require another and changesto recruitment strategies another - perhaps including outside experts.

A key requirement for success is that the Team has to have senior leadership heavilycommitted to it and to the implementation of the strategic plan.

One excellent way to demonstrate this commitment is by appointing a senior executiveto lead each sub-team e.g. a strategic reinvention sub-team for a particular market orgeography.

Vision, mission, and values statements as implementation tools

To further reduce the risk of failure during the implementation of change CEOs shouldconsider more seriously the role of vision, mission and values statements.

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Successful entrepreneurs running middle-sized companies very often question thepractical value of vision/mission/value statements.

On the other hand many other entrepreneurs build their companies around strong valuesand vision, and they clearly create shareholder wealth from that fabric. Therefore thedoubts of one set of entrepreneurs contrasts with the behaviours of the otherentrepreneurs who act out their values and vision.

What is apparent is this: where there are shared values which are integrated into theorganisation, whether explicit or implicit, then powerful outcomes can be achieved.

In times of change, and when implementing change, there is a need for CEOs to beexplicit, to write down and discuss what before may have been implicit.

How is this to be done? Producing statements of values, mission and vision is abeginning, but some would say the easy part. The action and wealth creation comesfrom their implementation.

Beware offering false hope

Paradoxically, the production of a "values statement" with no further implementationprogram can lead to skepticism and diminution of organizational capability.

What this means is that as a CEO you are better not to embark on this journey if you donot intend to follow it through to conclusion. Producing a values statement but notliving it or "walking the talk" will lead to a negative impact on strategic change.

If you and your leadership team do not give attention to deployment, to living thevalues, to benchmarking and improvement, then in times of change your staff willrapidly dismiss the statement of values as a meaningless gesture, perhaps "another fad".

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However, when created and deployed in the right way vision, mission and valuesstatements can be leveraged, and by doing so, in my opinion, CEOs will:

1. significantly help shape and focus their organization; and,

2. create a perceived natural worth around the statements; and,

3. ultimately deliver extra shareholder and employee value.

Actions to leverage values statements

· use the vision/mission/values statements as a template for all items and actionsthat come before you, and the Leadership Team, for decision;

· Most importantly use them in discussions of issues and decisions with leaders atall levels and with all staff. Let them be used in daily life!

· Encourage, or at least don't be defensive, if people challenge the words andmeaning. Help them understand the meaning through discussion. The real valueis in the discussion not in the words on paper. It is important to maintain theobjectives without too much change but be open to changing the words if ithelps ease confusion. In fact I would go as far as to say to encourage your peopleto challenge the statements - because in that way they will become committed byseeing you and your leaders being involved and passionate about their meaning.Forsake the ritual for meaning;

· Encourage and demonstrate the use of the statements as a guide in meetings withall divisions and business units of your organisation. Judge and decide on actionsby reference to the statements and in particular where difficult and strategicchoices have to be made;

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· Have those reporting to you formally report on how they are developing andimplementing strategies based on the statements - on a regular basis;

· Benchmark each and every value, and put improvement programs in place totake the values forward and to integrate behaviours across the organisation. Thebenchmark results and the design of interventions must be a regular agenda itemof each leadership team meeting;

· Assess individual and collective behaviors regularly to ensure that they are inline with the espoused values (including your own behavior).

Are we meeting our values today?

Lastly, when walking the floor ask people not: “Are we making money today,” but:“Are we meeting our values today?” (“And by the way can you please tell me if I andthe leadership team are meeting your understanding of our values?”)

Conclusion

CEOs can greatly increase the chance of success of strategic change initiatives, eventhose induced by anxiety or shock, by appointing a Change Leadership Teams, and atthe same time by paying serious attention to using vision, mission and values statementsas implementation tools.

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why planning fails in middle sized enterprises

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