As consulting CFOs who have led and participated in countless strategic planning sessions over the years, we have experienced first-hand the value that effective strategic planning brings to business. Strategic planning is a vital activity that helps an organization assess the state of its business, market, and resources. It determines priorities, identifies operational gaps, and creates alignment around the key processes that move an organization forward. All these factors are critical to business growth.
Strategic planning establishes markers that will indicate the organization’s progress in getting where it wants to go. Further, it requires a great deal of collaboration and focus to ensure that the right people are involved and that the right information is being used to inform thinking and decisions. Avoiding the seven key mistakes listed below will help your organization get the most out of the strategic planning process.
1. Using an internal facilitator who does not know how to lead a planning session.
To mitigate internal bias and promote objectivity, it often makes sense to bring in a qualified outside consultant to guide the strategic planning sessions. Facilitating is a learned skill that an otherwise talented CEO or management team may not have. Additionally, outside consultants have an external point of view that fosters constructive and candid dialogue from those participating in the process.
2. Setting unclear objectives.
Without clearly stated objectives and a well-defined structure for proceeding, strategic planning sessions wander off-course and can leave participants frustrated and not fully engaged. When everyone understands from the beginning what is expected of them and what the intended outcomes of your strategic planning sessions are, the likelihood of staying engaged and on task to accomplish those objectives is much higher.
3. Failing to establish and maintain an atmosphere of trust and openness.
It is important to openly brainstorm as a group and to have thoughts and ideas contributed by everyone involved in your strategic planning sessions. This only happens when an atmosphere of trust and non-judgment is in place. Sometimes the most left-field idea can generate great change. In environments where people do not feel comfortable or valued for speaking their minds, ideas and inputs that could bring organizational breakthroughs will never be heard.
4. Getting too granular.
The primary purpose of strategic planning sessions is to set major, overarching organizational goals and determine the right strategy for reaching them. Digging into tactics at this point dilutes the strategic impact these sessions should have and can end up driving the process into the weeds. This increases the risk of having too many action items that are never fully completed, rather than narrowing the focus to the strategic few that will be pivotal to success.
5. Not addressing misconceptions about the word “strategy.”
People often don’t have a common reference about what “strategy” is, as it can mean different things to different people. Vision is what you want to be and where you want to go. Strategy encompasses the big steps you take to get there. It’s important at the outset of your strategic planning sessions to ensure that everyone is on the same page.
6. Not following up on ideas that surfaced in your sessions.
Holding a strategic session or series of sessions is hard and important work that, for one, means pulling in leaders from their busy schedules. It’s critical to act on and implement the action items that emerge from the work. Still, the most common failure of strategic planning sessions is a lack of execution. Assign action items to individuals and set up a mechanism for follow-up and accountability. These mechanisms often take the form of quarterly updates, interim progress reports, and individual follow-ups.
7. Not having the right participants or key functions represented.
There are generally two perspectives on this point – one that believes strategic planning sessions should be a small group, because it’s easier to get things done, and another which holds that a larger group has a greater chance of generating more good ideas and making buy-in easier. As the group gets bigger, the facilitator’s role becomes commensurately more important. No matter your perspective, it is important to include people from different disciplines, including sales, finance, operations, marketing, and other groups to optimize input.
While getting all key players in the same room for a strategic planning session can feel like a big accomplishment in itself, the success of this work rests on the ability to harness participants’ skill sets, ideas and unique perspectives to collectively achieve the stated objectives. It’s tough to overstate the importance of these sessions, as they will greatly impact your organization’s trajectory. For that reason, it’s essential to incorporate the proper framework, facilitation, and attendees into the process. Avoiding the seven common mistakes outlined here will put you and your team on a path for success.
Originally published January 21, 2018. Updated and republished October, 24, 2019.
Carter Freeman is the Managing Director and Consulting CFO for the Denver office. You can reach him at firstname.lastname@example.org.
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