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The Whiteboard: Signs of a bad strategic plan – and why your firm needs a good one

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I think it is important for every business to have a good strategic plan. The emphasis is on the word “good.”

There is not much sense in having a bad plan, because a bad plan won't produce the expected results no matter how well it is executed. Nevertheless, there are many bad plans out there.

Here are a few of the signs of a bad plan that I look for when working with clients.

'Where is that thing?'

This actually happened. After an executive assured me his company had a great strategic plan, I asked if I could see it. Apparently he didn't expect that, because the question triggered a lengthy search. He finally pulled a binder he obviously never looked at out of a filing cabinet. When you don't care enough about your plan to keep it handy, it's probably a bad plan.

A lack of valid customer and market intelligence. The plan starts right in with vision and mission and goals. There is no substantive analysis of the marketplace. What do our customers want? What do they think of us and our competitors? How are their needs and desires changing? How should this affect our strategy? Frequently, these questions are not asked.

Some plans do include extensive discussion about customer preferences and trends. There is just one problem — the information comes from someone in sales or marketing who is the "expert" in what customers think. This is often myopic hogwash, lacking any relevance to what might happen in the next few years. When our market research amounts to pretending we can think like customers, that is a sign of a bad plan.

Laundry lists of strengths and opportunities

Lists of strengths, weaknesses, opportunities and threats (SWOT) are meant to be meaningful inputs to the plan. Long lists of strengths are often nothing more than exercises in chest-puffing. Every department manager wants his or her area to be listed in strengths.

A real strength is something relevant to customers where we are noticeably better than the competition. Defined this way, most businesses are lucky to have a handful. Similarly, there should not be a laundry list of opportunities. These, too, should be vetted for being realistic and relevant.

Real opportunities that align with real strengths should be the heart of growth strategy, while real threats that align with real weaknesses point the way for strategies to reduce risk.

Slam-dunk goals

If the goal of the business is to grow at approximately the same rate as gross domestic product or to maintain a status quo market position, management may as well save the time and effort of creating a strategic plan. Of course, owners should consider whether it is worth paying a management team to propose goals like that.

Lofty goals with skimpy strategy. Some executives confuse goals with strategy. They think that declaring highly challenging "stretch" goals will magically make the results happen if only everyone will get aligned.

I believe in stretch goals, but that is what they are: goals, not strategy. The purpose of stretch goals is to encourage deeper thinking, more brainstorming and more innovation. Let's face it, the thinking required to grow at the rate of GDP growth is not the same thinking required to grow by 25 percent over a period of three years. Strategy isn't the "where," it is the "how." How are we going to grow that fast?

When I ask an executive about his or her strategy and get a list of big goals, I sense a bad plan.

Incoherent lists of initiatives

I see this frequently. A business has a set of aggressive but reasonable goals, usually something about growth and profitability. Then there is a list of strategies and tactics to achieve the goals. But the strategies and tactics listed are not part of a coherent, overarching strategic approach. They are incoherent and unconnected. Southwest Airlines provides a great example of what I mean by coherent strategy.

Southwest has a set of coherent strategies and tactics which allow it to grow and profit as a low-price, no-frills alternative to the major carriers. It has no hub structure. It favors secondary airports with cheaper gate rentals. It uses the same make and model of airplane everywhere to reduce pilot training and maintenance costs. It flies point-to-point, minimizing baggage handling. It sells tickets only through its own website, not sharing revenues with third parties.

Every strategy and tactic is part of the coherent whole. That is why major carriers flop when they try to compete with Southwest on price. They don't have the coherent strategies to support the low price.

Check your plan, assuming you can find it, against this list. How good — or bad — is it?

Richard Randall is founder and president of management-consulting firm New Level Advisors in Springettsbury Township, York County. Email him at

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