Who Needs a Strategic Plan?

Without a strategy there is no formal structure for communication and important information will get lost. Without clear and consistent communications, each employee focuses on what they perceive to be important, which may or may not be important to the organization.

Not Everyone Understands the Company's Purpose

The business owner or C-Suite executives may assume that everyone understands the organization’s purpose because they feel as though they have discussed it many times. However, the purpose needs to be clearly written so everyone can understand. Everyone must understand “the why” for the organization.

There is No Plan to Adjust Course

Markets evolve, i.e., the economy changes, technological advances, there is a global pandemic. Without a strategic plan, the organization does not have direction as to how pivot or adjust course. Without a plan, an organization tends to react swiftly or freeze, thereby not allowing the organization to pivot in such a manner that aligns with their mission.

Real World Examples of Poor Strategic Planning

Let’s evaluate real-world examples of companies that failed to enact a strong strategic plan.

Kmart

How was Kmart’s strategy so poor that it led to failure? Let’s examine the three vision statements of the top three discount retailers.

Target: “Offer cheap-chic clothing styles”

Walmart: “Always set the lowest prices”

Kmart: “To thrive as a mass merchandising company that offers customers quality products through a portfolio of exclusive brands and labels.”

Do you see the issue? Kmart’s vision is broad and uninspiring. Vague moves no people. Employees don’t understand what is expected of them, and the customers don’t understand why they should come to Kmart as opposed to Target or Walmart. (USP anyone?)

One of the most important reasons to create a strategic plan is to define your organization’s identity. Kmart did not have clear identity, so how could they compete with Target and Walmart?

McDonald's

(Yes. McDonald’s. They have made mistakes, too.)

In 2005, McDonalds felt the pressure to offer some healthier options. Remember the range of healthy salads that got introduced? McDonalds believed that they could capitalize on the rising trend of eating healthy. However, the salads didn’t sell well. Do you know why? McDonalds did not focus on its core competencies, which the burgers and fries loved by their customers. The other issue was that it started to solve one problem, the public perception that McDonalds offers unhealth food causing obesity, but then they focused on trying to increase revenue by selling salads, not their core competency.

A strategic plan should map out three key areas: where your organization currently is; where you want your organization to be; and how you get your organization to achieve its vision. By mapping out these three key areas, leaders and managers can then think, learn, and act strategically. All organizations, big and small, for-profit and nonprofit, face numerous and difficult challenges. Change is inevitable, and organizations will experience the roller coaster ride of facing relative stability followed by periods of dramatic and oftentimes rapid change. A strategic plan helps guide leaders and managers to make decisions that shape and guide what an organization is, what it does, and why it does it. During the most unstable times, a strategic plan can serve as the north star during the most tumultuous times.

In essence, learn from McDonalds. Don’t just react to a trend but make decisions and focus on the elements that are in alignment with your organizational mission, vision, values, and goals. Perhaps, McDonalds should have just cut out some of the fat and made their foods a little less unhealthy. Wait…I think they did by removing artificial preservatives from their chicken nuggets and announcing that their burgers are free of artificial preservatives, artificial flavors, and added colors from artificial sources. Perhaps they learned from their mistake.