Few areas of organizational and leadership development receive more attention than strategic planning. There are literally millions of pages that can be found through a simple search of the Internet and there are countless books describing how to produce a successful strategic plan. And of course, there is software that you can employ that will help you create a strategic plan, including our own SmartPlan360˚ Program™ that provides dynamic feedback concerning organizational perception and strength weakness analysis.
Judging by the amount of attention paid to strategic planning throughout the business press and business schools, it’s easy to conclude that the one necessary ingredient to an organizational success is a well-crafted strategic plan. Yet, over many years of consulting I’ve come to realize that little could be further from the truth. There are many other factors that directly correlate to an organization’s prospects to achieve its goals and these factors are present in highly successful organizations.
There are three specific dynamics that need to be conquered by an organization to be successful regardless if they are entrepreneurial, corporate or nonprofit:
- The People
- The Opportunity
- The Market
The People
People can be defined as either an individual or a group of individuals who are tasked to perform specific services or to harness specific resources that advance their organization’s productivity and growth. They can be further defined as the boss, supervisor, peer, or can include key providers such as an accountant or capital provider. These are resources that are the most difficult to predict their outcomes other than trying them out and working with them over a period of time. Each organization has its own unique vision and purpose so a person who is successful in one organization does not guarantee they will be successful in the next one. Matching each person’s skills, experience and attitudes with the organization’s culture and mission is critical to keeping an organization on track to achieve its goals.
The Opportunity
Opportunities are typically quantified in dollars and that can lead to false optimism for the future. How many strategic plans have been written predicting “Moderate Growth Success” at $50 Million in annual revenues only to fail within its first three years of operation? In fact, 50% of all organizations fail within their first five years and the great majority of them possess wonderful strategic plans. A truer evaluative tool comes from understanding how well the organization’s people truly fit the desired opportunity.
The Market
When building an organization from one point to the next, context is everything when it comes to making quick strategic decisions. The greater the understanding of a target market the greater the chance of success. Conversely, a deep understanding of one market does not qualify an organization to quickly understand a new one. Any activity that requires an investment of some kind, including scarce resources causes a higher quotient toward failure because there are both internal and external costs that need to be managed. This is particularly critical in the earlier stages of an organization’s growth where resources are usually scarce and borrowing is an expensive proposition. Therefore, understanding the target market is an absolute essential dynamic for organizations that would like to grow.
These three dynamics of people, opportunity and market provide business leaders with a fairly easy way to identify if their organization is on or off strategy. The difficulty is not identifying them. Rather, the hard part is assembling a team that possesses the necessary depth of experience and relevant skills to successfully pursue the opportunity. Fully experienced leaders are able to create an attractive, sustainable business model that pulls from the team’s current skills and abilities. Organizations that pursue too many disparate markets and offer too many services are the ones that typically falter and ultimately fail.