blog > The 7 Biggest Mistakes Firms Make in Their Strategic Plans
The 7 Biggest Mistakes Firms Make in Their Strategic Plans
by Sarah Thornhill
In today’s competitive business environment, effective strategic planning is essential for success. However, strategic plans often fail when leaders of AE firms make critical mistakes.
Here’s Why Too Many Strategic Plans Fail
To remain competitive in today’s dynamic, high-stakes business landscape, effective strategic planning is not just a best practice—it’s a necessity. Too often, however, we see strategic plans that fail because AE firm leaders made one of these seven mistakes:
1. Are overly ambitious or unrealistic.
Strategic plans fail when firms set goals that are overly ambitious or unrealistic. While aiming high is important, goals must be achievable and grounded in reality. I’m all for stretch goals, but when the cognitive dissonance is simply too much, frustration, diminished morale, and a sense of failure results when targets are not met.
2. Ignore internal weaknesses.
Some executives refuse to look in the mirror for an honest assessment of their firms’ internal weaknesses. Whether it’s fragile egos, fear, or hubris, they don’t want to accept that every aspect of their firm isn’t simply spectacular. But ignoring issues such as skill gaps, inefficient processes, or cultural misalignments undermines the execution of the plan. An honest assessment of internal capabilities is crucial for realistic and effective planning.
3. Botch communication.
Poor communication is a significant barrier to the success of a strategic plan. When the plan is not effectively communicated to all members of the organization, misunderstandings and misalignments occur. Clear, consistent, and timely communication is necessary to ensure everyone is on the same page. Communication is not a nice-to-have—it’s a must-have.
4. Avoid change.
Change in our industry is often met with resistance, particularly in established firms with ingrained practices and cultures. Strategic plans that require moderate to significant change routinely fail when there is not enough buy-in from the team. Overcoming resistance through change management strategies (including being clear about what is NOT changing), training, and support is essential.
5. Misinterpret risk.
Failing to anticipate and manage risk often leads to the downfall of strategic plans. Risks can come from various sources, including economic downturns, regulatory changes, or technological disruptions. Firms that have been blindsided by unforeseen events often lack a reasonably robust risk management framework that takes into account how likely and impactful these risks are.
6. Underestimate execution challenges.
Crafting a strategic plan only gets you to the starting line; then you need to get your hands in the dough. Underestimating the complexities and obstacles involved in execution leads to front-end loading the plan with unrealistic amounts of work. Remember, you have day jobs.
7. Misalign incentives.
Misaligning incentives with strategic goals is a surefire way to torpedo a strategic plan. For instance, if employees are rewarded for short-term results rather than long-term strategic achievements, they may not prioritize the strategic plan. Aligning incentives with strategic objectives is crucial for ensuring everyone works toward the same goals.
Morrissey Goodale’s strategic planning experts can help you avoid these pitfalls and develop plans that are immediately set up for success because they do the following:
1. Have clear vision statements and goals.
Successful strategic plans are anchored in clear visions and specific, measurable goals. Well-defined visions provide direction and purpose, while concrete goals offer targets to aim for. This clarity ensures that everyone in the firm understands its objectives and can align their efforts accordingly. Now, I get that financial performance is a result of balancing the learning and growth of employees with process improvements and market positioning, etc., but firms that aren’t afraid to get specific about revenue and profit targets—well, they tend to achieve more revenue growth and profitability. From what I can tell, it’s no coincidence.
2. Include comprehensive market analysis.
Effective strategic planning involves thorough market analysis. Firms that understand industry trends, competitor activities, and customer needs accurately identify opportunities and threats. This knowledge allows them to position themselves advantageously in the market, tailor their services to client demands, and stay ahead of competitors. If you are serious about expansion of markets, services, and/or geographies, you have to bring the outside world in to make grounded assessments and sound decisions.
3. Invite all employees to participate at some level.
Engaging as many people in the firm as possible in the planning process (e.g., all-employee survey, etc.) fosters a sense of ownership and commitment. While their insights and feedback enhance the plan’s relevance and feasibility, it’s even more important that they support and contribute to the plan’s success. If there is such a thing as a reasonable person, they don’t need to get everything on their wish list to buy in, but they do need to be listened to.
4. Are flexible and adaptable.
The ability to adapt to changing circumstances is a hallmark of a successful strategic plan. AE firms operate in dynamic environments where disruption has become the norm. Flexible plans that allow for adjustments enable firms to respond to new challenges and opportunities without deviating from their long-term goals. The world happens—that’s a nice way of saying “you-know-what happens”—and when it does, you better not be wearing lead shoes.
5. Efficiently allocate resources.
Allocating resources efficiently is critical for the execution of strategic plans. You need the requisite financial resources, human capital, and technological tools. Successful firms ensure that they have the necessary resources to implement their strategies effectively, which often involves prioritizing initiatives and making tough decisions about where to invest. They pay attention to the law of diminishing returns—set out to do three things, you’ll get them all done; set out to do five things, you’ll get one of them done; set out to do ten things, you’ll get none of them done.
6. Include the monitoring and evaluation of performance.
Regular monitoring and evaluation of progress are essential for strategic plans to succeed. Firms that set up key performance indicators (KPIs) and conduct periodic reviews track their progress and make necessary adjustments. This continuous feedback loop helps them identify what is working and what needs improvement, and it keeps the plan from becoming a “check-the-box” activity.
7. Have leadership’s full commitment.
Strong leadership is fundamental to the success of strategic plans. Leaders who are committed to the plan and working on the firm, not just in it, inspire and motivate their teams. They play a crucial role in communicating the vision, setting the tone, and driving the implementation. Their dedication ensures that the strategic plan remains a priority.
Morrissey Goodale Can Help Your Firm Make Better Strategic Planning Decisions
Morrissey Goodale is the trusted strategic business planning advisor to many of the most successful architecture, engineering, and environmental consulting firms.
Whether it’s developing strategies for recruiting and retaining great people, navigating technological disruptions and remote work environments, or preparing for whatever economic conditions your firm will face, Morrissey Goodale’s strategic planning experts have helped AE firms like yours create the competitive advantages necessary for achieving long-term success.
With deep knowledge of the AEC industry, Morrissey Goodale’s consultants have facilitated hundreds of strategic business planning retreats for architecture, engineering, and environmental consulting firms. Our expert facilitators lead energizing, forward-looking, and productive AEC strategy sessions and guide discussions that improve firmwide decision-making. We partner with firms through all the steps for strategic planning to maintain the momentum and turn the plan into reality.
Contact us today to find out how Morrissey Goodale can help your architecture, engineering, or environmental consulting firm with your strategic planning process.
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