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Plans Can Be So Overwhelming

February 2009

We hear over and over that we should have a plan. Ideally, a budget is the translation of a plan into dollars. So before we can drill down to budget figures, we have to come up with a plan to link it to.

The two most popular planning structures are "strategic" plans and the Balanced Scorecard. Each of these structures has its drawbacks. I like to combine the strengths of both of them to create a hybrid, solid plan.

The strategic plan… you know the old vision, mission, goals, objective structure… tends to leave planners hanging at the goal level. And the balanced scorecard doesn’t naturally encompass a vision, mission, and values statement. But if you pull them together they complement each other quite nicely.

But in order to see how they link together, we have to find out what each is about individually. First, I will discuss strategic plans and how to create them. Then I will discuss the balanced scorecard. Then we can talk about how to combine them and link the budget to the plan. This will take quite a few newsletters to accomplish.

First, a little attitude

Woodrow Wilson pointed out that there are profound distinctions between men of though and men of action. There is a place for both. Thinking alone with no contact with the real world leads to theoretical treatises that gather dust in the archives. Acting alone without thinking is dangerous.

Please make sure you don’t spend so much time thinking up a really dreamy vision statement that you forget to act. I have seen many teams invest significant money and time in coming up with these more squishy aspects of a strategic plan. And at a certain point, folks lose interest and want to get back to their work. Bored and frustrated employees mentally check out before the whole thing is fleshed out.

Can you tell that I have a mildly bad attitude about vision and philosophy statements? Many people will strongly disagree with me. They will say things like:

Vision Statements and Mission Statements are the inspiring words chosen by successful leaders to clearly and concisely convey the direction of the organization. By crafting a clear mission statement and vision statement, you can powerfully communicate your intentions and motivate your team or organization to realize an attractive and inspiring common vision of the future.

When you write your vision down, you will clarify all other downstream aspects of marketing and operations. When you are clear on your customers, scope of your geographic influence and the product and service…..you are clear on your future.

I have one speaker friend who redefines her business vision statements a few times a year. Every time I see her website, she has transformed her purpose statements into something new. I know she spends a lot of money on coaches to help her pull off this Madonna-like transformation—but I don’t think her revenues have ever increased as a result of all of this shape shifting and deep thought.

There are plenty of consultants out there who are more than happy to take a fee and hold a workshop with your leaders for two or three days and develop a strategic plan. Developing the vision and mission statement, is, no doubt, the most entertaining phase of strategic planning.

I have been part of these and even led these on more than a few occasions. And I have seen teams leaving the meetings enthused, only to see it fall apart a few months later.

Usually, the planning team (the executives) spend days coming up with a vision and philosophy statement that sound much like everyone else’s vision and philosophy statement. It usually sounds like "We endeavor to be a world class organization bla bla bla." And the philosophy/values statement often sounds like "We value our people."

This sort of squishy, vague, feel-good terminology doesn’t really ring my bells. But I do see enough benefits in it to invest some—but not a lot—of time in creating a vision, mission, and philosophy statement. Sometimes the fun, dreamy meetings it takes to create these statements takes so long that the team never gets down to the real business of budgeting and defining performance measures; the real nitty-gritty where the rubber hits the road.

Part of the reason why the strategic plan never gets finished is that folks are left to their own devices at a certain level of detail. They are left flopping in the wind with no guidance or structure—and they understandably get frustrated and the process bogs down. By combining the strategic plan and the balanced scorecard structure, you can avoid this. If you plug in the Balanced Scorecard at the goal level, managers have something to hold on to.

Strategic planning components

The basic strategic planning structure includes seven components:

• VISION: An inspiring picture of a preferred future not bound by time—represents a global and continuing purpose.
• MISSION: A statement of what the entity does, why they do it, and for whom they do it. Spells out the reason for the entity’s existence.
• PHILOSOPHY/VALUES: The expression of the core values and operating principles of conduct for the entity in carrying out its mission.
• GOALS: The general ends towards which the entity directs its efforts.
• OBJECTIVES: Clear targets for specific action that quantify progress towards meeting a particular goal.
• STRATEGIES: Methods by which the entity seeks to accomplish its goals and objectives.
• PERFORMANCE MEASURES: Quantifiable results measuring whether the entity met its objectives and strategies.

Jethro’s Strategic Plan for Texas

In this tongue in cheek diagram of a strategic plan, I am following one arm of the strategic plan from vision down to a specific performance measure. I left out philosophy/values and I didn’t include every element of the plan—as I simply do not have room! This is a partial description of a strategic plan for the State of Texas, Jethro style.

If you actually drew the entire strategic plan for any large organization, it would look like a crazy octopus with multiple arms and a really tiny head.

Scary.

Now why am I showing you this? To frighten you? No. But I do want you to appreciate the overwhelming helpless feeling that many managers feel when they are confronted with the task of developing a strategic plan for their department.

The consultant leaves after helping with the three easiest, most entertaining components of the strategic plan, the vision, mission, and philosophy/values and then tells each manager to go develop the rest of the structure themselves. No wonder folks get bogged down and the whole process stops!

Avoid the bog!

Instead of hiring a consultant to lead a four-day retreat that doesn’t get the plan finished, I recommend you do two things to develop a strategic structure.

1. Come up with the vision, mission, philosophy values statement yourself (with a minimal time investment!)
2. Lean on the balanced scorecard to drill down beyond the goal level.

So next month, we will discuss how to develop a vision and mission statement without investing too much time.

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Leita Hart-Fanta, CPA, CGFM
Resides in Austin, Texas and can be reached at www.happycashflow.com