The odds are not in your favor when it comes to successfully accomplishing your strategic plan. Over the past 20 plus years, Founder and CEO of Afterburner, Jim “Murph” Murphy has seen plans fail time and time again for the same reasons. He sits down with Thor to discuss the top five reasons strategic plans fail and what you can do to make sure yours does not.
[Below is a transcript of the episode.]
Thor: Today, I’m here back again with Murph, Murph our Founder and CEO at Afterburner. And we brought Murph in because we’re gonna talk about probably the most challenging thing that we do at Afterburner for companies, and that’s helping to build strategic plans. So everybody builds strategic plans, this is the time of year when the strategic plans are being rolled out. And the challenge is, only about a third of those critical can’t fail, initiatives will be accomplished. And we know that because there’s a great study, check it out, it’s a Harvard Business Review article where they tracked 1,000 publicly traded companies. They listened to what they said they were going to accomplish and compared that against what they actually did that year, and they found out that 33% of the time they accomplished their goal, 67% of the time they failed. So what gives? Why do we find ourselves in situations where they put the effort in to build these plans and yet at the end of the year, these perfectly capable companies are failing two-thirds of the time on their strategic initiatives? Murph, welcome to the Business ThorCast.
Murph: It’s great to be here. And that’s just such a powerful statistic, 33% and I know that we’ve worked with companies that would love to have 33%, so why is it that the commitments that we make to each other, our teams into the most important things, how is that we fall so short Thor?
Thor: And it’s something that is important to me because I’ve built plans with teams, I’ve watched them put the effort into it and then not turn that into execution on the back side. And so, it’s not enough to just have that plan at the end of the day, and you’ve been doing this for 22 years, thousands of strategic plans that you’ve helped build, hundreds of different companies across every industry. And today, we’re gonna talk about the top five ways that we’ve seen strategic plans fail over your 22-year tenure and my time here as well.
Your Strategic Plan is Too Complicated
Murph: Let’s get right off to the first one. I think this is the one that we could all probably agree on is, one of the biggest sins, if you will, that stand in the way of commitment and execution, and that is the strategic plan itself is too complicated.
Thor: It reminds me of… We were with a group about two months ago and they were going after $150 million opportunity, they were scaling from $120 million the year before and the CEO built this incredible plan. He had made it a 45-minute presentation. It was 30 different slides. All these graphs, all these charts, and it really was well thought out. You had to hand it to him. But, what was wrong with it? The plan was too complicated. In other words, the people watching this presentation walked out of there, and they couldn’t remember two slides out of the entire thing because there was too much information to absorb at one time. And so, as leaders, it’s so critical that you build a plan that’s easily consumable and digestible by your team, knowing that this is gonna be something they’ve got to go out and execute. So you have got to emphasize the key things that need to come out of that plan. Murph, what do you think?
Murph: If you really think about it, if you have challenges in execution and you go upstream, what’s the reason? It’s the plan, but more importantly, what is your tactical plan subservient to the strategy? One of the things that we learned as fighter pilots that if you have a sloppy briefing, most likely you’re gonna have sloppy execution. If the briefing comes off a little bit late and you step to the jets a little bit late, you know the mission’s gonna be a little bit late. When you really roll that out that’s probably because the strategic plan itself, the leader’s intent, is either way too simplistic, but most of the time, the biggest thing that we see is the strategic plan itself is just entirely too complicated.
Thor: It reminds me of when I was flying as an instructor and we were training students, and we had this great instructor. He had been around forever. He was a former commander on our team, so literally one of the best flyers, best pilots, in our squadron; one of the best pilots I ever came in contact with. And as he was teaching students an interesting thing was taking place. He had an inordinate amount of students that were failing his sorties, meaning he’d go fly with them, he’s their assigned instructor, and when the students would come back, he’d say, “I’m sorry, that’s an F, you failed.” And if students get too many Fs on their missions, then they stop flying aircraft and they start flying desks after that. And the whole pilot experience is over for them. So it’s really critical that we figure out why they’re failing. And it turns out a lot of these students were failing because they oversped their landing gear.
Thor: And what that means is, they went too fast for the landing gear, the gear that you land on, the wheels at the bottom of the plane, you can retract those back up into the belly of the plane and the trick is, you actually have to retract those before a certain speed, because if you over speed them in flight, the friction and the air resistance is so strong that it can damage the aircraft. It can actually rip the gear right off the plane. So it’s really important that students get those gear up in a timely fashion. And so, we did a little investigation to find out, “Well, why are all his students over speeding their gear? What gives?”
Thor: And it turns out, every time the student would take off, this instructor would say, “I want you to look inside at your engine instruments and say, ‘I have two good engines, no fires.’ I want you to look outside and look for birds. And I want you to say, ‘I see no birds.’ I want you to look outside for traffic that might cross in front of you and say, ‘No airplanes in front of me.’ And then I want you to reach down and say, ‘Gear clear and put your landing gear handle up.'” Well, what it turned out that was taking place, it was just too much information, it was too complicated. And this was something that worked great for him because he’s got 4,000 hours of flight under his belt, and so it was easy for him to check all these things and not make a mistake, but for his students, they couldn’t do it. So by the time they got to step number two, they had already oversped their gear, they’d already failed the ride and it’s because he made the plan too complicated.
Murph: I think that’s a great example of not only the here and now, some of the tactical execution and complexity but how that flows up to a strategic plan as well. One of the things that we also want to talk about, too, is a plan, a strategic plan that doesn’t have buy-in. And we know one of the biggest reasons that plans don’t get executed is because they don’t have sufficient buy-in and Thor, what to you think the main reasons of that are?
Thor: Well, the sufficient buy-in comes from building that buy-in with your plan, but at the end of the day, it’s about having Sesame Street simplicity. It’s about allowing your team to see that you have a plan that can be presented to them in less than 10 minutes. And it’s really important that it can be done in less than 10 minutes because that’s about all the time and attention that the team is gonna spend on it. So, we say no more than about five slides, no more than 10 minutes. When you build this plan with us you’re gonna pack in some really important details into that plan in those five slides. We’re gonna practice with you, we’re gonna make sure that no kidding, you can deliver a clear, compelling brief in less than 10 minutes for everything you’re gonna do in the next year and connect that to your three-year vision or high definition destination, as we call it.
Your Strategic Plan was Built Behind Closed Doors
Murph: Okay. So that’s executing a plan because it’s too complicated. We talked about buy-in as well, which brings us to our second point on why we believe strategic plans fail to be executed and that is the plan is built by the leader behind closed doors and then sprung on the team. Or even worse the plan’s built by a bunch of consultants and I know Thor, you’ve got some good stories about that.
Thor: Well, we just get asked to go help out with companies that have had a consultancy with them recently. And a lot of times it’s one of the big five consultancies and we’ll be asked to come help them out about six months after the consultants have left. And we’ll say, “Alright, what type of help do you need?” And they’ll say, “Well, the consultants were here, they dropped off this plan.” And they’ll point at a binder. And we call the big white binder. And this enormous binder is sitting on top of a cabinet and is gathering dust and when you open it up, it’s just this gorgeous plan inside. It’s incredible, immaculate slides and Excel charts and great background data for the industry and best practices, it’s really a site to behold. The only problem is it’s built in a vacuum, meaning it’s built by other people and handed down to this team. And so what do you think the level of buy-in is from all the people that have to go execute this plan that didn’t have one input made on how it should be executed? None, they don’t have any buy-in whatsoever and so when they go to execute this plan, not only are they really not familiar with it, but they don’t believe in it at the end of the day.
Murph: I think it’s just so important that, as a leader, you get your team members into a room when you plan. I think a lot of reasons that people bring in consultants is they believe they really just don’t have the answers, and to be totally honest with you, who does in today’s complex environments? Your team probably has more answers, more situation awareness than anybody that you can bring in to the outside. It’s just the way you really facilitate that meeting and that planning session.
Murph: So we recommend that you get your top three echelons of rank, if you will, into the room, from not only the C-Suite that’s responsible ultimately for executing the strategy of a business but that next level and even the fielded commanders. Because a lot of times the folks in AMEA or the folks in South America, are the folks in the Pacific, if you’re a global organization, their perspective of what’s going on in their own marketplace is a lot of times much different than what the folks think is going on back in the headquarters building. So if you really want to have the best plans, have the right people in the room. And hey, if they don’t have the answers today, with our digitalized age that we have right now, and AI, and all the other tools that we have associated with us, the answer is at a fingertip. The key is that we get the strategic plan in action as quickly as possible and then obviously if you’re following flawless execution, we’re gonna iterate when those plans hit their first debriefs. So we think that’s extremely important. Make sure that the plan incorporates the team’s intellectual capital before you start to execute it.
Thor: In the military we’d say we want to have someone who’s closest to the action, closest to the front lines, building the plan with us because they have the insights and the ability to see the challenges best from their perspective. And they’re gonna give us a way to refine the plan and make it even better given the most recent challenges that they’re facing. And in the corporate world, Andy Groves got a great quote, the late Intel CEO where he said “Snow melts at the periphery.” And that’s where he wants to go to get information. And that means that the snow is melting from the outside in. And so you don’t look at the middle of a snow bank to see if it’s melting, you look at the outsides. And that’s the same thing with a team, you need to see the changes that are taking place at the periphery, at the edges of the team, and the only way you can to that is if you involve them in the planning stage and earn their buy-in, their insights and their perspective. Alright Murph, number three, what’s the number three reason you’ve seen plans fail?
You Don’t Communicate Your Strategic Plan Enough
Murph: Well, I would say that it’s real simple, we just don’t communicate the plan enough. I think that we see a lot of times leaders that spent an enormous amount of time planning and they finally brief or roll out that strategic plan, where? At the annual meeting. They’ve spent a ton of time getting ready for that PowerPoint, that annual meeting, the CEO’s message and then when the meeting is over the leadership team falsely believes that they’ve articulated or communicated the intent, the strategy, enough. And we’ve just seen time and time again that if you’re not briefing the plan over and over and over again, it’s just not gonna be realized and executed, wouldn’t you agree?
Thor: That’s one of the biggest challenges for senior leaders because when you’re a tactical leader, when you’re just starting out as a leader, it’s easy for you to stay close to your team, to know every one of your team members by name, know how many kids they have, know the names of their pets, but then as you grow as a leader and you get more and more responsibilities we find ourselves leading teams that are larger than the list of people that we can remember, and it becomes more and more important as you grow in leadership and responsibility that you’re able to clearly and concisely communicate the key details of the plan.
Thor: And the worst thing you can do is a combination of the steps one and three we talked about where you only communicate the plan once and then you make the plan too complicated. So you roll out some hour-long version of the plan at your last all-hands meeting, and you think, “I did it, I came up with this fantastic plan, I briefed to them back in January.” We had a leader who actually said that to us who said, “You know, it’s April. This plan has been sitting in their inboxes for three months, I briefed it to ’em in January, no one’s done a thing on it.” And I said, “Well, when’s the last time you presented it to ’em?” He said, “Well, January. I did it, I did my job.” Most of the time as a senior leader you’re just reciting a talk track, you’re literally just doing the messaging over and over again so you can clearly communicate your leader’s intent and so that everyone on the team can hear it. Because how many times does it take for a human being to remember something? How many times does a human being need to be told something, the same thing before they remember?
Thor: I’ve actually said this in a previous podcast, so if you don’t remember and you’ve listened to these podcasts, then you’ve fallen victim to this rule. It takes seven times, you need to repeat things seven times before your team remembers it. So if you’re pulling your hair out and saying, “I already told them three times, I don’t know why they’re not paying attention.” Instead of looking it that way say, “Only four more times to go. They’re all human beings, they’re gonna wait for time number seven before it really resonates and it takes hold.” So you need to present it again and again and again. Number four, Murph.
Lack of Inspired Alignment and Disciplined Execution
Murph: I think, this is a big one and that is the whole purpose of having the strategic meeting, the annual offsite if you will, is what? To inspire and align folks around the plan. But the most critical part is the disciplined execution as well. It rolls right into communicating or briefing the plan seven times or more. But it’s that lack of commitment, we have to actually put the plan into action. So just because we communicated the plan at the annual meeting does not actually mean that planning has occurred. It doesn’t actually mean that the first steps have been committed to. So if you really, truly want your plans to be executed it’s not enough to brief those plans, we need the first step of commitment to immediately occur. We have to set the plan in place.
Thor: We say at Afterburner that success requires two things: It requires inspired alignment and disciplined execution. Inspired alignment, your team should be excited about what your building, what you’re doing as a group. You’re putting them forth in an incredible team with an inspiring mission. They should be excited about what you’re constructing with this group and what the future holds for them. But that’s not execution, you need to turn that into accountable, consistent execution with consistent inspection of progress to make sure that you stay agile during that execution. Here’s the challenge, inspired alignment and discipline execution require very different skill sets. Often they require different types of leaders. Some leaders are visionaries others are operators and you can tell which ones gravitate towards the inspired alignment or the discipline execution.
Thor: And here’s the trick, if you’re one of those visionary leaders and you get your team together and they’re all bought-in and they’re hooting and hollering at your all-hands meeting because of the direction that the company is going and they’re super excited about it, well then you need to, as quickly as possible, turn that into execution. We worked with a team back in… When was it? November. Fantastic team, loved this group. They built an incredible plan, they had incredible alignment with the group. They walked out saying, “We can really do this, we’re gonna take over the industry and do some incredible things.” This is a big team with some big responsibilities, more than 2,000 people. This is about a $2 billion vertical for a company and a month-and-a-half goes by, and we’re harping on them saying, “You need to turn this into execution.”
Thor: They didn’t have the culture of turning this alignment into execution quickly. They were crossing their fingers and hoping that all that alignment would magically turn into action when they got home. That’s not the case. We have to kick start that action. You have to start it you have to plan to begin execution. That’s why briefing is step number two in our flawless execution cycle, plan, brief, execute, debrief. And so what these people had failed to do is turn that plan into action as quickly as possible. And we’re two months into it and they’re losing momentum on it as every day goes by. Murph number five.
Murph: Before we move to number five I just want to encourage all of our leaders out there that when you do have those annual planning meetings when you do get your team together and you communicate your plans, you cover what worked previously and then you set those all important goals. Don’t leave the meeting without at least the first step of commitment that everybody is committed to. Wouldn’t you agree Thor?
Thor: Such a good point. And it’s something that we harp on at the end of every one of these sessions. One of my favorite quotes is that “Vision without action is daydreaming.” If we just get together and do these all hand sessions and get everybody pumped up about where we’re going, then that’s daydreaming and nobody likes that because they say, “You know what? Let’s just skip the all-hands next year, let’s just continue working. We’re better off just sticking our nose into the grindstone and keep going.” But vision without action is daydreaming, action without vision is a nightmare. So you don’t want to be on either side of that coin. You don’t want to be that group that just gets together and plans and never does it but you also don’t want to be that team that never connects activity to a compelling why or connects it to a strategy. Action without vision is being busy for the sake of being busy. This is when you have high churn rates and people leaving your company because they just don’t understand why they’re doing all this work. So you want to have both the inspired alignment and the discipline execution to succeed. Last but not least.
Your Team Is Not Focused on the Strategic Plan
Murph: I think this last one, we’re all guilty of as leaders, and especially if you’re a leader of an entrepreneurial team, a team that’s growing, there’s always another great thing available out there. There’s always a new blue ocean that comes up. One of the most important things that you can do as a leader is to keep people focused on what you’ve currently committed to. It’s your job to control the noise and probably the best way to do that, and it is hard to do, especially for me, I know for sure, and that’s to say, “No.” When you first start a project, when you first start getting things rolling, almost everything’s a “Yes” to get that momentum, that inertia going. But once you get something on track, it’s really important to start managing your yeses and bring in a lot more, nos so you can keep the team focused.
Thor: There’s a sales leader that came to us in July of 2016, and he said, “My team has missed their numbers the last two quarters.” He said, “We’ve combined two selling cultures, two different products, and we thought it was gonna be great. We thought one plus one will equal five and there’d be all these synergies off of bringing these two selling cultures and products together, but we’ve found out that we didn’t have a really good plan for meshing these cultures and making sure that they were able to have synergy on the other side of it.” And because of that, missed their numbers for two quarters. He says, “I probably got another about a quarter and a half before they’re gonna fire me.” And this is a billion and a half dollar vertical. And this is a publicly traded company. It’s already affecting their stock price. And so, here’s the great thing about this leader. He had the foresight to not bring us in and say, “Just fix my numbers for this quarter,” and how tempting that must have been. Because that was the closest alligator to the canoe for him, was the next quarter and just hitting their numbers. But he had the ability to say that, “I know we need to change the strategy and not just our tactics.” And so, he sat down with us, and we helped him build out a three-year, long-term, high-definition destination.
Thor: Something that everyone could get excited about, build that inspired alignment, what could be as a team, and then based off of that destination, they worked backwards to make informed decisions about what they needed to do this year and this quarter. They figured out their three critical leverage points, their three can’t fail initiatives based off of that destination. They build out these critical initiatives, they build a plan towards them, they start executing on them.
Thor: Well, fast forward a couple weeks in execution, they’re doing well. They’re actually sticking to their plan. Things are starting to look like they’re turning around and now they’re getting a bit complacent and the team starts approaching him and saying, “Hey, boss, I know you said that we only had these top three things that we’re working on and hey, I love that destination you planned, great idea, but I’m working on this other project and it doesn’t really relate to those top three destinations. And I’ve been working on this since last April. Surely, you want me to continue working on that, right? Surely I should just go off and continue with this piece.” And the boss had the foresight to say, “No. Do not continue working on that.” He said, “We need to be maniacally, obsessively focused on the critical few as a team.” And that’s the toughest thing a leader can do. And to his credit, and truly the reason I believe that this team succeeded, he was able to say “no” to the noise, and he focused his team on the critical few. And I could tell you that this same team has now not only hit their numbers but blown them on to the water for the past four quarters and the stock price has since more than doubled in that time frame and a lot of that’s due to this vertical.
Murph: Well, let’s close out. Let’s recap real quick, Thor. I know we talked about a lot of things, but let’s break it down into some simple steps. Why your plan will fail. We’re talking about strategic plans here. The things that we talked about is number one, your plan is too complicated. Thor, you talked about the gear up story, over speeding the gear. Number two, the plan is built by just the leader or maybe consultants, you’re not getting that buy-in from the group if you will. Number three, you don’t communicate the plan enough. We know that people don’t really understand things or they really don’t hear with all the noise that’s going on out there unless you communicate over and over again, and you mentioned that all magic seven times. And four, you don’t turn inspired alignment into disciplined execution. After your strategic meeting, after the times when you get your teams together, plan far enough after you inspire everybody to at least get those very first commitments so you have a true biased action. You start to create the bow wave, not just around alignment and inspiring your folks, but on the actual first step that needs to be taken on the way. And then the last one is just controlling the noise. Sometimes, it’s more about the nos and focusing your team on those most important critical initiatives, make sure there’s not too many of them in that strategic plan.
Murph: I know one thing I’d love to do, Thor, before we sign off is that you and I both wrote articles about that in the third and fourth quarter of 2017. I think your article came out on December 14th, “The Top Five Ways Your Annual Plan Will Fail Next Year.” And I wrote an article on September 13th, “Why You Can’t/Won’t Execute.” And I think they’re good articles for our folks out there that are starting to execute their plans in 2018. If they want to go to my Linkedin, they’ll be able to download that article. James D Murphy on Linkedin and Thor, I think everybody knows how to get a hold of you as well.
Thor: It’s amazing how similar they are. We approached it at different times. We didn’t consult each other beforehand but it just goes to show you, we’re seeing the exact same problems over, and over, and over again. And like we’ve said in the past, look, success really is simple. At the end of the day, it’s not magic. Success is simple. The world is chaotic and complex around us but success is simple. Here’s the thing, it’s not easy. If you follow the prescriptive steps that others have laid out before you, then you will succeed. You have the odds in your favor but you have to maniacally and obsessively hold your teams accountable to that strategic plan.