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I truly believe in the power of a good strategic plan. A good plan provides a common point of reference and tells the members and leaders the why, what, and how of the organization. More importantly, a good plan will help everyone understand their part in the organization's success.

Any business, organization, or even person will sometimes find themselves having to respond to crisis or disaster. A good strategic plan provides a reference point when that happens. It may be necessary to suspend concentration on the plan's goals, or at least slow them down, until the crisis is resolved. At that point the plan provides a reset point to prevent the too common post-crises floundering.

So, if strategic plans are such a great idea, how come so many people hate them? Or at least don't use them? I hear lots of comments from people who've had a bad experience and found strategic planning to be ineffective and a waste of time. Unfortunately, upon hearing their story, I often have to agree with them because the planning process and model they used was flawed.

Don't Kid Yourself! If Your Strategic Plan Isn't in Writing, it Doesn't Exist, Period!
By Martin Harshberger

Does your company or organization have a clear, crisp and documented Strategic Plan? Or are you one of the many that claim to have it "in your head"?

When I speak to business owners and CEO's I hear that answer so often that I've come to expect it. According to the National Business Association, more than 50 percent of small to mid-size businesses don't have written business plans. And when written plans do exist, most are on a shelf or in a file drawer, gathering dust.

Does your organization have a written plan with clearly defined goals?

o Does that plan articulate your vision and direction clearly and succinctly?
o Does everyone in the organization understand the plan and refer to it often?
o Are departmental goals and individual compensation tied to plan achievement?
o Can it be easily communicated?
o Does it provide a benchmark for evaluating your business?
o Does it give you the flexibility to alter your course rapidly in response to changing circumstances?
o Do you have a dashboard with key metrics to gauge progress against plan?
o Are those metrics visible to all employees?
o Are the people affected by the plan fully engaged and committed to accomplishing it?

If you answered "no" to two or more of these questions, there's a good chance you don't know where your organization is going or how it's going to get there.

Why do you do what you do? Perhaps you are very familiar with what you do and maybe even how you do it, but have you really defined why? In Start With Why: How Great Leaders Inspire Everyone to Take Action, Simon Sinek implores the reader to understand the why as the critical piece of information that separates success from mediocrity, or even failure.

Too many times the lack of a crystal clear understanding of why prevents the kind of success that most businesses are looking for. Leaders often tend to concentrate on what they do, without considering why. The TiVo is but one example of failure to understand, and explain the why. While TiVo is a household word, the actual company was not successful; according to Sinek, because they explained what the box would do, but failed to explain why consumers would benefit from owning that box.

You often cite studies showing that employee replacement costs can be as much as 50% - 200% of their annual salary. Can it really be that much?

Yes! There have been many studies on this but, as the broad cost range indicates, it's a very difficult thing to state precisely. That's mainly because replacement costs vary by type of employee and situation. In a very generalized sense, there are two broad categories of potential expenses. First, there are the costs of recruiting and hiring, and possibly the costs of terminating or just loosing the former employee. Second, there are costs associated with orienting and training the new employee. Often overlooked, and very difficult to quantify, is the cost of upset workflow as a new employee gets familiar with the job and the cost of compensating for the lost experience. It may sound like a silly question, but how long does it take to replace 5 years of experience?

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