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Published Articles by David Balovich

Title: Does Your Operational Plan Compliment Your Company's Strategic Plan?  
Published in: Creditworthy News
Date: 12/22/05

As 2005 draws to a close many professionals are preparing or analyzing their goals and objectives for the coming year.

All too often these operational goals fall short for one simple reason. They fail to compliment the organizations strategic plan. In spite of this, it is possible to turn operational goals and plans into individual actions, necessary to realize the goals of the organizations strategic plan. But it’s not easy. Most companies repeatedly fail to motivate their people to work together to achieve the corporate objectives. The majority of companies know their business and the strategies required for success. However too often they struggle to translate the strategy into the action plans that will enable their strategy to be a success.

Although most companies have a strategic plan, between 70 and 90% fail to execute them. A recent Fortune magazine study concluded that the majority of businesses, who fail, do so not because of bad strategy but because of poor execution. In a survey of 1000 public companies, 80% of the directors surveyed reported they felt they had the proper strategy but only 14% thought that they were implementing strategy well enough and only 1 in 3 companies, in their own assessment, were achieving strategic success. The message seems clear that in order to achieve strategic success you have to effectively promote the strategic plan to those responsible for carrying out the plan, subordinates.

This brings us to the three essential elements in meeting the organizations strategic plan:

MOTIVATIONAL LEADERSHIP – is achieving sustained performance through personal growth and planning that recognizes the human dynamic. Leadership is required to not only compete effectively but also grow the business. Every employee needs to be aware of what the organizations strategy is and their role, the importance of their job, in achieving the strategic plan.

TURNING STRATEGY INTO ACTION – a phased approach, linking identified performance factors with strategic initiatives and projects designed to develop and optimize departmental and individual activities. The real need here is to creatively bring the strategy to life by creating operational goals and objectives that are designed to not only meet the strategic plan but also compliment all other department’s goals and objectives as well. Once this is accomplished every unit in the organization is working together to achieve the success of the organization. To accomplish this it is necessary to identify the three important ingredients to the organizational plan and the questions that have to be addressed.


What does the strategic plan intend to accomplish?

What does our organizational plan have to contain in order to accomplish the company’s plan?

Action Plan

What do we need to create, refine & accomplish to meet the company objective?

When will we know we have achieved success and how will it be measured?

Detailed Plans

How will projects be led and resourced?

Who will be responsible for each task?

Are individual work plans aligned?

What is the review process?

Following these processes can provide an outline of how to prepare departmental goals for the purpose of assisting the organization to meet the strategic goals. Involving the right people is essential to making the correct decisions not only on priorities but also creating action plans that are clear and attainable. The objective is for everyone in the departmental unit to understand company strategy and specifically know that what they are doing is contributing to the company strategic plan.

 PERFORMANCE MANAGEMENT – involves the building of organizational processes and capabilities necessary to achieve performance through people delivering results. Too often great plans remain just that, “plans”. Typically, the energy and enthusiasm that goes into developing a great plan fades as day-to-day operational issues get in the way. Most organizations and its’ people respond to fire-fighting and reactive task scheduling, instead of planning proactively to make the strategic plan a success. It’s one of the reasons that most American companies re-address their five year plan an average of every six-months if not more frequently.

To make strategic planning meaningful and not the punch line of the company joke, everyone in the organization has to be engaged and encouraged to take action, which means:

Communicating the strategic intent and action plans to every employee;

Using project management principles to make necessary changes from previous years;

Setting individual targets and work projects designed to meet the strategic priorities;

Consistently measure progress and assessing and providing feedback about performance.

The most commonly overlooked element in achieving the company’s objectives is commonly referred to as “emotional contracting” or the “psychological contract”. This is the crucial link between the organizations intent and the motivations, values and aspirations of its’ employees.

It is vital that:

Strategy is communicated to all;

Performance is measured in real time;

Success, regardless of significance, is acknowledged immediately.

If the employee does not have the desire, motivation or encouragement to meet the company’s’ objectives, regardless of their position, then the company will not succeed. A well worn story illustrates this point:

A group of auditors from the General Accounting Office were visiting the NASA space facility in Houston at a time when budget cuts were being considered. One of the auditors asked a man cleaning the floor “so what are you doing here?” The man answered, “I’m here putting a man on the Moon!”

How closely do you and your subordinates identify and associate the job you perform with the company’s organizational purpose? Do you and your subordinates know what the company’s aims are, and if so do you and they see and agree with how you/they fit into the overall scheme? Sadly, in many organizations the vast majority of staff does not understand or know what the corporate aims are, let alone see themselves as an integral part of the effort. Strategic goals will not be achieved unless every employee is an enthusiastic part of the effort. All very easy to say; another thing to entirely make happen. The “Man on the Moon” statement is an example of the process necessary to turn any strategy into action, whether a team, a department or a corporation. Every single employee must know what they are doing, why they are doing it, and above all, must be fully committed to doing everything necessary for the company to meets its strategic plan.

The challenge of every department head is to turn theory into practice; make something happen; and translate strategic plans into real business results. This will be accomplished only when there is synergy between strategic and operational planning.

I wish you well.  

The information provided above is for educational purposes only and not provided as legal advice. Legal advice should be obtained from a licensed attorney in good standing with the Bar Association and preferably Board Certified in either Creditor Rights or Bankruptcy.  

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