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Jan 24, 2011

Why Business Plans Fail


(Some organisations put a lot of effort into the business planning process for little result.  In this blog we discuss some of the common faults, as we see them.)



Category: General
Posted by: Cambron

As part of Cambron’s work with different organisations, it is obvious to us that business plans are not always as effective as they could be.  It seems that between the formulation of the broad organisational objectives and the actual delivery of strategic initiatives things too often go astray.  Following are the reasons, we see, for business plans missing the mark.


At the preparation stage, those involved may not understand or be committed to the stated organisation mission, vision and values.  If there is not a shared understanding of big picture organisational direction and aspiration there is little chance that supporting plans will deliver.

Confusion often exists as to the planning terminology used.  What are KRAs, Lag Indicators, Objectives, CSFs, Goals, Process Indicators, Themes, Cornerstones, PIs, Strategies, Tactics, Strategic Initiatives, Actions, Tasks and Domains?


Have a commonly understood and shared mission, vision and value set for your organisation.  This is critical.

Make certain that the planning terminology used is clearly defined in writing and illustrated with practical examples.  Avoid allowing those who want to try and impress confuse others by introducing alternative terms.  Pick up almost any text on strategic planning and the author will define common terms differently from others – don’t flip flop between.


Too often higher level planning elements, typically Goals or Objectives, don’t have unambiguous success indicators (often labeled as KPIs or CSIs).  This might be because the goal or objective is poorly worded or it is simply not feasible to measure it by available means.

If there is no measure there is no clear indication that any committed resources have been successful.


All higher level aspirations should have success indicators based on measureable outcomes such as road distance maintained, satisfaction surveys, financial ratios, waste recycle rates and planning results.

If it is not possible or practical to define outcome measures ensure that process or lead measures are allocated.  As an example, the goal and success indicator of “Council will reduce its carbon footprint by 20%” may sound great but it is just not reasonable for a council to measure.  A better approach would be “Council is committed to reducing its carbon footprint and will implement at least 3 significant initiatives to this end”.  The lead success measure would be the agreement and implementation of those 3 initiatives.

There is a constant balance between the cost of gathering measures and their value, all the more reason to think carefully about their relevance and construction.  Twenty or so well thought out success indicators relating to higher level plan elements are of more value than many low level or ill considered measures.



So often plans are developed without allocating responsibility for each element within the plan, of course these plans fail.  Each manager or employee believes someone else is responsible to make things happen.  If the particular plan element is also unclear, there is even less likelihood that it will be challenged as unworkable or unachievable.


Responsibility should be allocated to an individual as soon as possible during the planning process; this will ensure that the plan is properly resourced and that timelines are achievable.  Much better to have robust discussions upfront than after the plan has been approved.



Often plans are developed that ignore the practical aspect as to how and when progress is to be reported.  Of course, any delay in reporting performance is likely to delay the identification and resolution of unforeseen barriers to success.


As part of the planning process consider how, what, when and to whom progress will be reported.  Then, if elements of the plan don’t flow to lower level responsibility, are duplicated or poorly worded they are more likely to be exposed.

Too many planning documents will never move out of the top drawer or off the website page because they are not able to be regularly reviewed.  They become an embarrassment best forgotten about.



The KIS principle can be invaluable throughout the planning process.  A plan with excessive layers or a ‘brave’ attempt at a matrix model, when simple planning methods have already been unsuccessful is doomed to failure.


Don’t make things more complicated than they need to be.  A plan that is up and going from day one is more effective than one that is still in development 6 months into the planning period (it happens all the time).


Using the word ‘ongoing’ instead of a target date for lower level planning elements such as initiatives, tasks or actions is not a good idea.  Firstly, ‘ongoing’ implies that nothing needs to change and secondly, that things will not change.  How likely is that?


Avoid the temptation to use ‘ongoing’ instead of a target date.  Rethink what you are trying to achieve, much better to replace a statement like “Continue to provide excellent customer service” with “Review level of customer service to ensure excellent levels of service are maintained”.  Of course measureable success indicators would also be good, but I have already covered that.


To finalise, planning for any organisation is important, even more so if the organisation is funded through the public purse and needs to be transparent and accountable in its decision making.  A little bit of ‘plan to plan’ thinking can go a long way to ensure the process is worthwhile.

Gary Bourke

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