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Strategically Speaking: The Top 12 Strategic and Systems Thinking Mistakes—Mistake No. 2
December 11, 2008
"How you think…is how you plan…is how you act…and that determines the results you get in work and life."
By Stephen Haines
Problem No. 2: Thinking that planning and budgeting are a yearly ritual
Best Practice: A cascade of strategic and annual planning and budgeting, leading to real change and accountability. To do this, core strategies are the third shared common document for successful implementation.
Many organizations do annual planning and budgeting as a yearly ritual. It is not that this is wrong, just that it is necessary but not sufficient for success. Organizations may often do a strategic plan that is multiyear in nature. However, they then develop silo-based departmental plans and budgets to carry out this holistic strategic plan. You need to change your organization from a functional silo oriented organization to a strategy oriented organization. This is THE fundamental problem that most organizations have. They have departments that are functionally and piecemeal rather than strategically and holistically oriented.
We all know organizations need a common vision and a common set of core values. However we have found through our research and practical applications of strategic and systems thinking that organizations also need a third shared document; shared core strategies, as the more practical way to get employees to understand how their job fits into the big picture. The big picture of a vision may be too big for many employees.
Now comes the task of cascading the planning and budgeting down throughout the entire organization. In regards to core strategies, the best way to do that is to eliminate all piecemeal departmental goal setting and replace it with every single department having the same goals: corporate wide Core Strategies.
Further (1) these Core Strategies should be one of the three components every employee is evaluated on their performance appraisal. The other two components that all employees should be evaluated are (2) on their adherence to the core values and (3) their self-development to learn, grow and become more effective.
The shared strategies are the business glue of the organization and the core values are the social glue! As Jay Galbreath has said, "most organizations usually have tomorrow's strategies, today's structures, and yesterday's people and rewards."
Society Example
This functional/piecemeal only orientation is a huge issue in the U.S. today. For instance, without a shared vision and set of common strategies that are comprehensive in nature, we will never solve illegal immigration. Once the shared vision is in place, strategies must be developed and shared across all the functional government organizations that will be implementing this vision. Not too much chance of that happening unless President-Elect Obama can get government departments working together.
Management Example:
We at the Haines Centre constantly hear about so-called silo organizations, including two in the past week; one in Canada and one in the U.S. The need to shift from a functional and silo based organization to a strategy-based organization was clear to their CEOs when we explained this difference and common mistake. In fact, we have seen only three organizations in 18 years who were doing this simple mental switch before we got there. However, 100 percent of our clients now use the Shared Core Strategies as the business glue and set of department goals for all departments; it is just common sense.
Editor's Note: For related knowledge and best practices, go to www.SystemsThinkingPress.com for items including:
Article: Leading Strategic Change (Code: ALSC)
Model: The Iceberg Theory of Change (Code: MEWC-01)
Assessment Instrument: Integrated Strategic Planning and Mgmt. (Code: IISM)
Source: State-of-the-Art Best Practices Report (Code: R-SOA-SST)
Systems Thinking Press, www.SystemsThinkingPress.com,
1420 Monitor Road, San Diego, CA 92110 • 619.275.6528
Stephen G. Haines (www.StephenHaines.com) is founder and CEO of the Haines Centre for Strategic Management: The World Leaders in Strategic Management: Powered by Systems Thinking (www.HainesCentre.com).
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