I'm always counting the number of days ahead. I've done this forever... from my first job as a junior expeditor in Purchasing to my years as CEO of large companies, to right now, when at Tufts, I'm counting the teaching sessions left before final presentations in December while I'm hyper aware of the deals yet to close at the firm before the end of November .
Even though I pride myself on the counting-days thing, it stung a little last week when my students, right after David Meerman Scott's terrific guest lecture on Wednesday, pointed out something I'd missed: Veterans Day moves my Wednesday's class to Tuesday. I technically knew that when I built the syllabus six months ago, but even after countless reviews, I still missed it, and spent an anxious couple of hours rearranging content and lecturers
Plans slip, even small ones, even when you're paying attention. That's the point of this morning's blog.
We've facilitated hundreds of planning sessions for a very wide swath of markets from tech to pianos to oil companies to hospitals to major city police departments to medtech, and it seems almost everything between. All exciting, very engaging and challenging since there shouldn't be anything "simple" about strategy, and more importantly, any strategic process needs to move everyone on the team to an actual personal commitment to tactics and timelines in the short term, or it's a waste of everyone's time.
We've been in the strategic planning business for 30 years, with hundreds of small, mid-size and large companies. Three failure patterns show up again and again:
McKinsey's research says we're not alone. In a survey of nearly 800 executives, only 45% were satisfied with their strategic planning process, and just 23% said major strategic decisions were actually made during the process. More than a quarter said their plans had no execution path at all.
The expense commitments tell the same story. When McKinsey studied 1,616 US companies over 15 years, a third of business units received almost exactly the same capital as the year before. That's simply last year's budget, plus or minus a few percent, dressed up as a strategy.
McKinsey's Chris Bradley and his colleagues have a name for what comes out of that process: "The Hockey Stick". The plan shows a dip next year, then a sharp breakout. When the breakout doesn't come, the team just draws a new hockey stick the following year. One company they studied drew a fresh one every year. If
you've sat through a few planning and even board meetings, you've seen it.
A few years back, a Harvard Business Review headline grabbed my attention, and it’s stuck with me ever since: “Only 8% of Leaders Are Good at Both Strategy and Execution.” From their survey of nearly 700 executives:
“Only 16% of top leaders were rated very effective at either strategy or execution. Only 8% were very effective at both, while 63% were rated neutral or worse on at least one dimension.”
The good news they pointed out is that more than half of the leaders who are strong at one are strong at both. Get better at strategy, and you'll probably get better at execution, and vice versa.
That one article sent me back to assess the beginning work of where we started with our own strategy customers over the past ten years. I sorted each management team, subjectively, into one of three groups:
Our experience is that the very best management teams spend about 150 hours a year actively involved in discussion and working on their strategic process .
1. Be consistent and develop your own planning rhythm.
The idea of conducting just one annual strategy session died ten years ago. Simply don't spend your time or any money on “our annual planning session,” and don't pretend that it's worthwhile if all you’re going to do is come together for a couple of days at some hotel and discuss ideas but not make the tough decisions and take action with definitive timelines. If 2027 is the time that you are going to change prior strategies, it’s impossible to force major decisions into one meeting. More likely, that will take two to three successive meetings.
Senior managers want steady involvement in the bigger picture. Without a formal way to follow up and ask “What happened? How did we measure up? How could we have improved? What worked and what didn't? …everyone actually feels cheated, and then they get disillusioned: “Why waste my time again?”
For 2027, commit to one two-day offsite plus three or four one-day quarterly reviews. Use the reviews to assess, adjust, and openly argue through decisions: add more gas to a strategy that's working, or kill one you previously agreed on and move on.
McKinsey is now saying the same thing. Carolyn Dewar, who leads the firm's global CEO Practice, argued this June that leaders should replace annual planning and three-year roadmaps with ongoing strategic debate and regular testing of assumptions. Her opening question makes a great first slide for your offsite: “If we were building this business today, where would we choose to compete, and how would we win?”
2. Spend your time on the top line and invest money to back it.
I'll assume everyone on the leadership team already knows about smart revenue and pays serious attention to gross profit and net income. This year, with sharply higher costs and continuing political turmoil, everyone has become experts at cutting expenses, conserving cash and, too often, delaying decisions. As a result, decision making has too often become “We’ll bring this up again at our next meeting.” The questions for 2027 need to be “Where are we going to invest?” Product? Sales? Marketing? Operations?
Then put money where the plan is pointing you. In the same McKinsey study, the companies that reallocated the most earned about 30% higher annual returns to shareholders than the ones that reallocated the least. They moved an average of 56% of their capital across business units over 15 years. One caution from the data: over periods shorter than three years, the big reallocators did worse. Strategic planning is a steady discipline, not a one-year lurch.
A good question for the room: What are we funding in 2027 only because we funded it in 2026?
3. Inoculate your culture into your company's DNA.
Everyone talks about culture. Some companies, both emerging and enterprise-level, have fully included theirs as part of the operating DNA of the business. “Built on Trust” is the culture of one of our best performing customers. It's their rallying cry, the sign on the door, the logo on their gear, and the first filter for every customer and employee decision they make. Add to that, they are never satisfied, and they commonly use the expression “We run to the fire” when a customer needs attention providing them with exceptional results.
4. Pick a future point and back into today.
Whether that point is December 2027 or December 2028 matters less than you'd think. The horizon should reflect how stable and how fast-growing your company is right now. In a flat or shrinking business, it might be a tightly managed four quarters. In a moderate-growth company, one to two years is right, with consistent quarterly reviews built in. Unless you are in a highly regulated business, forget about five-year plans.
In every case, pick the horizon, make sure everyone is bought into it, define the primary objectives you must hit by then, and back into today with objectives and tactics.
Then comes the tough part: agreeing on the three or four strategies that will deliver the biggest growth for the buck, while building the tactical battle plans that connect to them. Just as important, make firm decisions about which strategies you will not pursue.
McKinsey's data shows why that focus matters. For a company in the middle of the pack, the odds of reaching the top fifth of its peers within ten years are about 1 in 12. Companies that relentlessly pursue three “big moves” persistently raise those odds to nearly 1 in 2. And before you commit, test your assumptions with customers: in the same research, 80% of executives believed their product beat the competition, but only 8% of their customers agreed.
5. Build the future team as a primary strategic investment
Maybe what you have today is your team for the next five years. Most probably, it isn't. Have open conversations with your senior team and your managers about succession, whatever their ages or their time in their current role. Like the best coaches, you need to develop clear plans for future draft picks and for what happens when someone ends up on injured reserve.
At one of your future planning sessions during 2027, have each senior manager present their own succession plan, as if that person had been hit by the proverbial bus or were to win Saturday's Powerball. Done with enough depth, I guarantee the results will surprise you the first time.
This is where most plans fall short. In McKinsey's survey, only 36% of executives said their strategic planning was connected to their HR processes. Any strategy without detailed employee planning behind it is just a wish.
6. Take action on your personal health in 2027
You've heard this before: “Nothing counts more than your health.” And, as your mother might have said, most of us don’t pay enough attention to this... until something happens. For me, it was the July ATV accident caused by my one carelessness which left me totally out of action for two months.
Each of us has a strategic choice here. Many chronic diseases can be avoided completely or caught early and treated well. We live in an age of better cures, life-extending drugs, superb technologies and highly trained NPs and docs, so there's no reason to ignore this rule in 2027. Beyond your own well-being, poor health anywhere on your senior team has real consequences for the business.
Thanks for reading through this much longer than usual blog this morning, but solid planning both at the level of your overall business and within the complexity of creating highly functional sales processes is absolutely critical to your success next year, and the time is now in order to hit the ground running in January.
Have a great day planning to sell today!
Got a question of how sales processes are built and their ROI...just connect with me anytime.
Jack is a Managing Partner of Derby Management, a strategy consulting firm and he is the founder of the Derby Entrepreneurship Center at Tufts University, where he has been a professor for 20 years. Every semester in his marketing course, six teams of six students work directly with the senior managers of six companies over the period of 13 weeks building marketing plans customized to the objectives of management who provide 40% of the team grade.
At Derby Management, Jack and his team architect and build business strategies focused on sales and marketing processes, tools, and technology platforms.