PMI reports that only 56% of strategic initiatives are successful, saying strategy execution is often to blame. The term “strategic initiatives” is frequently assigned to all kinds of projects, regardless of their alignment to strategy, shifting focus away from what is truly important to the business and straining resources. Harvard Business Review calls this “initiative overload,” recommending initiatives be much more calculated and always tied to a plan.
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But having too many initiatives is only part of the problem. In today’s dynamic environment, change and disruption are constant, often derailing even notable strategic initiatives. Internal and external forces require companies to become more resilient. The more agile the business, the more likely the initiatives will be executed successfully despite changes and disruptions.
According to Gartner, “A traditional strategy approach renders inefficient for organizations in a volatile business environment. Instead, executive leaders must use an adaptive strategy approach to respond to opportunities and threats.” Companies can succeed in developing and executing strategic initiatives that achieve strategic objectives; however, it requires a new approach – one that relies on direction from executive leadership and dynamic planning.
What Are Strategic Initiatives?
Strategic initiatives are a set of programs that will contribute to achieving specific strategic objectives. Unlike an idea or obscure goal, they set the direction on how the company ensures it remains competitive and responsive to change as it leverages opportunities to disrupt or dominate the market.
PMI places the onus on executives to define the mission and objectives, outline and communicate the strategic initiatives, then monitor the overall company performance. Strategic initiatives include programs with a set of outcomes to achieve initiatives and include:
- Success metrics
The purpose of strategic initiatives is first and foremost to achieve the corporate objectives, but they are multifaceted. If executed correctly, they should optimize return on investments and effect change, as well as close the gap between the program target or objective and current performance.
Strategic initiatives can define new opportunities to create new or improved products and services, new markets, and business operating model changes.
The key is to keep them flexible and responsive to change, something only dynamic planning can afford.
Instead of more rigid and intensive annual planning, dynamic planning enables businesses to handle change with less disruption, regularly revisiting strategic direction and appropriately adjusting strategic initiatives in response. For example, countless initiatives were paused when the country shut down due to the COVID-19 pandemic. More agile companies had the system in place to revisit their strategy and objectives and were able to reprioritize them and create new ones.
Where Strategic Initiatives Go Wrong
With so many strategic initiatives failing, there is clearly a disconnect between intentions and effective execution. Unless there is a concerted effort towards transformation, organizations continue down the same strategic execution process despite the dismal success metrics.
Evidence from Gartner, Harvard Business Review, PMI, and McKinsey points to at least six factors that contribute to strategic initiatives missing their mark:
- Initiatives remain elusive and aspirational without a roadmap for success.
- There is a siloed departmental focus versus working cross-functionally.
- Programs and projects are not aligned with strategy.
- Resources aren’t allocated for the initiatives or initiative overload leads to resource burnout.
- Improper prioritization, with business-as-usual work crowding out higher-value, strategic work.
- Changes and disruptions derail strategic initiative prioritization.
All hope is not lost, however. There has never been a better time for companies to reevaluate their strategic initiative process and pivot to a more sustainable, agile practice that leads to greater success. Organizations that are able to do so are more apt to not only withstand change and disruption but actually thrive in spite of it.
Setting the Stage for Dynamic Planning to Manage Changing Strategic Initiatives
Change is inevitable, yet the differentiating factor is how organizations respond to it. By establishing agility and a continual feedback loop process, change doesn’t have to cause significant disruption. Resilience requires executive buy-in and leadership, with an understanding that the reality of change can and must be managed.
Executives are in a position to lead the charge, establishing flexible strategic initiative prioritization and obtaining a commitment from across the enterprise to align all programs and projects to strategy and objectives. And perhaps for the first time, leaders must embrace cross-team coordination.
Gartner is clear in its recommendation that companies focus on strategy execution as part of their strategic initiative overhaul. It reported that 68% of Boards see Strategic Execution Monitoring as a top priority over the next 12 months, recognizing there are more complex, organization-wide initiatives than there were three years ago.
Further, companies should “leverage strategy’s capability to boost execution.” To succeed in execution today, Garter says strategists must:
- Deepen managers’ cross-silo connections to improve coordination
- Build scalable approaches to in-flight decision support so managers have the tools to navigate unexpected events
- Enable frontline managers to orchestrate effective pivots
Leaders must be able to align execution efforts to strategy. Centralized program management will support cross-team coordination and provide visibility into interdependencies and program success metrics. With stakeholders collaborating, sharing data, understanding impacts of their own decisions, and measuring performance as it relates to achieving strategic objectives, the organization will see greater success in their strategic execution.
Six Steps to Develop a Strategic Initiative Plan through Dynamic Planning
Creating a strategic initiative plan can seem daunting, but dynamic planning will foster the following steps in developing a plan that executives can champion:
- Understand or define corporate objectives.
- Evaluate the current strategic portfolio with a SWOT analysis.
- Set program goals and objectives that deliver outcomes to achieve the objectives.
- Plan the strategy by mapping outcomes that will achieve the strategic plan.
- Establish and monitor success metrics.
- Create a feedback loop by revisiting and adapting initiatives based on lessons learned, performance metrics, and change.
Dynamic planning is a shift for many organizations that are accustomed to annual or bi-annual planning, but it is worth the effort. Because change is so prevalent, static planning cannot keep up.
Companies must be able to adapt to change quickly. If strategic plans are inflexible, change inevitably wreaks havoc because priorities must shift within a system that doesn’t support change. Outcomes predictably suffer.
With dynamic planning, organizations are able to pivot when change happens, when priorities change, or when disruptions require adjustments.
Strategic Initiatives, Change and Program Management
Successful strategic initiatives require a structured approach to program management. PMI defines strategic initiatives as the projects and programs whose goal is to change the business and reports successful organizations lead change by managing their projects and programs effectively. They say, “companies are able to achieve the desired target state by the integration of program and change management.”
Program management provides a framework for organizations to have the right mechanism and governance to keep programs on target to achieve objectives, even as those objectives change. This is a critical component of successful strategic execution. PMI says 71% of projects and programs that are aligned to an organization’s strategy are completed successfully.
Effective initiatives are dependent upon effective program management because program management ensures teams are aligned with strategic initiatives and the corporate strategy.
Integrating Dynamic Planning into the Strategic Initiative Framework
For strategic initiatives to be successful, leaders must have processes in place to enable the business to adapt, pivot, and re-prioritize initiatives in response to change. Planning cannot be divorced from strategy; they go hand in hand. A plan without a strategy will rarely reach its intended outcome and with change a part of the business continuum, planning must embrace change.
Work must relate to strategy that aligns with strategic objectives and initiatives. Any strategic work that is outside of business-as-usual efforts must have a parent objective or it is either killed or restructured to achieve that alignment – and work that was once aligned can suddenly be off-target when change happens, requiring a reassessment of priorities. Understanding this dependency helps organizations make decisions with confidence as there is now a benchmark by which to measure the viability of programs and projects.
It is important to keep in mind that strategic initiatives operationalize a strategic plan with real-time visibility into the portfolio.
With actionable information in hand, leaders can make faster decisions that maintain the integrity of the portfolio of investments.
Dynamic planning is the key to this adaptability in times of uncertainty and disruption. Resources are a key part of changing initiatives as they may need to be reallocated when change happens. Harvard Business Review reports that only 20% of managers are successful at effectively shifting people across business units to support strategic priorities, revealing the importance of keeping resources aligned with changing priorities.
Without dynamic planning as part of the strategic initiative planning process, companies will continue to risk a proactive response to changing priorities. Executives must have access to relevant data quickly to make informed decisions, get everyone on board, realign funding and resources, and execute the strategy.
The Value and Features of Dynamic Planning
Dynamic planning enables the agility to adjust plans and shift priorities in response to change and disruption. It ensures the strategy is continuously linked to delivery and provides actionable data to inform decisions on how best to shift priorities and resources. Its very nature allows for change and provides the ideal framework to manage change with less risk.
Dynamic planning provides visibility into strategic initiative alignment to targets across the portfolio. It offers scenario planning with modeling, trade-offs, and impact assessment. Flexible funding models make it easier to shift funds as new insights are learned, with comprehensive financial transparency to compare investments on multiple levels.
This type of flexible planning presents work status and pipeline details for leaders to better understand the interaction of resources. With alerts of cost overruns and dependency conflicts, a strategy-to-delivery dashboard, and executive reporting, leaders can quickly identify risks and make decisions on where and how to pivot, with a full understanding of how their decisions impact the entire business.
With dynamic planning and strategic program management, executives can address questions with data-backed insights rather than gut feeling, the “squeaky wheel,” or the “peanut butter spread” approach. Questions such as:
- Should we hire more people?
- Can we afford this?
- Should we shift our timelines?
- Have we prioritized the right initiatives?
Answers to these questions do not require manual analysis of spreadsheets, nor do they ignore the initiatives and work of other business units. Instead, the organization is working together to solve challenges, seize opportunities, and grow the business.
Embracing Change as a Differentiator
While many organizations admit they have a long way to go in their change management efforts, those who are able to transform their business to be more agile to change have a competitive advantage. Establishing strategic initiatives to achieve corporate strategies and reach enterprise objectives is a valuable and necessary exercise, but unexpected disruptions and change are inevitable.
Enabling dynamic planning helps in times of change by making it acceptable to adapt strategic initiatives. In fact, it ensures the right initiatives are always prioritized with corporate objectives and gives leaders justification for shifting priorities when change happens. In doing so, organizations have confidence they are investing in the right programs and projects, and they have the right mix of resources working on the highest priority outcomes.
Organizations are realizing measurable benefits by implementing dynamic planning to manage changing initiatives, such as reduced investment waste on lower-value initiatives by anywhere from 10% to 50 %. Others have reduced cycle time to forecast and the time it takes to analyze the impacts of decisions from weeks to mere hours. By measuring and monitoring key initiatives, organizations have realized 25% more strategic benefit.
Change should not be the enemy and isn’t something to fear. Executives will play a pivotal role in not only implementing dynamic planning to enable successful strategic initiative planning, but in providing the tools and support required to empower the company to successfully execute strategies to achieve corporate objectives.