Seven reasons why strategic plans work—and seven reasons they fail

Morrissey Goodale outlines seven key features of successful and unsuccessful strategic plans for architecture/engineering firms

By Morrissey Goodale June 3, 2024
Courtesy: Brett Sayles, WTWH Media

Every architecture/engineering (AE) firm I work with these days is feeling the pressure of unprecedented challenges and opportunities. Whether it’s the astonishing acceleration of technological advancements, the ever-increasing list of client demands, the growing sophistication of the competition, or the increasingly complex regulatory environment, AE firms must be more strategic than ever to remain competitive. Without a holistic strategic plan, even the strongest firms risk falling behind, losing market share, and ultimately failing to meet their business objectives.

In this high-stakes environment, effective strategic planning is not just a best practice—it’s a necessity. It provides a roadmap for navigating the complexities of the market, ensuring that firms can capitalize on new technologies, meet evolving client demands, and comply with stringent regulations. Understanding the reasons why strategic plans succeed or fail is crucial for any AE firm looking to thrive in this dynamic landscape.

From my seat, here are seven reasons why strategic plans succeed and seven reasons they fail.

The plans that succeed:

  1. Have clear vision statements and goals. Successful strategic plans are anchored in clear visions and specific, measurable goals. Well-defined visions provide direction and purpose, while concrete goals offer targets to aim for. This clarity ensures that everyone in the firm understands its objectives and can align their efforts accordingly. Now, I get that financial performance is a result of balancing the learning and growth of employees with process improvements and market positioning, etc., but firms that aren’t afraid to get specific about revenue and profit targets—well, they tend to achieve more revenue growth and profitability. From what I can tell, it’s no coincidence.

  2. Include comprehensive market analysis. Effective strategic planning involves thorough market analysis. Firms that understand industry trends, competitor activities, and customer needs accurately identify opportunities and threats. This knowledge allows them to position themselves advantageously in the market, tailor their services to client demands, and stay ahead of competitors. If you are serious about expansion of markets, services, and/or geographies, you have to bring the outside world in to make grounded assessments and sound decisions.

  3. Invite all employees to participate at some level. Engaging as many people in the firm as possible in the planning process (e.g., all-employee survey, etc.) fosters a sense of ownership and commitment. While their insights and feedback enhance the plan’s relevance and feasibility, it’s even more important that they support and contribute to the plan’s success. If there is such a thing as a reasonable person, they don’t need to get everything on their wish list to buy in, but they do need to be listened to.

  4. Are flexible and adaptable. The ability to adapt to changing circumstances is a hallmark of a successful strategic plan. AE firms operate in dynamic environments where disruption has become the norm. Flexible plans that allow for adjustments enable firms to respond to new challenges and opportunities without deviating from their long-term goals. The world happens—that’s a nice way of saying “you-know-what happens”—and when it does, you better not be wearing lead shoes.

  5. Efficiently allocate resources. Allocating resources efficiently is critical for the execution of strategic plans. You need the requisite financial resources, human capital, and technological tools. Successful firms ensure that they have the necessary resources to implement their strategies effectively, which often involves prioritizing initiatives and making tough decisions about where to invest. They pay attention to the law of diminishing returns—set out to do three things, you’ll get them all done; set out to do five things, you’ll get one of them done; set out to do ten things, you’ll get none of them done.

  6. Include the monitoring and evaluation of performance. Regular monitoring and evaluation of progress are essential for strategic plans to succeed. Firms that set up key performance indicators (KPIs) and conduct periodic reviews track their progress and make necessary adjustments. This continuous feedback loop helps them identify what is working and what needs improvement, and it keeps the plan from becoming a “check-the-box” activity.

  7. Have leadership’s full commitment. Strong leadership is fundamental to the success of strategic plans. Leaders who are committed to the plan and working on the firm, not just in it, inspire and motivate their teams. They play a crucial role in communicating the vision, setting the tone, and driving the implementation. Their dedication ensures that the strategic plan remains a priority.

The plans that fail:

  1. Are overly ambitious or unrealistic. Strategic plans fail when firms set goals that are overly ambitious or unrealistic. While aiming high is important, goals must be achievable and grounded in reality. I’m all for stretch goals, but when the cognitive dissonance is simply too much, frustration, diminished morale, and a sense of failure results when targets are not met.

  2. Ignore internal weaknesses. Some executives refuse to look in the mirror for an honest assessment of their firms’ internal weaknesses. Whether it’s fragile egos, fear, or hubris, they don’t want to accept that every aspect of their firm isn’t simply spectacular. But ignoring issues such as skill gaps, inefficient processes, or cultural misalignments undermines the execution of the plan. An honest assessment of internal capabilities is crucial for realistic and effective planning.

  3. Botch communication. Poor communication is a significant barrier to the success of a strategic plan. When the plan is not effectively communicated to all members of the organization, misunderstandings and misalignments occur. Clear, consistent, and timely communication is necessary to ensure everyone is on the same page. Communication is not a nice-to-have—it’s a must-have.

  4. Avoid change. Change in our industry is often met with resistance, particularly in established firms with ingrained practices and cultures. Strategic plans that require moderate to significant change routinely fail when there is not enough buy-in from the team. Overcoming resistance through change management strategies (including being clear about what is NOT changing), training, and support is essential.

  5. Misinterpret risk. Failing to anticipate and manage risk often leads to the downfall of strategic plans. Risks can come from various sources, including economic downturns, regulatory changes, or technological disruptions. Firms that have been blindsided by unforeseen events often lack a reasonably robust risk management framework that takes into account how likely and impactful these risks are.

  6. Underestimate execution challenges. Crafting a strategic plan only gets you to the starting line; then you need to get your hands in the dough. Underestimating the complexities and obstacles involved in execution leads to front-end loading the plan with unrealistic amounts of work. Remember, you have day jobs.

  7. Misalign incentives. Misaligning incentives with strategic goals is a surefire way to torpedo a strategic plan. For instance, if employees are rewarded for short-term results rather than long-term strategic achievements, they may not prioritize the strategic plan. Aligning incentives with strategic objectives is crucial for ensuring everyone works toward the same goals.