Are you basing your strategic plan on myths or facts?
If you build your strategic plan based on myths versus actual facts, you are guaranteed to have a plan that will fail to deliver on your future vision.
If it’s based on myths that the partners believe about the firm, strategies are developed to create a roadmap heading north when the actual facts about the firm clearly show the best strategic road heads south, and you are pretty much guaranteed to arrive at the wrong destination. In other words, the strategies you choose will not achieve your future vision.
Most firms begin their strategic planning journey with a SWOT (strengths, weaknesses, opportunities and threats) analysis. While the preparation of a SWOT analysis is common in the planning process, it is often prepared with little depth and barely scratches the surface relative to the facts about the firm today. The partners and firm leadership rely on the SWOT and move forward agreeing on strategies to achieve their long-term vision for the firm. The problem is that all too often, the SWOT “analysis” is simply a compendium of what people believe, versus a comprehensive and thorough analysis of what the firm’s SWOT truly reflects. The result is a strategic plan built on quicksand versus one that is built on solid rock.
How do myths get started and gain acceptance as the truth? Generally speaking, myths are created and become the “truth” for two key reasons:
1. The firm leadership accepts a myth rather than challenge it and seek the truth. Sometimes truth is uncomfortable and may require leadership to take actions they are not comfortable taking (i..e., compensation). Other times, the myth is more “acceptable” to the partner group (i..e., 'We provide great client service'). Regardless of the reason, it is leadership’s responsibility to challenge what they are being told or observe and ensure that the firm operates from the truth and not the myth.
2. Partners create myths based on their fear of reprisal if “the truth got out.” How many times are clients lost or file Chapter 11 and the partner is surprised about it? How many times does a partner say their client relationships are strong when, in fact, they are not? If the culture of the firm is based on finding blame, partners will always create the myth instead of facing the truth. Leadership loses, the partner loses, the firm loses.
When myths are created, constantly presented as truth and accepted by firm leadership, they become the truth.
What is the process for ensuring that the firm’s SWOT analysis is an accurate picture of the firm today? It’s difficult to rely on the output of a totally internally generated SWOT. Myths become truth and, if the myths form the reality in the collective mind of the firm, it’s very difficult for an internal team to challenge the myth. It is not an unwillingness to challenge, but why would an internal team challenge something that they themselves believe to be the truth? A quality consultant should be retained to perform the SWOT analysis. An external consultant will provide objectivity to the process, as well as the ability to challenge every myth without fear of reprisal. After all, the risk to the consultant is maybe not getting paid, versus the risk to an internal team, which can be significant.
Some myths present very little risk to the firm or to the strategic plan, such as a claim that the firm’s financial reporting is great when in fact it is average. The impact of this myth on the firm and the development of strategies is minimal, assuming the financials are accurate and just not transparent enough.
Now let’s say the myth is that the firm’s client relationships are strong. This myth can have a huge impact on the strategies that are developed. Let’s say we are now at the firm’s annual strategic retreat and the issue of growth leads to a lively discussion, and the key question becomes, "What strategies should the firm implement to achieve its long-term growth objective of X percent?"
After a lot of back and forth, the team decides on strategies to expand cross-selling and implementing a program based on asking clients for referrals to create new opportunities. Both strategies should be successful since the firm has such strong relationships with its clients, at least based on the myth. So, the partners leave the retreat confident in the two growth strategies. Fast forward a few years: Since the strategies were based on a myth, the success of both growth strategies will fall far short of what was expected, guaranteed.
The above scenario depicts a key strategic planning challenge — are you building your plan based on myths or facts? If your strategic plan is built on unchallenged myths, the strategies you develop will never achieve what you expect. Myths, whether promoted by the firm leader or the partners, are a construct based on rationalization versus a construct based on fact. As you are planning your next partner retreat or whatever venue your firm uses to develop its longer-term strategic plan, make the investment in time and money to make sure the SWOT analysis you rely on is a factual picture of the firm and not a compendium of fantasies.
It takes courage to challenge myths that have most likely existed for years. Firm leadership has the responsibility to ensure there is a factual assessment of the firm on an annual basis rather than allowing myths to continue. So many long-term strategy decisions, as well as short-term budget decisions, are made that must be based on facts and not myths. Sometimes clearing a myth results in some uncomfortable situations, but eliminating the myth will make the firm stronger.
The challenge for leadership is to have the courage to develop a strategic plan that creates a roadmap to exceptionalism, which can never be achieved if the strategic plan is built on myths. Eliminating myths and ensuring your SWOT is based on facts will result in a strategic plan that will be the roadmap to a future of exceptionalism.