2013 Strategic Leader Survey results 8-29-2013

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2 | P a g e © Forrest Consulting, 2013. Permission to reproduce this report is granted, so long as credit is given to Forrest Consulting.




EEXXEECCUUTTIIVVEE SSUUMMMMAARRYY

The 2013 Strategic Leader Survey digs into the use of strategic planning and plan

implementation by companies and other organizations to identify strategy development and

execution approaches that are working, as well as those that are problematic. Survey findings

are based on responses to our e-survey by 314 organizational leaders in decision-making roles.

Key findings from the strategic leaders' responses include:

60% report that a formal strategic planning process plays a "very significant" or "extremely

significant" role in developing their organization's strategy.

Almost 60% say strategic planning is "very important" or "extremely important" in the

success of their organization.

However, the glass remains little more than half full, looking at the lesser use of and less value

attributed to strategic planning in the other 40% or so of organizations. And 7% of leaders

report that their organization does not have a strategic plan.

Examining the link between use of strategic planning and value derived from strategic planning

shows that leaders whose organizations place more importance on the role of planning in

strategy development are more likely to say it is more important in organizational success.

Further, for their latest strategic plan, organizations whose leaders say planning has little

importance in organizational success were:

Much less likely to use strategic planning "best practices."

Less likely to consider global risks.

Less likely to consider global trends that offer major opportunities.

Yet, survey evidence suggests that using "best practices" and considering global risks and

opportunities are keys to deriving greater success through strategic planning. The 40% of

organizations that see little success from planning may see more success by using best strategic

planning practices and paying greater attention to risks and opportunities.

A final note on best practices: Even for those organizations whose leaders attribute success to

planning, use of best practices is highly inconsistent. All leaders are encouraged to revisit their

organization's planning practices as an avenue to achieving even better results from planning.

Lee Crumbaugh, SMP, President

Office 630-469-8088 Cell 630-730-9619

[email protected]

www.forrestconsult.com

www.strategicbusinessleader.com





For 25 years Forrest Consulting has promoted strategic thinking, planning and action. Our vision is "every

organization creates and is acting on a plan with strategies leading to a vision of greater success."

The case for strategic planning is compelling, yet, according to our prior research (which confirmed earlier

findings by McKinsey & Co.), three-quarters of organizations don't develop and implement strategies leading to

a shared vision of success. Much of leaders' time and focus is directed to daily operations and problem-solving.

Our 2012 Strategic Leader Survey focused on how to help leaders be more effective strategic managers.

The responses confirmed that leaders believe peer support, experienced counsel and expert knowledge can help

them think and act strategically and instill strategic planning and effective implementation in their organizations.

Our 2013 Strategic Leader Survey digs deeper into use of strategic planning and implementation in

companies and other organizations. Our aim is to identify strategy development and execution approaches that

are working, as well as those that are problematic. We are especially interested in assessing how leaders

evaluate strategic risks and opportunities and how this lines up with how their organizations approach planning.

Lee Crumbaugh, SMP, President

Office 630-469-8088 Cell 630-730-9619

[email protected]

www.forrestconsult.com

www,strategicbusinessleader.com


CONTENTS

THREE VITAL ASPECTS ............................................................................................................................... 5

TO START: MANY FIND PLANNING A SIGNIFICANT PROCESS ................................................ 6

THE PAYOFF: MANY FIND PLANNING IMPORTANT TO SUCCESS .......................................... 7

KEY QUESTIONS ABOUT THE OTHER 40 PERCENT ...................................................................... 8

MOST LEADERS FACE SIGNIFICANT STRATEGY CHALLENGES ................................................. 9

MORE FREQUENT STRATEGY DEVELOPMENT? ............................................................................ 10

PLANNING FOR MOST IS SIGNIFICANT AND IMPORTANT ..................................................... 11

THOSE THAT EMPHASIZE PLANNING FIND IT BRINGS SUCCESS ......................................... 12

USE OF BEST PRACTICES VARIES ......................................................................................................... 13

PLANNING PREPARATION: LOTS OF "DO IT YOURSELF"......................................................... 14

PLAN CREATION: NOT EVERYONE FINDS A VISION ................................................................. 15

PLANNED IMPLEMENTATION: WHY NOT HAVE A TIMELINE? ............................................... 16

ACTUAL IMPLEMENTATION: WHY NOT TRACK PROGRESS? ................................................ 17

POOR EXECUTION BY A SIZABLE SEGMENT ................................................................................. 18

THOSE WITH PLANNING SUCCESS FOCUS ON BEST PRACTICES ........................................ 19

LEADERS WANT THE NEXT PLAN TO CONSIDER THESE RISKS ............................................ 20

THOSE WITH PLANNING SUCCESS FOCUS MORE ON RISKS ................................................. 21

LEADERS SAY THESE TRENDS OFFER A MAJOR OPPORTUNITY ............................................ 22

THOSE WITH PLANNING SUCCESS FOCUS MORE ON TRENDS ........................................... 24

DO DIFFERENT ORGANIZATION TYPES PLAN DIFFERENTLY? ............................................... 25

WHERE TO GO FROM HERE ................................................................................................................. 26

APPENDIX 1: Additional Exhibits ............................................................................................................ 27

APPENDIX II: Response Analysis and Respondents' Characteristics .............................................. 41


TTHHRREEEE VVIITTAALL AASSPPEECCTTSS

To better understand the prevalence and use of strategic planning and its effectiveness, the

2013 Strategic Leader Survey focuses on three vital aspects of planning and implementation:

1. The extent to which leaders report their organizations engage in strategy development,

value use of strategic planning for strategy setting, and attribute success to use of

planning.

2. The practices strategic leaders report using in their organizations for planning

preparation, plan creation and plan implementation - and the sufficiency and rigor of

these practices.

3. Important external factors that strategic leaders believe their organizations need to

consider in creating its next strategic plan.


TTOO SSTTAARRTT:: MMAANNYY FFIINNDD PPLLAANNNNIINNGG AA SSIIGGNNIIFFIICCAANNTT PPRROOCCEESSSS

A prime question asked

in the 2013 Strategic

Leader Survey is the

extent to which

organizations find formal

strategic planning a

significant process to

develop their strategy.

The baseline finding from

this survey, echoing

results of other surveys

including our 2012

Strategic Leader

Survey, is that 60% of

leaders report that a

formal strategic

planning process plays

a "very significant" or

"extremely significant"

role in developing

their organization's

strategy.

6.8%

3.2%

6.8%

23.4%

35.6%

24.1%

0.0% 10.0% 20.0% 30.0% 40.0%

Don't Have A Formal Strategic Plan

Not At All Significant

Slightly Significant

Somewhat Significant

Very Significant

Extremely Significant

Role that a formal strategic planning process plays in developing the

organization's strategy


TTHHEE PPAAYYOOFFFF:: MMAANNYY FFIINNDD PPLLAANNNNIINNGG IIMMPPOORRTTAANNTT TTOO SSUUCCCCEESSSS

Another prime question

asked in the 2013

Strategic Leader

Survey is to what extent

leaders attribute the

success of their

organization to use

of strategic planning.

That question leads to the

second baseline finding,

which is that just under

60% of leaders say

strategic planning is

very or extremely

important in the

success of their

organization.

0.8%

10.4%

30.8%

42.9%

15.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

Not At All Important

Slightly Important

Moderately Important

Very Important

Extremely Important

Importance of strategic planning in the success of the organization


KKEEYY QQUUEESSTTIIOONNSS AABBOOUUTT TTHHEE OOTTHHEERR 4400 PPEERRCCEENNTT

That six of every 10 leaders place high value on strategic planning in organizational success is

an important and positive finding. But we cannot ignore the fact that the glass remains

little more than half full when it comes to reported use of and value attributed to

strategic planning. This lack of unanimity regarding the use and value of strategic planning

raises key questions:

In what way, if at all, do organizations for which strategic planning plays a less

significant role in strategy development engage in strategic planning? Is how they

use planning why it is less significant in their development of strategy?

Are the organizations whose leaders see strategic planning contributing little or

nothing to the success of the organization using strategic planning "best practices"?

Might lack of use of "best practices" in planning be a prime reason why strategic

planning does not contribute to the success of these organizations?

Evidence to answer these key questions emerges from the 2013 Strategic Leader Survey

results. But before considering differences in planning usage and acceptance, we need to

acknowledge both a common view of the strategy-related challenges faced by strategic leaders

and the general acceptance by leaders of strategy development as an organizational imperative.


MMOOSSTT LLEEAADDEERRSS FFAACCEE SSIIGGNNIIFFIICCAANNTT SSTTRRAATTEEGGYY CCHHAALLLLEENNGGEESS

Prior to asking about strategy making and implementation processes, the leaders were asked

which of any of five strategy challenges they found to be significant for their organizations.

Only 10% of leaders said none of the challenges were significant.

90% identified at least one challenge as significant; the share of leaders that found each

of the challenges significant were closely distributed in a range of 32% to 42%, and the

typical leader identified two of the challenges as significant.

As the chart shows,

the challenge most

frequently identified

as significant was

"Allocating resources

in a way that really

supports the strategy," and was closely

followed by "Setting a

clear and differentiating

strategy" and "Ensuring

day-to-day decisions are

in line with the strategy."

These problematic

strategy challenges cover

strategy creation through

implementation. The

prevalence with which

leaders encounter

these challenges suggests

that the planning and

implementation processes

most organizations use fall

short in significant ways.

37.9%

31.8%

36.1%

42.1%

33.2%

9.6%

0.0% 10.0% 20.0% 30.0% 40.0%

Setting a clear and differentiating strategy

Communicating the strategy and getting buy-in for it

Ensuring day-to-day decisions are in line with the strategy

Allocating resources in a way that really supports the strategy

Quickly translating strategic and operational decisions into action

None of the above

Significant challenges for organization's leaders


MMOORREE FFRREEQQUUEENNTT SSTTRRAATTEEGGYY DDEEVVEELLOOPPMMEENNTT??

We tend to think of strategy development as an annual process leading to budgeting. Yet the

2013 Strategic Leader Survey results suggest many organizations develop strategy

more frequently than annually. Further, many leaders want even more frequent strategy

development than practiced by their organization.

54% of

organizations

develop strategy

more often than

annually; 73% of

leaders believe

strategy should

be developed

more often than

annually if not on

an on-going basis.

39% develop

strategy "on an

on-going basis";

55% of leaders

believe strategy

should be

developed "on

an on-going basis."

15% of organizations develop strategy "more than once per year"; 18% of leaders

believe strategy should be developed "more than once per year."

Of course, saying the organization develops or should develop strategy frequently or

continually does not address the sufficiency of the strategy development process, nor the

effectiveness of the strategies developed.

39.2%

14.6%

24.2%

6.1%

5.0%

4.6%

6.4%

55.0%

18.4%

16.7%

6.0%

0.7%

0.7%

2.5%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

On an on-going basis

More than once per year

Annually

Every 2-3 years

Every 4-5 years

Less than every 5 years

Other or don't know

Frequency of strategy development How often the organization engages in organizational strategy development

How often leaders believe the organization should engage in organizational strategy development


PPLLAANNNNIINNGG FFOORR MMOOSSTT IISS SSIIGGNNIIFFIICCAANNTT AANNDD IIMMPPOORRTTAANNTT

As stated earlier, the

2013 Strategic Leader

Survey asked about the

role that formal strategic

planning plays in

developing the

organization's strategy.

The red bar on the chart

shows leaders' weighted

average rating of the

significance that a formal

strategic planning

process plays in

developing their

organization's strategy.

The rating, on a 1-5 scale,

with 1 being "not at all

significant" and 5 being

"extremely significant,"

is 3.8, close to "very

significant."

Of course, also as stated earlier, this overall rating masks the flip side, that for 40% of leaders'

organizations strategic planning does not play a very significant role in strategy development.

And, notably, 7% of leaders report that their organization does not have a strategic plan.

The blue bar on the chart shows leaders' weighted average rating of the importance of

strategic planning in the success of their organization. The rating, on a 1-5 scale, with 1 being

"not at all import" and 5 being "extremely important," is 3.8, about halfway between

"moderately important" and "very important."

However, again, the flip side is that for just over 40% of leaders strategic planning is not

viewed as having high importance in their organization's success.

3.8 3.6

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Significance of planning in developing strategy: 1 = Not at all significant, 5 =

Extremely significant

Importance of planning in organization's success: 1 = Not at all important, 5 =

Extremely important

Weighted average rating on a 1-5 scale

Leader ratings of strategic planning 's significance in developing strategy

and its importance in the organization's success


TTHHOOSSEE TTHHAATT EEMMPPHHAASSIIZZEE PPLLAANNNNIINNGG FFIINNDD IITT BBRRIINNGGSS SSUUCCCCEESSSS

So what does the evidence say about the relationship between the leaders for whom planning

does not play an important role and those who attribute little value to planning in success?

This chart shows very clearly that leaders who place more significance on planning in

strategy development are the most likely to say it is more important in

organizational success. How highly leaders rate the significance of planning in their

organization directly corresponds with how highly they rate the importance of planning in the

success of their organization.

In fact, leaders who rate planning "not at all important" in success also rate it "not at all

significant in strategy development." And conversely, leaders who rate planning extremely

important in success also rate it close to "extremely significant" in strategy development."

Bottom line: Those who downplay the benefit of strategic planning are those who don't use

it to develop strategy.

1.0

2.5

3.4

4.0

4.7

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Not at all important

Slightly important

Moderately important

Very Important

Extremely important

Weighted average rating of

significance of planning in developing

strategy on a 1-5 scale: 1 = Not at

all significant, 5 = Extremely significant

Rating of the importance of planning in organizational success

Significance of strategic planning in developing organization's strategy, by leader rating of

importance of planning in organizational success


UUSSEE OOFF BBEESSTT PPRRAACCTTIICCEESS VVAARRIIEESS

Much of the 2013 Strategic Leader Survey focused on use of commonly accepted strategic

planning "best practices," as identified in the Association for Strategic Planning's Body of

Knowledge and other references. The survey investigated how leaders' organizations:

Prepare for strategic planning.

Create the strategic plan.

Plan to implement the strategic plan.

Actually implement the strategic plan.

Meaningful differences among organizations can be seen from the results of this investigation.

And these differences raise important questions about why more organizations do not use

best practices when they engage in strategic planning.


PPLLAANNNNIINNGG PPRREEPPAARRAATTIIOONN:: LLOOTTSS OOFF ""DDOO IITT YYOOUURRSSEELLFF""

The following chart shows how organizations prepared to develop their most recent strategic

plan. Especially notable findings are:

Three times

as many

organizations

used a strategic

planning

process that

they developed

than used one

developed

outside of the

organization.

Many proven

planning

processes exist:

Why use

home-grown

processes?

Are the processes

used rigorous,

proven, best of

class?

Only one in five organizations used an outside facilitator to lead their strategic planning

process. Why not more, given the proven benefits of using an outside facilitator?

Half of the organizations gathered pre-planning input from organizational stakeholders.

Why didn't the other half ask for stakeholder input up front?

44% of organizations developed pre-planning information on the external environment.

Why didn't the rest conduct an environmental scan of important trends and forecasts?

50.7%

43.7%

17.8%

54.6%

20.4%

39.4%

33.8%

23.4%

31.2%

0.0% 20.0% 40.0% 60.0%

Gathered pre-planning input from organization stakeholders

Developed pre-planning information on the external environment

Used a planning process primarily developed outside the organization

Used a planning process primarily developed inside the organization

Used an outside facilitator to lead the planning

Used an executive or Director to lead the planning

Formed a planning team of 8 or fewer individuals

Formed a planning team of more than 8 individuals

Included Directors, funders or other non-staff stakeholders on the planning team

How the organization prepared to develop its most recent strategic plan


PPLLAANN CCRREEAATTIIOONN:: NNOOTT EEVVEERRYYOONNEE FFIINNDDSS AA VVIISSIIOONN

At the most fundamental level, strategic planning can be distilled to acting based on the

organization's current situation to move to a better position. In common planning parlance,

this would be finding a shared vision of success; assessing strengths, weaknesses, opportunities

and threats; and developing strategies and action steps (tactics) to move toward the vision.

The following chart shows practices that leaders report their organizations used to

created its most recent strategic plan. Especially notable findings are:

Just over half of

the organizations

developed a

shared vision of

future success.

What did the others

aim at in their plan?

64% identified key

strategies to move

toward the vision.

If strategic planning

hinges on strategies,

then one must

conclude that a

third of the

organizations did

not truly engage in

strategic planning

to create what they

call their "most

recent strategic plan."

54% developed action steps for implementing each key strategy. An obvious conclusion:

Developing a strategy is meaningless if it is not implemented.

52.6%

40.8%

32.0%

64.5%

59.2%

41.7%

64.0%

54.0%

0.0% 20.0% 40.0% 60.0%

Developed a shared vision of future success for the organization

Developed a mission / purpose statement for the organization

Developed a statement of shared values for the organization

Identified the organization's strengths / opportunities

Identified the organization's weaknesses / threats

Identifed the strategic gaps versus the shared vision of future success

Developed key strategies to move toward the vision of future success

Developed specific action steps / tactics for implementing each key

strategy

How the organization created its most recent strategic plan


PPLLAANNNNEEDD IIMMPPLLEEMMEENNTTAATTIIOONN:: WWHHYY NNOOTT HHAAVVEE AA TTIIMMEELLIINNEE??

More questions about organizations' use of best practices in the execution of strategic planning

emerge when planned implementation steps and the actual steps that leaders report their

organizations took to implement their most recent strategic plan are examined. The following

exhibits detail planned and actual implement steps.

The chart shows practices that leaders report their organizations planned to use to implement

the most recent strategic plan. Especially notable findings are:

Six of every 10

organizations set

measurable

objectives for

plan tactics.

Why didn't the other

organizations set

measurable

objectives?

Likewise, six of

every 10

organizations set

a plan

implementation

timeline. Why

didn't the other

organizations set an

implementation

timeline?

Just over half of organizations reported on their planning progress and final plan to the

wider organization. Why didn't the other half build support for their plan by reporting on it?

71.8%

62.0%

60.7%

53.7%

41.2%

52.8%

0.0% 20.0% 40.0% 60.0% 80.0%

Assigned responsiblity for implementing plan tactics to individuals

Set measureable objectives for each plan tactic

Set an implement timeline

Included plan reporting, review and adjustment in the implementation plan

Included the next plan update / re-planning time in the implementation

plan

Reported on planning progress and final plan to wider organization

Implementation steps in the organization's most recent plan


AACCTTUUAALL IIMMPPLLEEMMEENNTTAATTIIOONN:: WWHHYY NNOOTT TTRRAACCKK PPRROOGGRREESSSS??

The next chart shows practices that leaders report their organizations actually used to

implement the most recent strategic plan. Especially notable findings are:

Nearly two-thirds

of organizations

tracked

performance

against

measurable

objectives. How

did the other

third assess plan

impact and

progress?

Just under half of

organizations

tracked

implementation

against a timeline.

Did the rest of the

organizations track

implementation

at all?

Only four in ten organizations reviewed and adjusted plan implementation at pre-set

points. Did the rest review and adjust plan implementation in any fashion?

64.3%

47.0%

16.9%

23.5%

39.4%

62.0%

42.3%

0.0% 20.0% 40.0% 60.0%

Tracked plan performance against measurable objectives

Tracked implementation against a pre-set timeline

Tied senior executive compensation to plan implementation

Tied senior executive compensation to plan performance

Reported regularly to the wider organization on plan implementation /

performance

Reported on plan performance to executive team at regular intervals

Reviewed and adjusted plan implementation at one or more pre-set

points

How the organization actually implemented its most recent plan


PPOOOORR EEXXEECCUUTTIIOONN BBYY AA SSIIZZAABBLLEE SSEEGGMMEENNTT

The next implementation chart contrasts planned and actual implementation steps and further

reinforces a picture of poor execution in strategic planning for as many as half of organizations:

While 60% of

organizations set

an implementation

timeline, only 47%

actually tracked

implementation

against a pre-set

timeline.

While 53%

reported to the

wider organization

on plan

development

progress and the

final plan, only

39% reported

regularly to the

wider organization

on plan

implementation

and performance.

While over half of organizations included plan reporting, review and adjustment in the

implementation plan, only 39% actually reviewed and adjusted plan implementation.

The one area where planned and actual implementation steps meshed was use of measurable

objectives: Just over 60% of organizations set measurable objectives for each plan tactic and

also tracked plan performance against measurable objectives.

60.7%

52.8%

53.7%

62.0%

47.0%

39.4%

42.3%

64.3%

0% 10% 20% 30% 40% 50% 60% 70%

Set an implement timeline / Tracked implmentation against a timeline

Reported on planning progress and final plan to wider organization / Reported regularly on plan implementation and performance to the wider organization

Included plan reporting, review and adjustment in the implementation plan /

Reviewed and adjusted plan implementation

Set measureable objectives for each plan tactic / Tracked plan performance

against measurable objectives

Organizations' planned and actual strategic plan implementation steps

Implementation step planned Implementation step taken


TTHHOOSSEE WWIITTHH PPLLAANNNNIINNGG SSUUCCCCEESSSS FFOOCCUUSS OONN BBEESSTT PPRRAACCTTIICCEESS

The final chart on implementation offers strong evidence that organizations whose leaders

say planning has little importance in organizational success are much less likely to

use planning "best practices." For the 11 planning practices listed, use in organizations

whose leaders rated planning "very important" to "extremely important" in organizational

success is at least 20 percentage points higher than use in organizations whose leaders rated

planning "not at all important" to "moderately important" in organizational success.

39%

36%

40%

34%

33%

50%

23%

28%

35%

41%

25%

70%

66%

65%

58%

56%

71%

44%

48%

55%

61%

45%

0% 20% 40% 60% 80%

Developed key strategies to move toward the vision

Set measureable objectives

Tracked plan performance against measurable objectives

Developed action steps to implement key strategies

Developed shared vision of future success

Assigned responsiblity for implementing to individuals

Included plan for next plan update in the plan

Conducted scan of external environment

Included plan reporting, review and adjustment in the plan

Reported on plan performance to executive team at regular intervals

Reviewed and adjusted plan implementation at one or more pre-set points

Major differences in use of planning "best practices" by leader rating of planning's importance in success

Use in organizations whose leaders rated planning "not at all important" to "moderately important" in organizational success

Use in organizations whose leaders rated planning "very important" to "extremely important" in organizational success


LLEEAADDEERRSS WWAANNTT TTHHEE NNEEXXTT PPLLAANN TTOO CCOONNSSIIDDEERR TTHHEESSEE RRIISSKKSS

Using a list of global risk factors identified by the Financial Times, the 2013 Strategic Leader

Survey asked leaders what they saw as the most important risks that their next strategic plan

should consider. Those named by at least a third of the leaders responding were:

Economic risks

(credit crunch,

market/price

volatility, recession,

inflation, etc.) -

named by 91% of

leaders.

Technological

change risks -

named by 60% of

leaders.

Political risks

(regulation,

protectionism,

government

policies, etc.) -

named by 51% of

leaders.

Interestingly, supply chain,

terrorism, data security,

intellectual property,

energy and resource

security, natural disasters

and infectious disease risks

all were named by less

than a quarter of the

respondents.

90.9%

60.3%

51.1%

24.7%

20.1%

19.2%

16.4%

8.7%

8.2%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

Economic Risks (credit crunch, market / price volatility, recession, inflation,

etc.)

Technological Change Risks

Political Risks (regulation, protectionism, government policies,

etc.)

Supply Chain Risks

Cyber-Terrorism / Data / Intellectual Property Theft Risks

Natural Catastrophe / Extreme Weather / Climate Change Risks

Energy / Resource Security Risks

Terrorism / War Risks

Pandemics /Infectious Disease Risks

Risks leaders think their organization should consider in next strategic plan


TTHHOOSSEE WWIITTHH PPLLAANNNNIINNGG SSUUCCCCEESSSS FFOOCCUUSS MMOORREE OONN RRIISSKKSS

When the leaders who identify risks that their organization should consider in its next plan are

separated by whether the leader believes strategic planning is important in organizational

success, a now-familiar pattern emerges.

As this chart shows, in every case a larger share of the leaders who attribute greater success

to planning think the risk should be considered in planning than do those who attribute lesser

success to planning.

70%

17%

35%

5%

8%

5%

14%

14%

46%

89%

26%

53%

9%

19%

9%

19%

19%

60%

0% 20% 40% 60% 80% 100%

Economic Risks

Supply Chain Risks

Political Risks

Terrorism / War Risks

Energy / Resource Security Risks

Pandemics / Infectious Disease Risks

Cyber-Terrorism / Data / Intellectual Property Theft Risks

Natural Catastrophe / Extreme Weather / Climate Change Risks

Technological Change Risks

Risks leaders think their organization should consider, by leader rating of planning's importance

Leaders who rated planning "not at all important" to "moderately important" in organizational success

Leaders who rated planning "very important" to "extremely important" in organizational success


LLEEAADDEERRSS SSAAYY TTHHEESSEE TTRREENNDDSS OOFFFFEERR AA MMAAJJOORR OOPPPPOORRTTUUNNIITTYY

The 2013 Strategic Leader Survey asked leaders about 30 global trends identified through

an environmental scan. They were asked which of the trends they thought offered a major

opportunity that their organization should consider when developing the next strategic plan.

The trends leaders thought most important ran the gamut: technology trends; transportation,

energy, agricultural trends; demographic/social trends; and structural/market trends. Seven

trends that more half of the leaders thought their organizations should consider were:

1. Green product and services ( including energy efficient products, appliances,

buildings, etc.).

2. Social media.

3. Growing senior population.

4. Smart phones, tables, mobile computing.

5. Public/private partnerships and collaborative philanthropy (involving funders,

business and government).

6. Renewable energy.

7. Growing Hispanic population.

Of course, what might be key trend for one type of organization - e.g. digital healthcare

information for healthcare organizations or aging infrastructure for construction companies -

may not be important for other organizations. Nonetheless, being aware of a wide range of

trends and factoring what seem to be most significant and opportunity laden into planning will

broaden the reach and scope of the planning and offer more opportunities to be considered.

All of the trends are presented in the following table. Those that a third or more of leaders

identified as offering a major opportunity that should be considered in planning are highlighted.


72.7%

65.3%

65.2%

57.9%

57.6%

54.7%

50.8%

48.2%

47.1%

42.6%

40.7%

39.0%

38.4%

31.3%

29.4%

27.8%

27.8%

20.9%

20.7%

19.8%

18.7%

18.7%

18.5%

16.2%

11.9%

10.7%

9.3%

6.9%

6.9%

3.7%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

Green Products/Services (energy efficiency, etc.)

Social Media

Growing Senior Population

Smart Phones, Tablets, Mobile Computing

Public/Private Partnerships, Collaborative Philanthropy

Renewable Energy

Growing Hispanic Population

Cloud Computing

Social Reputation Management

Data / Information Security

Aging Infrastructure

Mass Customization, Customer Co-Creation

Big Data, Analytical Tools, Modeling, Simulation

Water Conservation

Onshoring and In-sourcing

Personalized IT-based Education/Training

The New Local Movement

Content Curation

Electric Vehicles

Crowd Funding, Other Non-Bank Financing

High-Speed Rail

Organic Agriculture

Internet of Things

Digital Healthcare Information

Privitization of Space

Advanced Electrical Energy Storage

3-D Printing

Nanoscale Design of Materials

Robots and Smart Machines

Synthetic Biology and Metabolic Engineering

Trends that leaders think offer a major opportunity their organization should consider in its next plan

Consider in next plan?

Keep an eye on for growing opportunity?


TTHHOOSSEE WWIITTHH PPLLAANNNNIINNGG SSUUCCCCEESSSS FFOOCCUUSS MMOORREE OONN TTRREENNDDSS

Yet again, separating responses from leaders who attribute greater success from planning from

those who attribute lesser success from planning shows a greater likelihood for those who

attribute success to planning to identify global trends that they think should be considered in

their organization's next strategic plan. The chart below highlights the differences for the

highest ranked trends. (Comparative ratings for all trends are in Appendix I.)

54%

42%

41%

37%

40%

39%

34%

60%

58%

58%

49%

45%

44%

44%

0% 10% 20% 30% 40% 50% 60%

Social Media



Green Products and Services (including energy efficient equipment, appliances, buildings)

Public/Private Partnerships, Collaborative Philanthropy (involving funders, business and government)

Cloud Computing, Big Data, Analytical Tools, Modeling, Simulation


Highest ranked trends that leaders think their organization should consider in its next plan, by leader rating of planning's importance in success




DDOO DDIIFFFFEERREENNTT OORRGGAANNIIZZAATTIIOONN TTYYPPEESS PPLLAANN DDIIFFFFEERREENNTTLLYY??

One 2013 Strategic Leader

Survey aim was to spot

differences in planning by

type of organization:

for-profit, association,

non-profit and government.

Differences do emerge - but

with a caveat. In reviewing

the following summary of

major differences and the

related exhibits in

Appendix I, recognize that the sample size for all but for-profits is small, as the chart above

shows. Therefore, these observations are only suggestive, not conclusive:

For-profits seem more likely to develop strategy on an on-going basis; non-profits

and government entities seem more likely to develop strategy annually or less often.

For-profits seem more likely to attribute more significance to formal strategic

planning in their strategy development and associations seem least likely;

governmental entities seem to be split on formal strategic planning's significance.

For-profit leaders seem more likely to say strategic planning is of high importance in

organizational success; leaders of non-profits and government entities seem less

likely to say strategic planning is of high importance in organizational success.

For the latest strategic plan: For-profits seem more likely to have identified

opportunities and less likely to have used an outside facilitator and included non-staff

stakeholders on the team; Associations seem more likely to have gathered

stakeholder input, used a team of eight or fewer, included non-staff stakeholders on the

team, and developed a vision; and less likely to have developed a mission and identified

strengths; Non-profits seem less likely to have used an outside faciliator and identified

strengths; and Government entities seem more likely to have gathered stakeholder

input, used a planning process primarily developed within the organization, developed a

vision, developed a mission statement, and identified strengths and opportunities.

155

14

45

13 12

0 25 50 75

100 125 150 175

For-Profit (corporation, partnership,

etc.)

Association (501c6)

Non-Profit (501c3)

Government Other

Number of leaders completing survey, by type of organization


WWHHEERREE TTOO GGOO FFRROOMM HHEERREE

Among all the findings of the 2013 Strategic Leader Survey, these seem most compelling:

Leaders for whose organizations strategic planning plays a significant role in strategy

setting report that strategic planning plays an important role in organizational success.

The importance attributed to strategic planning in organizational success appears to

correlate with the organization's use of strategic planning "best practices" for preparing

to plan, plan creation and plan implementation, and with consideration of global risks

and opportunities that may make a difference in the organization's future success.

All organizations may find greater success through strategic planning with greater focus

on the use of "best practices" in planning.

Yet the results of the 2013 Strategic Leader Survey still leave us with questions:

Why does a significant segment of organizations underutilize strategic planning for

strategy setting and implementation and not value its significance as a process

Why does a significant segment of organizational leaders believe that strategic planning

is unimportant in organizational success?

Is the reason for not employing strategic planning and not believing it can bring success the

result of ignorance or cultural differences among leaders and organizations? Do the

environment in which leaders and organizations function and the incentives driving leaders and

organizations work against a planning mindset and approach?

Clearly, opportunities for and potential benefits from further research on strategic leaders' use

of and beliefs about strategic planning and planning implementation are large.

______________________________________________________________________

Forrest Consulting very much appreciates the 335 respondents from North America, Europe,

Australia, Asia, Africa and the Middle East who participated in our 2013 Strategic Leader Survey.

We are especially indebted to the 314 company and not-for-profit leaders in decision-making roles

who took the time to offer information on the use of strategic planning in their organizations and their

views on strategic planning's role in organizational success.

Two appendices follow, with additional exhibits of survey results, and analysis of response and

respondents' characteristics. We welcome your thoughts on this research.


______________________________________________________________________

AAPPPPEENNDDIIXX 11:: AAddddiittiioonnaall EExxhhiibbiittss

39.2%

14.6%

24.2%

6.1%

5.0%

4.6%

6.4%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%



Annually

Every 2-3 years

Every 4-5 years


Other or don't know

How often the organization engages in organizational strategy development

55.0%

18.4%

16.7%

6.0%

0.7%

0.7%

2.5%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%



Annually

Every 2-3 years

Every 4-5 years


Other or don't know

How often leaders believe organization should engage in organizational strategy development


42%

17%

26%

5%

1%

5%

5%

21%

21%

29%

7%

7%

0%

14%

27%

9%

29%

13%

13%

9%

0%

23%

8%

31%

15%

15%

8%

0%

33%

0%

25%

8%

8%

0%

25%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%



Annually

Every 2-3 years

Every 4-5 years


Other or Don't Know

Frequency of organizational strategy development by organization type

For Profit

Association

Non-Profit

Government

Other


Role that a formal strategic planning process plays in

developing the organization's strategy

2013 Strategic

Leader Survey

2012 Strategic

Leader Survey

2006 McKinsey

& Co. Survey

Average of

three surveys

Extremely

significant 24.1% 35.2% 14% 24%

Very significant 35.6% 33.3% 44% 38%

Somewhat

significant 23.4% 12.4% 29% 22%

Slightly

significant 6.8% 12.4% 10% 10%

Not at all

significant/

No plan

10.0% 6.7% 3% 7%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

Extremely significant

Very significant Somewhat significant

Slightly significant

Not at all significant

Role that a formal strategic planning process plays in developing the organization's strategy

2013 survey

2012 survey

2006 survey


8%

8%

17%

0%

33%

33%

8%

8%

8%

23%

8%

46%

4%

4%

4%

27%

44%

16%

7%

0%

0%

43%

43%

7%

9%

3%

6%

21%

34%

27%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Don't Have A Formal Strategic Plan

Not At All Significant

Slightly Significant

Somewhat Significant

Very Significant

Extremely Significant

Role a formal strategic planning process plays in developing strategy, by type of organization

For Profit

Association

Non-Profit

Government

Other


8%

0%

17%

8%

50%

17%

8%

0%

23%

23%

23%

23%

4%

0%

11%

42%

31%

11%

7%

0%

0%

43%

43%

7%

8%

1%

8%

23%

44%

15%

0% 10% 20% 30% 40% 50%

Did not rate

Not At All Important

Slightly Important

Somewhat Important

Very Important

Extremely Important

Leaders' rating of importance of strategic planning in organization's success, by type of organization

For Profit

Association

Non-Profit

Government

Other


Significance of strategic planning in developing organization's

strategy, by how respondent rated importance of planning

Rating of significance of

planning in developing

strategy by respondent

rating of importance of

planning in success:

1 - Not at all

significant

2 - Slightly

significant

3 - Somewhat

significant

4 - Very

significant

5- Extremely

significant

Weighted

average

rating

Not at all important 100% 0% 0% 0% 0% 1.0

Slightly important 18% 32% 41% 5% 5% 2.5

Moderately important 3% 5% 46% 37% 9% 3.4

Very Important 1% 4% 15% 53% 27% 4.0

Extremely important 0% 3% 0% 20% 77% 4.7

How organization prepared for planning in developing most recent

plan: Usage difference by rating of planning importance

Pre-planning

information used

Where planning

process primarily

developed Planning leader Planning team

Usage of preparation

practice by

respondent rating of

importance of

strategic planning in

success:

Stake-

holder

input

Scan of

external

environ-

ment Outside Inside

Outside

facilitator

Senior

executive

8 or

fewer

More

than 8

Non-

staff

stake-

holders

included

Usage by those

who rate planning

not at all

important to

moderately

important 40% 28% 16% 39% 21% 25% 29% 15% 22%

Usage by those

who rate planning

very to extremely

important 50% 48% 17% 55% 17% 44% 32% 27% 32%

Difference in usage 10% 20% 1% 17% -4% 19% 3% 12% 10%


How organization created most recent strategic plan: Usage

difference by rating of planning importance

Developed Identified Created

Usage of preparation

practice by


importance of

strategic planning in

success:

Shared

vision

Mission/

purpose

Shared

values Strengths Weaknesses

Strategic

gaps

Key

strategies

to move

toward

the vision

Action

steps to

implement

key

strategies

Usage by those

who rate planning

not at all

important to

moderately

important 33% 28% 21% 47% 44% 26% 39% 34%

Usage by those

who rate planning

very to extremely

important 56% 43% 35% 65% 59% 43% 70% 58%

Difference in usage 23% 15% 14% 18% 15% 17% 31% 24%

Implementation steps included in most recent strategic plan:

Difference in inclusion by rating of planning importance

For each plan tactic Included in implementation plan

Reported on

planning

progress

and final

plan to

wider

organization

Inclusion of

implementation step by


importance of strategic

planning in success:

Assigned

responsibility

for

implementing

to individuals

Set

measureable

objectives

Implement

timeline

Plan

reporting,

review and

adjustment

Next

plan

update

Inclusion by those who

rate planning not at all

important to

moderately important 50% 36% 43% 35% 23% 36%

Inclusion by those who

rate planning very to

extremely important 71% 66% 60% 55% 44% 52%

Difference in inclusion 21% 30% 17% 20% 21% 16%


How actually implemented most recent plan: Difference in

implementation by rating of planning importance

Tracking

Senior executive

compensation

Reporting on plan implementation

and performance, and review and

adjustment of implementation

Usage of

implementation

step by

respondent

rating of

importance of

strategic

planning in

success:

Plan

perform-

ance

against

measurable

objectives

Implement-

ation

against

pre-set

timeline

Tied to

plan

implement-

ation

Tied to

plan

perform-

ance

Reported

regularly to

the wider

organization

Reported

to

executive

team at

regular

intervals

Reviewed

and

adjusted

at one or

more

pre-set

points

Usage by those

who rate

planning not at

all important

to moderately

important 40% 31% 9% 10% 27% 41% 25%

Usage by those

who rate

planning very

to extremely

important 65% 46% 19% 27% 40% 61% 45% Difference in

usage 25% 15% 10% 17% 13% 20% 20%


17%

25%

42%

50%

33%

42%

58%

50%

42%

31%

23%

69%

62%

38%

69%

69%

69%

54%

38%

29%

42%

42%

24%

44%

44%

44%

38%

64%

57%

71%

36%

36%

64%

43%

43%

29%

21%

30%

42%

50%

12%

43%

61%

55%

35%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Include Directors, funders or other non-staff stakeholders on the planning team

Form a planning team of 8 or fewer individuals

Gather pre-planning input from organization stakeholders

Use a planning process primarily developed inside the organization

Use an outside facilitator to lead the planning

Develop a shared vision of future success for the organization

Identify the organization's strengths

Identify the organization's opportunities

Develop a mission/purpose statement for the organization

Planning practices with greatest differences in use, by type of organization

For Profit

Association

Non-Profit

Government

Other


65.3%

57.9%

48.2%

42.6%

38.4%

27.8%

18.5%

16.2%

10.7%

9.3%

6.9%

6.9%

3.7%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

Social Media


Cloud Computing


Big Data, Analytical Tools, Modeling, Simulation

Personalized IT-based Approaches to Education and Training

Internet of Things



3-D Printing

Nanoscale Design of Materials



Technology trends offering a major opportunity that leaders think the organization should

consider in its next strategic plan


39%

28%

27%

14%

18%

54%

4%

6%

42%

10%

8%

1%

44%

37%

44%

15%

30%

60%

11%

6%

58%

22%

9%

4%

0% 10% 20% 30% 40% 50% 60%

Cloud Computing, Big Data, Analytical Tools, Modeling, Simulation

Big Data, Analytical Tools, Modelling, Simulation



Personalized IT-based Approaches to Education and Training

Social Media

3-D Printing



Internet of Things



Technology trends that leaders think the organization should consider, by leader rating of

planning's importance in success




72.7%

54.7%

40.7%

31.3%

20.7%

18.7%

18.7%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%


Renewable Energy


Water Conservation

Electric Vehicles

High-Speed Rail

Organic Agriculture

Transportation, energy and agricultural trends offering a major opportunity that leaders think the organization should consider in its next plan

7%

10%

17%

37%

9%

15%

31%

14%

14%

31%

49%

12%

22%

35%

0% 10% 20% 30% 40% 50%

High-Speed Rail

Electric Vehicles



Organic Agriculture

Water Conservation

Renewable Energy

Transportation, energy and agricultural trends leaders think the organization should consider, by leader rating of planning's importance in success




65.2%

50.8%

47.1%

27.8%

20.9%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%





Content Curation

Demographic/social trends offering a major opportunity that that leaders think the

organization should consider in its next plan

41%

34%

19%

17%

35%

58%

44%

24%

16%

38%

0% 10% 20% 30% 40% 50% 60%




Content Curation


Demographic/social trends leaders think the organization should consider, by leader rating of

planning's importance in success Leaders who rated planning "not at all important" to "moderately important" in organizational success



57.6%

39.0%

29.4%

19.8%

11.9%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

Public/Private Partnerships, Collaborative Philanthropy (involving funders, business and

government)

Mass Customization, Customer Co-Creation (enabling customers to "build their own" products)




Structural/market trends offering a major opportunity that leaders think the organization

should consider in its next strategic plan

17%

14%

40%

24%

6%

25%

15%

45%

32%

11%

0% 10% 20% 30% 40% 50%



Public/Private Partnerships, Collaborative Philanthropy (involving funders, business and

government)

Mass Customization, Customer Co-Creation (enabling customers to "build their own" products)


Structural/market trends leaders think the organization should consider, by leader rating of

planning's importance in success Leaders who rated planning "not at all important" to "moderately important" in organizational success



______________________________________________________________________

AAPPPPEENNDDIIXX IIII:: RReessppoonnssee AAnnaallyyssiiss aanndd RReessppoonnddeennttss'' CChhaarraacctteerriissttiiccss

Total initial respondents: 335

Respondents currently in leadership with decision-making role: 258

Respondents not now in leadership but responding about past role: 76

Respondents formerly in leadership with decision-making role: 56

Disqualified respondents not now or previously in leadership role: 20

Total qualified respondents: 314

Yes, 77.0%, 258 respondents

No, 23.0%, 77 respondents

In a leadership position with a decision-making role with a company,

association or not-for-profit


Yes, 73.7%, 56 respondents

No, 26.3%, 20 respondents (disqualified)

Not in a leadership position now, but have previously been in a leadership position with a

decision-making role

20.3%

22.6%

5.6%

14.1%

2.0%

3.6%

1.3%

1.0%

1.3%

11.2%

26.6%

5.3%

13.8%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

Manager

Owner

Partner

CEO

COO

CFO

CIO

CMO

Other C-level

VP

Director

Senior

Other

Level of position in the company/organization


34.0%

15.2%

14.8%

8.8%

7.1%

8.4%

3.4%

8.4%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

1-10

11-50

51-200

201-500

501-1000

1001-5000

5001-10000

10000+

Number of people employed by company/organization


66.2%

5.1%

19.6%

4.4%

4.7%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

For-Profit (corporation, partnership, etc.)

Association (501c6)

Non-Profit (501c3)

Government

Other

Organization type


1.0%

2.4%

0.0%

1.0%

2.7%

9.5%

1.4%

1.7%

3.4%

3.0%

4.1%

4.1%

9.5%

0.7%

13.5%

0.7%

20.6%

1.7%

3.7%

3.0%

1.7%

0.3%

1.4%

9.1%

0.0% 2.5% 5.0% 7.5% 10.0% 12.5% 15.0% 17.5% 20.0%

Accommodation / Food

Aerospace / Aviation / Automotive

Agriculture / Forestry / Fishing / Hunting

Arts / Entertainment / Recreation

Association

Banking / Finance / Insurance

Computers (Hardware, Software)

Construction

Education

Government / Military

Healthcare / Medical

Information (Publishing, Telecom, Video, Software, DP, Internet, etc.)

Manufacturing

Mining / Quarrying / Oil & Gas Extraction

Non-Profit

Pharmaceutical / Chemical

Professional / Technical Services (Accounting, Advert., Architecture, Consulting, Engineering, Legal, Marketing, etc.)

Research / Science / Biotechnology

Real Estate

Retail

Transportation / Distribution

Utilities

Wholesale

Other

Primary industry sector

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2013 Strategic Leader Survey results 8-29-2013

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