Originally published on Forbes.com

Annual strategic planning for professional service firms is standard practice. But in my experience, after coaching more than 70 mid-sized professional service firms, it doesn’t work very well. The problem is that it rarely produces meaningful growth. It becomes a hamster wheel that service firms run on, full-well knowing that they’re not moving forward toward the goals that really matter.

If your service organization has struggled to grow, it could very well be that the problem is not your people, your commitment or even your resources (time, money, staff). The real problem could be your approach. If your organization really wants to grow, I’d like to recommend that you scrap annual strategic planning and instead adopt collective objectives. I’ve found this to be a far superior approach to solving hard business problems that yield real growth.

What’s wrong with annual strategic planning?

If your firm engages in annual strategic planning, I’ll bet it goes a lot like this:

• You get your leadership team together for a couple of days to talk about priorities.
• You review your previous year’s results and identify what you want to do better next year.
• You establish a short list of objectives you want to accomplish.
• People on the leadership team sign up for one of these and commit to an action plan.
• During quarterly meetings, people report on their progress. In the first quarter, things are going pretty well. By the second quarter, energy is waning and progress has stalled. By the fourth quarter, it’s clear the goals will not be achieved.
• You get together to plan the next year and everyone talks about how much they learned from their attempts to achieve the objectives and how much better positioned they are to actually achieve them this year.
• Rinse and repeat—year after year.

Why doesn’t this approach work? There are all sorts of reasons. But in my experience, the biggest problem is that already-busy executives with full-time jobs have to play the rugged individualist—trying to solve really complex business problems while holding down the fort.

Most people who end up on leadership teams in mid-sized service firms are department heads. This means they have departments to run: budgeting, personnel issues, scheduling, priority setting, communication, hiring and an endless list of meetings. That is their primary responsibility, and departments won’t run themselves. Most department heads I’ve coached already work 50 or more hours per week. How are they supposed to solve complex business problems when their day jobs already take all their time and energy?

If a leadership team has five people on it and they identify five annual strategic objectives and each person takes ownership for one objective, who do they brainstorm with when they run into obstacles? Every initiative I’ve ever seen runs into problems and blockades. Things rarely go according to plan. When the inevitable challenges arise, departmental demands and the absence of someone trusted to brainstorm with leaves an executive feeling like they’re all alone on an island. But it takes teamwork to make the dream work.

Consider a far better approach—collective objectives.

If what I’ve described above sounds familiar, I’d like to present an idea for changing your strategic planning approach. I call these collective objectives. Here’s how they work:

• Once a quarter, the leadership team gets together to talk about what’s most important right now. They ask themselves one simple question: What business problem must we absolutely solve before the end of this year?
• They pick one objective. Not two or three. One objective.
• As a team, they brainstorm their best ideas about how to achieve the objective.
• They translate their ideas into a Gantt chart with tasks for everyone on the leadership team. The division of duties here is crucial.
• For the coming 90 days, in whatever free time each executive has, they work on their tasks to get them done.
• They commit to reporting on the progress of their tasks in monthly meetings. These usually can be achieved in about an hour.
• If an executive runs into a blockade (and they always do), they can use either the monthly meeting to brainstorm with colleagues or they can set up a more informal time in between meetings.
• When they get together for their next quarterly meeting, if the goal has not been achieved, they do not pick a new one. Instead, they go back to the plan and refocus it on a new set of tasks that will achieve the objective.

Why is this approach superior?

I have found this way of handling strategic planning to be far more effective. Why?

• The objective becomes a team goal, not an individual goal. This means no one person is overwhelmed by the goal.
• A singular focus on a single objective greatly increases the likelihood that it will be achieved. This brings clarity and simplicity to everyone’s actions.
• Everyone on the leadership team knows what other members of the team are working on. This makes brainstorming so much more effective because everyone is familiar with the problem they’re trying to solve. There’s no ramp-up time.
• It greatly enhances accountability. No one wants to let the team down because they didn’t get their tasks done.
• It enhances camaraderie. It’s very motivating when you see a colleague experience a breakthrough on their set of tasks. It gives you confidence that you’ll do the same.
• It fosters healthy competition between leaders. I’ve seen leaders place bets about who’ll get their tasks done first—a bottle of wine going to the winner.
• The plan gets far more thoroughly vetted and refined. When you have five people brainstorming a specific problem and coming up with solutions, the quality of the ideas will be far better than if just one person came up with them.

One of the biggest benefits of collective objectives is the sense of teamwork it produces. It feels like everyone is pulling in the same direction and that can be very motivating. Give collective objectives a try, and I’ll bet you never go back.

About The Author

Randy Shattuck is a seasoned entrepreneur who works hand-in-hand with senior leaders of mid-size professional service firms to grow revenues, acquire clients, open new markets, increase profits and effectively position their brands.