The Strategic Planning Paradox
Every year, companies spend millions on strategic planning. They hire consultants, gather executives for offsites, and create beautiful PowerPoint presentations with ambitious goals. Yet according to research, 67% of strategic plans fail to deliver their intended results.
The problem isn't execution—it's that most strategic plans are built on assumptions that don't match reality. Here's how to apply Reality Check thinking to create strategies that actually work.
The Three Deadly Assumptions
Assumption 1: "If We Build It, They Will Come"
The problem: Most strategic plans assume that customers will automatically adopt your new products, services, or business models.
Reality: Customer behavior is notoriously difficult to predict. What people say they'll do and what they actually do are often completely different.
Example: A software company spent £2M developing a new feature based on customer surveys showing 80% interest. When launched, only 12% of customers actually used it.
Reality Check approach: Apply Question 1: "What evidence do we have that someone wants this?"
- Test assumptions with small experiments before full investment
- Look for behavioral evidence, not just stated preferences
- Validate with actual customer actions, not surveys
Assumption 2: "The Future Will Be Like the Past"
The problem: Strategic plans often extrapolate current trends into the future, assuming business conditions will remain stable.
Reality: The business environment is constantly changing. What worked yesterday may not work tomorrow.
Example: A retail chain's 5-year plan assumed continued growth in physical stores. The pandemic accelerated digital transformation, making their strategy obsolete within months.
Reality Check approach: Apply Question 2: "What surprised us this week?"
- Build scenarios for different possible futures
- Identify early warning signals that your assumptions are wrong
- Create plans that can adapt to changing conditions
Assumption 3: "We Can Control Everything"
The problem: Strategic plans often assume that success depends entirely on internal execution, ignoring external factors.
Reality: External factors—competition, regulation, economic conditions, technology changes—often have more impact than internal execution.
Example: A manufacturing company's strategic plan focused entirely on operational efficiency improvements. A new competitor with superior technology entered the market, making their efficiency gains irrelevant.
Reality Check approach: Apply Question 3: "What are we pretending not to know?"
- Identify external factors that could derail your strategy
- Build contingency plans for worst-case scenarios
- Monitor external threats as closely as internal metrics
Building Reality-Based Strategic Plans
The Reality Check Strategic Planning Process
Step 1: Evidence-Based Assumptions
Before creating your strategy, list every assumption you're making and find evidence to support or challenge each one.
Example assumptions to test:
- "Our customers will pay 20% more for this feature"
- "Competitors won't respond to our new product"
- "Technology costs will continue to decline"
- "Regulatory environment will remain stable"
Step 2: Scenario Planning
Create multiple scenarios for how the future might unfold, not just your preferred outcome.
Three scenarios to consider:
- Optimistic: Everything goes according to plan
- Realistic: Some things work, some don't
- Pessimistic: Major assumptions prove wrong
Step 3: Early Warning Systems
Identify specific signals that would indicate your strategy is failing or needs adjustment.
Warning signs to monitor:
- Customer adoption rates below projections
- Competitor responses that weren't anticipated
- Technology changes that affect your assumptions
- Economic or regulatory changes
Common Strategic Planning Failures
Failure 1: Planning for the Best Case
Most strategic plans assume everything will go right. They don't account for delays, setbacks, or external changes.
Reality Check solution: Build plans that work even if things go wrong.
- Add 25-50% buffers to timelines and budgets
- Identify critical path dependencies and backup plans
- Plan for resource constraints and competing priorities
Failure 2: Ignoring Competitive Response
Strategic plans often assume competitors will stand still while you execute your brilliant strategy.
Reality Check solution: Anticipate and plan for competitive responses.
- Analyze how competitors might react to your moves
- Build competitive advantages that are hard to copy
- Plan multiple strategic options, not just one
Failure 3: Confusing Strategy with Goals
Many "strategic plans" are just lists of goals without a coherent strategy for achieving them.
Reality Check solution: Distinguish between goals and strategy.
- Goals: What you want to achieve
- Strategy: How you'll achieve it
- Make sure your strategy actually leads to your goals
Implementing Reality-Based Strategic Planning
Monthly Strategy Reality Checks
Don't wait until the end of the year to review your strategy. Implement monthly reality check meetings:
Monthly agenda:
- What assumptions have been proven right or wrong?
- What external changes affect our strategy?
- Are we on track, or do we need to adjust?
- What early warning signals should we monitor?
Strategy Testing Framework
Before committing to a major strategic initiative, test your assumptions:
Pre-commitment tests:
- Run small experiments to validate key assumptions
- Get feedback from customers, not just internal stakeholders
- Test competitive responses with limited exposure
- Validate technology assumptions with prototypes
The Bottom Line
Strategic planning doesn't have to be a waste of time and money. By applying Reality Check thinking to your strategic process, you can create plans that:
- Are based on evidence, not wishful thinking
- Account for uncertainty and external factors
- Include early warning systems to detect problems
- Can adapt when reality doesn't match assumptions
Remember: A good strategy is one that works in the real world, not just on paper. The goal isn't to predict the future perfectly—it's to create a plan that can succeed even when your predictions are wrong.