In most organizations, strategic planning is not a process, but a negotiation that begins between financial executives and the individual business unit managers. The business unit managers typically focus on short-term plans due to their own annual compensation and bonus programs. These managers attempt to negotiate the most conservative operating plans that the financial executives are willing to approve. This politicking makes it easier for the operations managers to maximize their bonuses when the annual results exceed their understated short-term plans.

Immediately after the financial executives sign off on the short-term operating plans with the business unit managers, they must negotiate with the organization's owners or Board of Directors to establish the long term (beyond the current year) strategic plans. Financial executive's short-term job security improves when they acquiesce to the owner's political pressure to establish overly optimistic long-term strategic plans. Grossly overstated long-term plans that do not align with the annual operating plan cause a strategy gap before the organization even begins to consider how to execute their strategy.

Typically, annual budgets control spending for capital resources. Obviously, the overstated long-term financial plans cannot drive the conservative annual operating plans. Conversely, tightly controlled annual budgets will not support the lofty demands of the overstated long-term strategic plans. This politically driven disconnect further undermines the opportunity to hold anyone in the organization accountable. Rather than establishing a viable strategy, management has created a sizable strategy gap before execution is even considered, much less planned.