Continuous Strategy Planning

A strategy is a plan of action or policy designed to achieve a certain aim over time. In the context of business, that aim should be the organisation’s mission.

To ensure that everyone knows what this is and to check that the organisation is on track, a number of measurable goals will be set, along with the way in which they are to be achieved and a set of financial targets to guide execution. These are typically covered in the organisation’s strategic plan.

To implement this plan, an operational plan is required that details the various activities and resources that should then deliver the set strategic goals.

There is nothing complex in this process. It is logical, makes sense and should be straightforward. But personal experience and various surveys show that this isn’t the case. In the Harvard Business Review article ‘Turning great strategy into great performance’, only 50 – 60% of the potential within a strategic plan is ever realised with the top reasons for failure being inadequate resources, poor communication, and actions required to execute not being clearly defined. It goes on to say that the cause of this failure is laid squarely on breakdowns in the planning and execution process.

So what’s going wrong and what can be done to put it right?

The Role of Technology

The first thing to point out that this is not really a technology problem. Organisations that have bad and failing planning processes will still have bad and failing processes after implementing the best of technologies. Technology is only an enabler. For systems to be of any value it has to enable the right planning culture. That culture will include:

• Planning and measuring the right things, in particular those activities that directly impact strategic goals.

• Direct linking of budgets to enable the successful implementation of strategic activities.

• Ensuring that people can clearly see and carry out their role in the execution of strategy. For this they will need tools to evaluate options, create contingency plans and be informed when things are not on track.

• Creating a planning and reporting process where individual activities are triggered by events and/or exceptions.

Moving towards continuous contingency planning.

Planning and reporting processes are particularly key. Most organisations would accept that today’s fast moving business environment, no longer fits in with annual planning, quarterly forecasting and monthly reporting – all of which were established in the 1920′s. However, continuous planning is far more than just doing the same old management processes only faster. It requires a different approach.

In today’s environment, strategy is all about options. The planning process is concerned with choosing the right combinations of activities with associated resources that can deliver set goals for a given business environment.

But each of these elements can vary quite quickly from what was planned. The business environment changes due to government action or market forces; resources may be inadequate for the task in hand; activities do not work or don’t get implemented fully; or an outcome occurs that was not as envisaged. In this changing environment, the plan needs to be revised – and quickly, or the mission will not be achieved.

It’s like driving towards a destination. On the way you may encounter diversions due to road works and delays caused by the environment or the actions of others. To make progress requires constantly adjusting the route – even temporarily changing the course of direction, but the destination or the goal remains the same.

To achieve strategic goals effectively in business requires the same approach. Organisations need to maintain a range of pre-planned options, along with the way in which resources are to be re-allocated, that deal with a variety of scenarios. One of these options will be adopted as the organisations current plan. It is important that all operational managers know about this planned environment as it gives the reason why the chosen activities were selected, and the role they play in carrying them out.

As the implementation of the plan progresses, it will need to be monitored not only for its intended outcomes but also whether the assumptions made about the environment, the resources required and the implementation of activities still hold true. (See my article on The Right Measures). If any of these are not as planned it could mean that future performance is under threat and it’s time to consider a change to the plan or introducing one of the pre-planned options.

Planning is a continuous, pro-active management tool. Make sure it counts and your organisation is prepared for the most likely of eventualities.

By Michael Coveney, EPM Contributor, from: http://www.stw-consulting.co.uk/Articles/280021/STW_Consulting/The_CPM_Blog/Processes/Continuous_Strategy_Planning.aspx

Michael Coveney has more than 35 years of experience in the financial analytic software industry, helping enterprises combine ‘best management practices’ with technology to improve the efficiency and effectiveness of their performance management processes.His energetic style and insightful views has led him to become a regular speaker at international events, a course leader with the Antwerp Management School, and the author of many articles and books including his latest ‘Strategy to the Max’ – a down to earth look at all you need to know in setting up systems that support the implementation of corporate strategy.