How to enhance your strategic planning process!
I am pretty certain that since we are in the second half of the year, all strategic planners will be huddled soon in conference rooms discussing the annual-strategic planning process. I am also certain that at the end of this process, most participants will either be clueless of what they need to do, or how, what they need to do impacts the overall strategic direction of the firm. Having said that, the importance of annual planning process cannot be undermined. It assists in defining budgets, targets, performance measures, etc. All elements that are relevant to both employees and employers.
So, what can be done to make the process more efficient and painless? In our experience, there are few steps that can be taken to improve the efficacy of the process itself, increasing the success rate of the strategic plan significantly, these are:
Begin with identifying issues: Strategic planning should be less about analysing rigid data, such as budgets and forecasts, and more about identifying the biggest challenges and noticing key trends. The first thing to do is to identify and discuss the strategic issues that will have the greatest impact on the performance of business. This ensures that the management is not wasting time discussing topics that are less important. As an example, a FMCG company identifies 10 strategic questions that need answering in their annual retreat, it then allocates these questions to business leaders who have 6 months to debate and come up with answers to each of these questions. And then they have a bi-annual retreat to discuss impacts and the possible course of action.
Extend your planning cycle to adapt to the need of business: One the biggest constraints of not being able to achieve the strategic priorities is bandwidth. Majority of the businesses do not need re-direction every quarter or annually. Additionally, most strategic issues/ priorities need about 18 to 36 months to resolve or implement. Hence, frequent strategic resets can be distracting and overwhelming. Businesses should learn to adapt strategic planning to their needs. Some companies have started to alternate the strategic planning process for their business units, requiring each unit to plan only once in 2 or 3 years. Other companies have started to use the trigger mechanism to define when which business unit undergoes the planning process.
Implement Strategic Performance Management (SPM): This we believe is the key to any successful efforts in implementing strategy or a strategic plan. A well-defined strategic performance management system links the overall direction a company wishes to take with individual performance. It assists by ensuring that an individuals’ actions are directly linked to the strategic priority for the company. Most metrics that need to be tracked for strategic planning/ direction are not financial or numbers driven, and hence, fall off the management’s radar. An SPM ensures that this does not happen, keeping all actions aligned towards common goals.
Though there are many other changes that are needed in a business’ strategic planning process, in our opinion, the above have been most successful and produced the fastest results. They ensure that teams are aligned and aware of their role in the strategic plan.