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Few companies have a strong strategic planning process that is well-supported across the organization.The companies that produce great strategy take a different approach. They treat strategic planning as a critical capability that can and should be world class. It is as much a reason for their success as continuous improvement is for a low-cost manufacturer or service excellence is for a high-end retailer. These companies have invested in the people, processes and tools that allow them to identify the most important strategic priorities and adjust as needed to remain sharp and relevant as conditions change. The process creates time for focused strategic debates, dials up the cadence of decision making, and engages the organization at all levels to both think strategically and translate strategy into action.
We help you find a best fit for your organization by reviewing your process using the following steps.
Step 1: Strategic planning and budgeting are both essential, but they are not the same thing
Too many companies conflate strategy and budgeting in a single process that muddies the discussion and turns priorities on their head. Instead of the smartest, most ambitious strategic ideas determining where the company should invest to support both today’s growth engine and tomorrow’s, the organization spends an inordinate amount of time debating math and updating budget targets, resulting in only incremental improvement each year. At the other end of the spectrum, the top leaders at some companies devise strategy in a bubble, coming up with big, lofty ideas that they never ground in operational reality.
Step 2: Strategy amplifies the voices of the front line and customers
Many planning processes default to “last year plus” when allocating resources across the organization. Planners spread investment around democratically, divvying up precious resources among every unit that has received an allocation in the past with little regard to real future potential. A winning strategy demands ruthless prioritization; satisfactory is not good enough. The planning process should be biased toward defining the company’s most critical future growth opportunities and purposely allocating the largest share of money, time and even talent against them.
Step 3: Resource allocation is purposely undemocratic
Many planning processes default to “last year plus” when allocating resources across the organization. Planners spread investment around democratically, divvying up precious resources among every unit that has received an allocation in the past with little regard to real future potential. A winning strategy demands ruthless prioritization; satisfactory is not good enough. The planning process should be biased toward defining the company’s most critical future growth opportunities and purposely allocating the largest share of money, time and even talent against them.
Step 4: Don’t let the earth’s rotation around the sun determine when you make decisions
Most strategic planning processes leave little opportunity for free-flowing debate outside of the annual planning window, which is typically highly formal and jam-packed with other priorities. Many important issues receive minimal airtime or never see the light of day. This tends to encourage a parallel, informal process in which leaders make many critical decisions ad hoc, influenced by those with the loudest voices—not necessarily those with the best ideas or the most critical priorities.Keeping pace with today’s dynamic markets requires breaking the stranglehold of the typical annual planning cycle.
Step 5: Leaders focus on the most important decisions and simplify the rest
How do companies create time for a regular cadence of strategic debate? They radically simplify the leadership agenda to exclude many of the “business as usual” issues that tend to drag strategic discussions into the weeds. That means empowering the finance function and business units to make decisions about budgeting and operational issues that are important but can be handled just as effectively by capable staff.
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