Viewpoint on strategy: Successful Strategy and Scenario Planning. A more targeted approach to strategic planning requires a focus on creativity and less of established linear processes. Here are five pillars to follow in your strategy planning process. The steps will ensure your process is creative and reflects your business imperatives.
1. Customize the planning process to address your business outcomes
A combination of a data rich approach needs to be combined with measurable outcomes based on good-better-best scenarios. An emphasis on scenario planning will ensure expectations are met and resources required to achieve specific outcomes are assessed in realistic and comprehensive terms. The best approach to tap into scenario planning for strategy development is to adopt dynamic and outside-the-box thinking that is grounded in rigorous analysis. The approach will lead to measurable outputs. The planning process will be built on the underlying business imperatives and organizational structure that will be validated with data from each business unit, while ensuring a common strategic approach across businesses.
2. Leverage external practices and processes
Most organizations look at their past strategy plans to plan for the future. A more creative and impactful approach is to look at an external oriented path that taps in to best practices in specific strategic imperatives. This approach will inform a few scenarios that could lead to possible business outcomes. Each scenario must tap into a specific variable that sets it apart. This variable must influence a different outcome for the strategy plan. A comprehensive approach will need to look at data from all business influencers such as customers, sales channels, distribution, competitors while tapping into external data sources and advisors. A creative approach usually reveals potential surprises in each scenarios that may not have been considered in the past. The key to this methodology is to identify value drivers while managing the risk associated with each scenario. Frequent and formalized communication between various stakeholders in the planning process is critical. A strategy plan is as successful as the input received from the team that will deploy the plan. Arcus View from the Top research indicates that 85% of strategy plans fail at the deployment stage and deliver sub optimal returns. A process of robust exchange of information and ideas also invigorates the team and leads to a cohesive perspective on “what it will take” for the plan to succeed.
3. Build a sustainable outcome oriented culture
Poor outcome orientation is often a contributing factor to unsuccessful strategic planning and weak performance management. Creating a cycle orientation to performance management, developing reasonable and stretch goals that are measured, monitored and embedded in business processes are most likely to lead to achievement of goals. A key approach that has led to performance based strategic plans is to embed key performance indicators (KPIs) in processes and increase the frequency of reporting on these KPIs. Often strategy planning is an activity that is visited at the beginning and end of a financial year. This results in a lack of monitoring and required adjustments to the strategy plan during the year. The outcomes are likely to have a higher degree of certainty if there is a process in place to incorporate changes in the external environment in the planning process. A quarterly review is adequate to start the process. Adjusting and adapting the plan at the end of each quarter can deliver the desired outcomes.
4. Integrate the performance plan into a performance culture
To execute successfully, organizations need to translate the performance plan into aperformance culture. The culture will need to be inclusive and should empower all employees in the planning process. This will ensure that the capacity and capability of the organization to manage change is enhanced. The biggest challenge some organizations face is translating the strategy plan into tangible goals at the business unit level with tactical, operational, and day-to-day execution of the plans. Arcus research shows that an organization’s performance is directly influenced by who makes decisions, how fast information flows, what motivates employees and how employees communicate across levels. The critical drivers of performance at the front end of a strategy plan are decisions and information. A seamless process is strengthened with clear decision making processes and ready access to information that is based on a “dashboard” approach. Managing these variables will ensure the disconnect between corporate strategy planners and business unit managers who deploy strategies.
5. Promote processes that encourage alignment
The complexity of strategy planning requires the support of simple processes that bring teams together and allow them to communicate often at the right time and place. Creating a multi-dimensional that isn’t top-down or bottom-up approach will be most effective because it breaks down the traditional barriers to strategy planning and nurtures ownership and accountability to achieve strategy goals. A stronger focus on value drivers and visibility throughout the organization will enable functional teams to integrate their plans into a cohesive approach where different components complement and enhance the overall strategy plan.
Contact Arcus for a Strategy Planning session
Arcus offers flexible and affordable strategy planning sessions that take a problem-solution approach to provide management teams with the tools required to develop, deploy and measure strategy plans. Our sessions are one to eight hours in length and start with a “problem statement”. The goal and outcome oriented sessions will lead to potential strategy scenarios that the team could develop further and incorporate into their strategy plans.
For more information and for a complimentary presentation on best practices related to a problem that your team would like to solve, please contact us.