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Developing a New Strategic Planning Process


Connecting with customers across multiple channels is a business imperative, and making it happen is a strategic priority in countless retail industries. When a Canadian bank launched an initiative to enable cross-channel interactions using cloud technology, the repercussions spread throughout every division. The bank planned, funded and executed this high-priority initiative from the top down, with cross-functional teams working in successive iterations toward shared objectives. The bank's agility cut the strategic planning process in half, capitalized on economies of scale and delivered on strategic goals.

This bank achieved its vision for a transformative technology application by connecting that vision to top-down, strategic execution. The results might not have been as rosy with the more common bottom-up approach, where departments vie for budget to fund projects loosely represented as "strategic" based on a dusty vision statement. In these scenarios, about half of the strategic initiatives are doomed to fail because there's no roadmap for success.

The purpose of the strategic planning process is to create a vision to drive change and transformation. The strategic plan itself connects that vision to strategic initiatives, priorities and goals. If there is a disconnect, then there will be insufficient direction, funding and resources for successful execution. Organizations that struggle to achieve their goals typically have a disconnected and dysfunctional strategic planning process.

Common Missteps in Strategic Planning

Too often, corporate leadership presents their strategic plan as a series of high-level vision statements with no associated budget, funding or resources. There are no actionable plans attached, and no assigned responsibilities. No one really knows who should do what to achieve the corporate vision. The situation is somewhat improved in organizations that appoint a strategic planning team to flesh out the plan, but the team rarely assumes responsibility for overseeing strategic execution, and there is no process for funding strategic initiatives.

Given the common incompetencies in the strategic planning process, it’s no wonder that 87% of companies fail to execute their strategic plan every year.

In the absence of capable leadership, strategic planning frequently falls to Finance, whose annual budgeting process determines which projects are funded. This bottom-up activity selects projects regardless of strategic alignment, although projects are sometimes pitched as "strategic" to receive funds. Some business units even have strategic buckets designated for projects that vaguely fit their understanding of corporate strategy, usually to grab more funding for the work they think is more important.

Reengineering the Strategic Planning Process

You can overcome these odds by building a new strategic planning process from the top down:

  • Designate a cross-functional strategic planning team to identify what the organization needs to do to stay competitive and, potentially, disrupt and dominate your market.
  • Break down these visionary ideas into actionable plans with clear responsibilities and defined funding and work and resource requirements.
  • Build a strategic roadmap that aligns every project with strategic goals, identifies strategic priorities, and charts timelines and milestones.

For agile execution of the strategic plan, allow goals to drive ideas. Empower project teams to decide how to deliver, and allow the work to be iterative in nature so that unsuccessful approaches are not perpetuated, successful projects continue to be funded, and new initiatives are tried and evaluated. This can lead to innovative alternatives that are ultimately more successful.

When strategic planning is an iterative process, the feedback loop of analysis and change refines your strategy, making it more likely that your organization will realize its vision. Like navigating a ship through unchartered waters, constant small course corrections are more likely to get you where you want to go than steering straight ahead until you run aground. To reach your destination with minimal risk, execute projects incrementally, evaluate progress toward goals frequently and pivot toward adjusted strategies quickly. Funding incrementally instead of all at once ensures that each iteration receives the financial resources it requires.

Strategic planning is an exercise in uncertainty. The question of how to deliver value can be answered in countless ways. Embrace the uncertainty by building flexibility into planning and execution. The result will be an adaptable plan with goals that can be reprioritized and strategy tradeoffs that weigh funding, capacity and risk.

Success Factors in Strategic Planning

There are multiple, interdependent factors that drive success in strategic planning. An agile plan includes these fundamentals:

  • Strategy that is driven by products, applications and services
  • Incremental, measurable and achievable strategic goals
  • Top-down allocation of project resources (people, capital, and/or material goods)
  • Trade-offs in resource allocation modeled for various scenarios
  • Strategic funding and initiatives managed to drive performance
  • Strategic roadmaps that connect strategy to outcomes with investments, timelines, milestones, priorities and progress
  • Iterative projects with defined, measurable objectives
  • Performance and progress shared with dashboards and visualizations
  • Short- and long-term assessment of value delivered
  • Continuous process for reprioritizing projects and reallocating resources
  • Alternatives for achieving objectives based on cost, benefit, risk and capacity
  • Programs delivered to drive innovation and transformational change

Bringing a strategic vision to life takes unprecedented coordination of work, resources and technology. That means engaging people at all levels of the organization, and continually evolving their capabilities to execute and deliver on plan.

Engage Your Organization in Strategic Work

Unfortunately, too many organizations trip over the hurdle of communicating their vision and execution strategy to employees. Harvard Business Review reported that 95 percent of employees either don’t know or don't understand their company’s strategy. How can people work on things they just don't get?

It's human nature for people to drift back to working on what they know instead of the unfamiliar work that is aligned with strategy. It's also common for individuals to resist working on cross-functional teams.

When it comes to relying on other groups to complete projects, 84% of managers trust colleagues in their own business units, but only 9% trust colleagues in other units.

Strategic execution unravels when people refuse to prioritize work for those outside their department, unit or division.

When teams lose sight of strategic goals and deprioritize these projects, the allocated resources tend to disappear. In fact, it's not uncommon to reallocate strategic funding to non-strategic work – a practice that undermines strategic execution. Project teams stay focused and on task if they have confidence in the strategic planning process and are committed to the strategic vision. That means engaging every business unit, department and team in planning from the top down.

In a top-down process, each team buys in on the value statements that clearly define what is expected of them in the short and long term. Each iteration provides feedback that refines the team's understanding of how to achieve its goals. The strategic roadmap clarifies project priorities and resolves priority conflicts for teams on cross-functional / cross-silo projects. These timelines and milestones establish accountability and set expectations for prioritizing strategic work relative to day-to-day work. An overarching schedule with timelines and milestones for all teams allows everyone to see how their work tracks against the organizational goals.

Collaborative cross-functional teams can make or break a strategic initiative. An organization-wide collaborative workspace allows cross-functional teams to connect and share information, ensuring that everyone has what they need to succeed. Instead of working on assumptions based on little or no information, teams can collect current information and respond accordingly.

Streamline Your Strategic Planning

Using presentations, office documents, spreadsheets and email to manage strategic planning and execution is like using an Etch-a-Sketch to create and manage an enterprise-wide customer loyalty program. You need dynamic, interconnected tools to manage interconnected work streams across the organization.

Strategic planning software streamlines the process by centralizing connected information and automating core functions such as scenario planning, strategic roadmapping, program management, financial planning and strategic analysis. Visual tools and dashboards accelerate the process of defining objectives, budget, funding, resources, schedules and actionable plans.

An automated strategic planning process continuously updates data and forecasts based on input from across the organization, helping to realign priorities, reallocate resources and, occasionally, rethink goals and initiatives. Using strategic planning software not only makes this process more efficient and effective, but also provides visibility and transparency across the organization.

Making Strategy Real

Even the most inspired vision will come to naught if that vision is not connected to strategic execution. Equally vital is how the strategic plan is communicated throughout the organization to gain sufficient buy-in, funding and resources. A strategic plan is not dictated from above. It envisions the means to an end, and empowers the organization to plot the best path. The most innovative organizations allow the goals to drive ideas. When responsibility is assumed from the top down, teams fully engage.

For strategic planning to be truly transformative, it takes a sense of urgency to drive organizational change. Clear priorities, achievable goals, rapid iteration and agile re-visioning can accelerate the process in volatile times. A strategic planning process that continuously monitors progress, evaluates outcomes and forecasts time-to-value allows organizations to pivot in anticipation of changing market conditions.

The Fundamentals: A 5-Step Strategic Planning Process

Create your strategic plan and translate it into an actionable roadmap that your entire organization can manage, track and execute against. This 1,000-foot view of the strategic planning process provides a simplified approach to get you started.

  1. Determine your current market position.
    • Designate a cross-functional planning team and process owner.
    • Identify strategic issues across the organization.
    • Do a SWOT analysis (strengths, weaknesses, opportunities, threats).
    • Listen to customer feedback, wants, needs and demands.
    • Assess your workforce skills, deficits, gaps and overlaps.
    • Evaluate technology preparedness for digital transformation.
  2. Develop your strategic vision.
    • Articulate your mission, vision and values.
    • Define your competitive advantage and differentiators.
    • Envision cross-functional strategies for achieving your vision.
    • Identify strategic objectives for the short and long term.
    • Forecast your financial position as a result of achieving these objectives.
  3. Create an actionable strategic plan.
    • Define strategic initiatives and priorities across the organization.
    • Define SMART goals (measurable, achievable, relevant, time-bound).
    • Determine key performance indicators (KPIs) for each goal.
    • Assign top-down responsibility to cross-functional teams.
    • Allocate funding to strategic projects.
  4. Build a strategic roadmap to manage execution.
    • Connect strategy to investments and outcomes.
    • Manage initiatives/projects, goals, funding, resources, timelines, milestones, teams, KPIs.
    • Monitor progress, evaluate performance, revise/update goals, create iterations.
    • Use strategy meetings to identify accomplishments, shortfalls and action plans.
    • Understand impacts of decisions, model trade-offs and adjust dynamically.
    • Communicate to the organization strategic priorities, progress and changes.
  5. Review and update strategy.
    • Leverage visibility and transparency to assess actual progress towards goals.
    • Update plan of action with each iteration of strategic initiatives.
    • Optimize funding and resource allocation in sync with agile execution.
    • Review quarterly and as strategic vision shifts.
    • Repeat the entire process at least once every three years.

Creating a strategic planning process is the key to creating a vision that drives organizational transformation. Goals and objectives are both demonstrated and achieved by the strategic plan. Avoiding disconnection between the organizational vision and the strategic plan ensure proper direction, funding and resources for successful execution.