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The 2010 Twelve-step Checklist to Help You Evaluate Your Strategic Business Planning Process
| Guest post by: Joe Evans |
Article Overview: Have you given much consideration to the possibility that your strategic and operational plans may be far less effective than they could be? How would you begin to measure the effectiveness of your current plan? This article should help you to objectively evaluate your own process and self-diagnosis potential issues that may exist in your organization’s current planning world. As you read this article, answer along as we ask the questions to help you honestly evaluate your current business planning process. Let’s start with the checklist. Scan through the list and do your best to give a first impression “yes” or “no” answer to each question.
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The 2010 Twelve-step Checklist to Help You Evaluate Your Strategic Business Planning Process
Have you given much consideration to the possibility that your
strategic and operational plans may be far less effective than they
could be? How would you begin to measure the effectiveness of your
current plan? This article should help you to objectively evaluate your
own process and self-diagnosis potential issues that may exist in your
organization’s current planning world. As you read this article, answer
along as we ask the questions to help you honestly evaluate your
current business planning process.
Let’s start with the checklist. Scan
through the list and do your best to give a first impression “yes” or
“no” answer to each question.
Here is the list:
- Is your plan timeframe spanning more than 12 months?
- Do you have more than five strategic goals in your plan?
- Are any of your plan goals not related directly to measurable outcomes?
- Do all employees within the company know the plan goals for the current plan year, and can they explain how they are expected to contribute to the achievement of the goals?
- Have you communicated with key business partners or suppliers of the organization about the plan goals that might affect them and where they could assist in the achievement of one or more plan goals?
- Is there any room for misinterpretation of the intent or desired outcome for any plan goals?
- Do any job descriptions for employees or officers of the company fail to correlate to defined plan goals?
- Do performance measurements for employees and officers of the company define accountabilities that tie back to the measurement of plan goals?
- Was culture overlooked when defining the plan’s underlying execution tactics?
- Are all plan outcomes / goals related in some tangible way to creating value for the customers and markets served by your organization?
- Does your planning process make the distinction between strategic and operational planning?
- Are the supporting initiatives of your plan goals adjusted to account for seasonal peaks and valleys?
I’ll restate the question and offer some guidance as to the preferred answer for each. Here we go.
1. Is your plan timeframe spanning more than 12 months?
1. Is your plan timeframe spanning more than 12 months?
With the
uncertainty we face in our current economy and the care we must take in
the management of working capital, a “no” answer would be preferred. If
you answered yes, you might consider a shorter and more impactful
planning horizon. Although traditional strategic planning approaches
have typically been oriented around longer-term planning windows, a
shorter plan cycle has some definite advantages. Consider planning on a
rolling 12-month basis with quarterly updates for instance. This
approach is better suited for defining and achieving outcomes that are
based on higher quality information, because it is more current. Let’s
face it, the further out plans are made, the more likely it is that you
begin dealing with missing, incomplete or inaccurate data to base
decisions upon. Having a 3-year strategic plan is not a bad thing, we
are just recommending that plans utilize near-term component contains
more detail and more adeptly addresses contingency. Companies need the
agility that a 12-month rolling plan provides, especially considering
that with quarterly updates to support detail planning of desired key
outcomes, you are always working with more factual data points to base
decisions upon.
2. Do you have more than five strategic goals in your plan?
2. Do you have more than five strategic goals in your plan?
A “no” answer
is preferred. Fewer and more focused plan goals tend to be much more
effective. The key here is to avoid overloading your plan with more
than you can accomplish. It is far easier to envision numerous plan
goals during strategic or operational planning sessions that it is to
have a disciplined and more restrained approach that limits the number
of plan outcomes to a manageable set. The problem with having too many
plan goals is that each goal must be threaded through the layers of the
organization in order to be ultimately accomplished. Each goal
mushrooms into many supporting initiatives as the plan gets fully
developed, often leading to a tangled mess that lacks any clarity or
focus of what the plan goal was there to accomplish in the first place.
Another reason that it is problematic to have too many simultaneous
operational initiatives supporting a bloated strategic plan is that
managers don’t have the time themselves nor the resources at their
disposal to maintain focus in such circumstances, leading to plan goals
that carry-over into the next plan cycle and are not achieved on time.
We suggest that as part of your planning process, you conduct a relative
valuation of each plan goal (key outcome) in order to see how it stands
out relative to to the others on the table. We use various formulas in
our approach to accomplish this, but a simple technique is to use
variables like “Importance of the outcome” and “Satisfaction with the
current-state” to help score and rank your goals. The key is to have a
prioritization process in place that applies a balanced set of criteria
against each desired outcome.
3. Are any of your plan goals not related directly to measurable outcomes?
3. Are any of your plan goals not related directly to measurable outcomes?
If you
answered “yes”, then why is that the case? Plan goals should really be
thought of in terms of outcomes that will mean something tangible to
your customers and the markets your organization serves. Following that
thought, outcomes can and should always be measured and managed
vertically and laterally through the layers of the organizational units
responsible for taking action related to initiatives supporting plan
goals. Likewise, plan outcomes need to be managed and measured where
they involve parties external to the enterprise, such as: suppliers,
channel partners, lobbyist, etc.
4. Do all employees within the company know the plan goals for the current plan year and can they explain how they are expected to contribute to the achievement of the goals?
4. Do all employees within the company know the plan goals for the current plan year and can they explain how they are expected to contribute to the achievement of the goals?
The answer
should be “yes”. Strategic and operational plans break down when they
fail to consider those responsible for executing the plans. There are
two factors to consider related to this point. The first is the need
for plans to be well constructed so as to offer the needed details of
the underlying layers of supporting initiatives. Detailed plan
components should offer great clarity related to who, what, when, where
and why. Of equal importance to the completeness and thoroughness of the
plan, is the communication aspect.
Communication strategies as a plan component are critical in order to promote the major themes behind the plan’s goals / key outcomes. The communication plan component must insure that each area of the business enterprise has been considered relative to who needs to know what information about the plan and by when they need to know it. We are an over communicated to society, so well-timed, concise and clear communication will go further towards gaining support in the organization and producing meaningful contributions during execution. We recommend the creation of marketing pitches for each of the plan goals / key outcomes. The idea here is to provide as much clarity as possible when communications related to the plan are considered. Also, consider developing personas of the “customer” that is the primary recipient of the value the plan goal will create. The customer can be an internal customer in the event that the goal does not relate to an actual market or customer group.
5. Have you communicated with key business partners and suppliers of the organization about the plan goals that might affect them and where they could assist in the achievement of one or more plan goals?
Communication strategies as a plan component are critical in order to promote the major themes behind the plan’s goals / key outcomes. The communication plan component must insure that each area of the business enterprise has been considered relative to who needs to know what information about the plan and by when they need to know it. We are an over communicated to society, so well-timed, concise and clear communication will go further towards gaining support in the organization and producing meaningful contributions during execution. We recommend the creation of marketing pitches for each of the plan goals / key outcomes. The idea here is to provide as much clarity as possible when communications related to the plan are considered. Also, consider developing personas of the “customer” that is the primary recipient of the value the plan goal will create. The customer can be an internal customer in the event that the goal does not relate to an actual market or customer group.
5. Have you communicated with key business partners and suppliers of the organization about the plan goals that might affect them and where they could assist in the achievement of one or more plan goals?
Of course,
the right answer here is “yes”. Always enlist the help of business
relationships within the value chain that in some way support the
products and services that are supplied by your organization. An
external communications plan is important to the successful execution of
plan goals and should contain messaging tailored to help suppliers
understand why they are being asked for price reductions or quantity
discounts not currently part of your normal purchasing arrangements. By
communicating openly about your organization’s goals and the role your
external business relationships play in your success towards achieving
those goals, cooperation can be gained and closer…more rewarding
business relations established.
6. Is there any room for misinterpretation of the intent or desired outcome for any plan goals?
6. Is there any room for misinterpretation of the intent or desired outcome for any plan goals?
If you
answered “yes”, the plan goals should be revisited to correct for
vagueness. Ambiguous plan goals lead to variability of interpretation
and misfires in execution. Not saying what we want clearly leads to
misinterpretation and in planning efforts that in turn translates into
risk that the actual achievement of the desired strategic outcomes may
fail. Most planning processes introduce variability into the plan from
the very beginning – at the time plan goals are defined. If there is
room for interpretation in your plan goals, you have this issue. By
using a very controlled vocabulary in defining outcome-driven goals, you
can avoid this mistake. For example, a clearly defined outcome would
look like this: “Reduce raw materials cost for XYZ unit by 3%.” An
example of a vague and more ambiguous plan goal would look like this:
“Trim production costs in XYZ unit.”
7. Do any job descriptions for employees or officers of the company fail to correlate to defined plan goals?
7. Do any job descriptions for employees or officers of the company fail to correlate to defined plan goals?
If you
answered “yes” to this question, you have a big opportunity area with
this one. A planning approach should be accountability and performance
driven. This may seem intuitively obvious, but in order to realize an
organizational desired outcome, you must have a plan that is good and
reasonable, yes, but you must also have the people to carry it out and
they must have incentive and understanding to execute to that plan.
Therefore, job descriptions and accountabilities must be in alignment
with plan goals. Failure to do so jeopardizes the effectiveness of
strategic and operational plans. This is a common issue that must be
addressed, even in very mature organizations. We see many clients that
have strategic and operational plans in place that would otherwise be
considered very sound, but they lack the staff accountability to bring
that plan to fruition.
Good alignment of job descriptions and job responsibilities creates accountable employees, reinforces strategic plan goals by using the communications strategy to relate directly to employees about their role and the organization’s expectations of them relative to the plan. Furthermore, job alignment allows management to affect the outcomes through careful measurement of progress over time and take action when needed when tactical elements of the plan are not meeting expectations.
Staff incentive, understanding and value to the execution of the plan are far more important than specific expertise. Employees that understand what is being done, why, when and how they can contribute become empowered team players.
8. Do performance measurements for employees and officers of the company define accountabilities that tie back to the measurement of plan goals?
Good alignment of job descriptions and job responsibilities creates accountable employees, reinforces strategic plan goals by using the communications strategy to relate directly to employees about their role and the organization’s expectations of them relative to the plan. Furthermore, job alignment allows management to affect the outcomes through careful measurement of progress over time and take action when needed when tactical elements of the plan are not meeting expectations.
Staff incentive, understanding and value to the execution of the plan are far more important than specific expertise. Employees that understand what is being done, why, when and how they can contribute become empowered team players.
8. Do performance measurements for employees and officers of the company define accountabilities that tie back to the measurement of plan goals?
Hopefully you
answered “yes” to this question. If not, keep in mind that as with
good job descriptions and well-aligned job accountabilities, a strategic
planning process must address performance measurements that support
plan goals and execution while tying back to incentives. While this is
crucial to do, it adds a level of complexity to planning that is to
often overlooked. This is due in part to the level of cooperation
required with Human Resources and with management across the functional
areas. Aligning accountabilities with performance measurements requires a
lot of discipline to think through all of the angles the first time it
is enacted as a legitimate part of the planning process. Regardless of
the initial effort involved, constructing well thought out plan goals
that can be measured and aligning job responsibilities and
corresponding performance measurements to reinforce those goals should
not be considered an optional component of the planning process.
Organizations already require the structures be in place to manage
performance across the enterprise. This work has already been done in
almost all cases. The added dimension of alignment to plan goals puts
the planning effort on good footing to providing all layers of
management empowerment to measure and manage towards achievement of plan
goals.
9. Was culture overlooked when defining the plan’s underlying execution tactics?
9. Was culture overlooked when defining the plan’s underlying execution tactics?
The preferred
answer is “no”, of course! Culture is a critical component to short
and long-term planning that, if not properly understood, can
dramatically affect the execution of strategic and operational plans.
Culture is the foundation of HOW the organization works and HOW work
will be completed on the plan in order to realize the key outcomes. By
aligning planning with culture, it is possible to harness the
organization’s potential to dominate within their market place.
Method Frameworks classifies corporate cultures into one of four models:
10. Are all plan outcomes / goals related in some tangible way to creating value for the customers and markets served by your organization?
Method Frameworks classifies corporate cultures into one of four models:
Associated with these four distinct culture signatures are corresponding organizational hierarchies. The differences in culture and hierarchy relate back to the HOW the organization works and HOW work gets accomplished. Aligning strategy, tactics and governance to address these dimensions will greatly affect the outcome of planning efforts.
- Cooperative: The organization or team focuses on the customer and delivery to the customer, resulting in customization and tailoring to customer needs.
- Merit Focused: The organization or team focuses on how it can organize and create predictability, reliability, low cost and structure.
- Actualized: The organization or team focuses on fulfilling the human potential, helping create better lives for its customers and offering self-actualization.
- Creative: The organization or team focuses on creating superiority of product or service, uniqueness, one of a kind value-add service and product.
10. Are all plan outcomes / goals related in some tangible way to creating value for the customers and markets served by your organization?
If you answered “yes”, you can pat yourself on the back. Congratulations!
Customer-centric planning creates competitive advantage for the business by aligning organizational action with value propositions perceived by the customers and markets served by the enterprise. When this occurs, the planning effort literally creates value for the most important stakeholder of the firm – the end customer. Not to say that all plan goals are or should be specifically aimed at the customer, but with the focus on what end-value we can create for the customer through our plan goals, we’ve put a face or persona on the reason for the desired outcome and can work the organizational culture and hierarchy more effectively to accomplish our strategic outcomes.
11. Does your planning process make the distinction between strategic and operational planning?
Customer-centric planning creates competitive advantage for the business by aligning organizational action with value propositions perceived by the customers and markets served by the enterprise. When this occurs, the planning effort literally creates value for the most important stakeholder of the firm – the end customer. Not to say that all plan goals are or should be specifically aimed at the customer, but with the focus on what end-value we can create for the customer through our plan goals, we’ve put a face or persona on the reason for the desired outcome and can work the organizational culture and hierarchy more effectively to accomplish our strategic outcomes.
11. Does your planning process make the distinction between strategic and operational planning?
Preferred
answer – “yes”. An effective planning approach should be a bifurcated
process allowing for the organization to plan strategically at the
enterprise level and then operationally at the business unit /divisional
/ departmental level - with each component supporting the other.
Failing the expand the planning effort far enough to reach all the way
down through the organizational layers and to extend beyond the
enterprise boundaries is an all to common problem with planning efforts
and processes.
Those involved with strategic planning understand that business strategy involves an integrated set of actions designed to help companies gain sustainable advantage over competitors. To address the needed integration, planning should be constructed in layers that address the overall business ecosystem. The business ecosystem is a framework that allows a company to visualize the entire enterprise and design the key outcomes that will most likely benefit the company and help that organization dominate against its competitors.
In 1985, Harvard’s Michael Porter introduced the value chain framework in his book, “Competitive Advantage”. The client's business ecosystem looks at all of the functional areas that are involved with the developing and delivering the offering to the marketplace. Through each segment of the circle, executives choose how they intend to serve their market. From planning standpoint, it is important to assess is how the business ecosystem operates and more specifically, how decisions within one segment of the ecosystem can impact (or have consequences on) the enterprise as a whole or to specific segments of the chain. This is where well-performed operational planning can make the game-changing difference. The ecosystem highlights enterprise alignment and individual value within the sphere as important components to the organizations overall success.
12. Are the supporting initiatives of your plan goals adjusted to account for seasonal peaks and valleys?
Those involved with strategic planning understand that business strategy involves an integrated set of actions designed to help companies gain sustainable advantage over competitors. To address the needed integration, planning should be constructed in layers that address the overall business ecosystem. The business ecosystem is a framework that allows a company to visualize the entire enterprise and design the key outcomes that will most likely benefit the company and help that organization dominate against its competitors.
In 1985, Harvard’s Michael Porter introduced the value chain framework in his book, “Competitive Advantage”. The client's business ecosystem looks at all of the functional areas that are involved with the developing and delivering the offering to the marketplace. Through each segment of the circle, executives choose how they intend to serve their market. From planning standpoint, it is important to assess is how the business ecosystem operates and more specifically, how decisions within one segment of the ecosystem can impact (or have consequences on) the enterprise as a whole or to specific segments of the chain. This is where well-performed operational planning can make the game-changing difference. The ecosystem highlights enterprise alignment and individual value within the sphere as important components to the organizations overall success.
12. Are the supporting initiatives of your plan goals adjusted to account for seasonal peaks and valleys?
A
“yes” answer here is preferred. In addition to attenuating the many
competing priorities of the business to the realities of financial
budgets, the planning process must take into account the relevant
business economic cycles within the business. Economic cycles, or
eco-cycles as we refer to them, will positively or negatively affect
market conditions, access to capital, energy, focus and many other
factors that will otherwise inhibit or accelerate goal achievement.
While operating budgets are annual in nature, eco-cycles are more
sporadic and usually are seasonal to the business. Planning for
eco-cycles builds an added layer of realistic contingency into the
plan. Eco-cycles are not only financially related, but also affect the
organization’s energy and focus to work on plan goals.
To the extent that these eco-cycles are known and understood, they should be accounted for within strategic and operational plans. A review of trend data for previous years can help identify the peaks and valleys that will serve as predictors and leveraged into the plan. By reflecting the general timing of eco-cycles in the resulting plan, we’ve built in a reasonableness factor that can also be thought of as contingency to allow for the inevitable swings in activity associated with seasonal activity. We’ve also built in the opportunistic and responsive dimensions to planning by allowing for available slack (agility) to exist within the business operations to seize on opportunities without missing plan deadlines and compromising on goal achievement.
Here is a bonus question that can help to ultimately evaluate your planning process.
To the extent that these eco-cycles are known and understood, they should be accounted for within strategic and operational plans. A review of trend data for previous years can help identify the peaks and valleys that will serve as predictors and leveraged into the plan. By reflecting the general timing of eco-cycles in the resulting plan, we’ve built in a reasonableness factor that can also be thought of as contingency to allow for the inevitable swings in activity associated with seasonal activity. We’ve also built in the opportunistic and responsive dimensions to planning by allowing for available slack (agility) to exist within the business operations to seize on opportunities without missing plan deadlines and compromising on goal achievement.
Here is a bonus question that can help to ultimately evaluate your planning process.
“Is the process
effective and repeatable in consistently defining meaningful goals that
get achieved as expected when the plan is followed?”
* * *
Join the Strategic Planning Xchange group.
Does this leave you curious about the effectiveness of your own planning process? Plan4 is our proprietary business planning process that involves an integrated set of actions designed to help companies gain sustainable advantage. You can learn more about Plan4 by downloading our Plan4 Planning Process Overview or contact us to request a meeting with a planning consultant.
Follow our blog often to get many more planning tips and visit www.methodframeworks.com for information about our powerful Plan4 process and loads of over information on the differences between Plan4 and traditional planning approaches.
Related ArticlesJoin the Strategic Planning Xchange group.
Does this leave you curious about the effectiveness of your own planning process? Plan4 is our proprietary business planning process that involves an integrated set of actions designed to help companies gain sustainable advantage. You can learn more about Plan4 by downloading our Plan4 Planning Process Overview or contact us to request a meeting with a planning consultant.
Follow our blog often to get many more planning tips and visit www.methodframeworks.com for information about our powerful Plan4 process and loads of over information on the differences between Plan4 and traditional planning approaches.
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About the Author: Joe Evans RSS for Joe's articles - Visit Joe's website Joe Evans serves as the President and Chief Executive Officer of Method Frameworks. Method Frameworks provides management consulting services to commercial enterprises with strategic and operational planning solutions using the firm’s proprietary Plan4 process. Visit Method Frameworks at www.methodframeworks.com. Joe is a published author, frequent speaker and recognized expert in co rporate strategic planning. To contact Method Frameworks about scheduling Mr. Evans about an upcoming speaking engagement, visit www.methodframeworks.com/business-speaker or email requests to media_relations@methodframeworks.com. Want more corporate strategic planning insights? Read Joe's blog. Also, request to join the "Strategic Planning Xchange" now by following this link to the Strategic Planning Xchange. Click here to visit Joe's website   How to Align your Corporate Strategy Prioritizing Organizational Wants Versus Needs How To Tell The Difference Mapping Out Strategic Execution Part 2 of Why We Fail at Strategic Implementation The Critical Step of Currentstate Analysis Review in Strategic Planning Dont We Have People For That Operational Planning Strategy Execution |
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Great topic Kevin!!
Jude
HRPreneur
- Hi everyone,
I am new to the forum and I recently started my own Human Capital (HR) consulting firm called HRPreneur Inc. HRP focuses on making human capital a strategic differentiator for SME's.
Below is a summary about HRP;
Who We Are:
HRP is a Human Capital consulting firm with 30 years of experience that becomes an extension of your company by providing a full array of services to help you create a highly engaged workforce focused on achieving strategic results in order to build a long lasting great company!
Mission:
HRP provides small and medium sized businesses a Strategic HR Business Partner to increase employee engagement, resulting in cost savings, increased productivity and results at an affordable rate!
Vision:
To inspire and warrant SME's reach their full competency!
Cost Effectiveness:
We provide over 30 years of experience at a fraction of the cost at a strategic executive HR business level
You will save between 50% to 60% in costs per year on salary, bonus, benefits, training, office space alone
We will provide you additional cost efficiencies through our services
Services:
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Franchise of a popular call center
- Hi All,
I was planning to setup a franchise of a popular call center services company . They are giving several services to their customers like - knowledge management , workforce management , Business Process Automation etc. Now I need to know that from where and how I should start and who must be my targeting customers.
Business Innovation
- Hi Simon
If you can finish off the Business Plan and think about your strategic direction or how you are going to use your product to convince people it's a great idea, it will set the foundation for your programming project. You see, when you are looking for funding you will need a Business Plan and Strategic Plan that will convince companies to invest into your new idea.
Has anyone achieved this idea before using another industry besides health and fitness that you know of?
You should also design some mockups as a "preview" for your programming project. This will also help reduce your programming costs as everyone will know exactly what you want if you have detailed mockups already completed including any functionality you require.
Starting mockups for websites and software applications on paper is the best way if you're not a guru in graphic editing software.
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- 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read
- this is a fascinating book about the history of Business theory, and I'd recommend it to anybody.
2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto.
3. PADI: The Business of Diving Book
Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
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