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What's Wrong With Your Corporate Planning Process?
| Guest post by: Joe Evans |
Article Overview: Does your corporate strategic planning process consistently deliver the outcomes you expect or has strategic planning been devalued (literally or figuratively) within your organization due to its declining efficacy? Corporate planning in today’s rapidly-changing and uncertain business environment requires a strategic planning process that empowers organizations to achieve operational excellence on a day-to-day basis while also planning for the future. If your corporate planning process has lost its luster, consider what may be wrong.
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What's Wrong With Your Corporate Planning Process?
Does your corporate strategic planning
process consistently deliver the outcomes you expect or has strategic
planning been devalued (literally or figuratively) within your
organization due to its declining efficacy?
Corporate planning in today’s
rapidly-changing and uncertain business environment requires a strategic planning process
that empowers organizations to achieve operational excellence on a
day-to-day basis while also planning for the future. If your corporate
planning process has lost its luster, consider what may be wrong.
12 Common Mistakes in the
Corporate Planning Process:
Mistake #1: The timeframe of the
plan is longer than 12 months.
Related ArticlesLong term planning certainly has
its place in a corporate planning process but a shorter timeframe of 12
months allows organizations to utilize valuable current information. A
rolling 12-month plan that is updated on a quarterly basis offers the
quality that a longer term plan with its inherently missing, incomplete,
or inaccurate data simply cannot deliver.
Mistake #2: The plan consists of more than 5 strategic goals.
Mistake #2: The plan consists of more than 5 strategic goals.
Organizations often have a long
wish list of goals, ranging from pie-in-the-sky to mundane. Dreaming up
goals is generally not an issue. Instead the issue is having the
discipline to narrow down your goals to a manageable and achievable
level. When you consider that each goal will lead to a sequence of
activities and deliverables that will need to be managed and implemented
throughout the organization, it’s easy to see how a long list of goals
can inhibit your success.
Narrowing down strategic goals
requires a relative valuation of potential goals to determine which are
worth pursuing and the prioritization of each. There are a number of
ways to do this such as using the variables, “Importance of the outcome”
and “Satisfaction with the current-state” to help score and rank your
goals.
Mistake #3: Goals within the plan are not tied to measurable outcomes.
Mistake #3: Goals within the plan are not tied to measurable outcomes.
Organizational goals should be
constructed in terms of outcomes that will mean something tangible to
your customers and the markets your organization serves. Your goals
should be defined in such a way that they can be measured and managed
throughout the layers of the organization in ways that propel action and
achievement.
Mistake #4: Employees are unaware of the goals and how they are expected to contribute to the outcomes.
Mistake #4: Employees are unaware of the goals and how they are expected to contribute to the outcomes.
When the corporate planning
process fails to consider the individuals who will actually implement
the plan, breakdowns happen and desired outcomes are rarely attained.
Detailed plans of action are needed for each initiative and goals should
be carefully communicated throughout the organization.
Mistake #5: Key suppliers and partners of the organization are unaware of how the organization’s goals might affect them and how they can contribute to the organization’s success.
Mistake #5: Key suppliers and partners of the organization are unaware of how the organization’s goals might affect them and how they can contribute to the organization’s success.
By communicating your
organizational goals to key suppliers and partners you can gain much
needed buy-in and assistance to achieve desired outcomes. Asking for
price reductions, extended payment terms, or quantity discounts can be
greatly facilitated when your suppliers and partners are made part of
the process.
Mistake #6: The corporate plan leaves room for interpretation.
Mistake #6: The corporate plan leaves room for interpretation.
This mistake typically circles
back to the way your organizational goals have been defined. If there is
ambiguity in the way goals are defined, those goals will be easily
misinterpreted by members of the organization and will then result in
execution that misses the intended mark. Starting with a clearly
defined outcome, much of this interpretation and resulting ambiguity can
be replaced by clearly defined expectations. For example, a clearly
defined outcome may be written as, “Reduce packaging cost for product
XYZ by 2%.” An ambiguous poorly written goal might read, “Drive down
costs of XYZ product.”
Mistake #7: Job descriptions fail to support the organization’s desired outcomes.
Mistake #7: Job descriptions fail to support the organization’s desired outcomes.
When job descriptions and job
responsibilities align with corporate goals organizations more readily
achieve accountability and understanding from individuals throughout the
organization. When job description and responsibilities are
effectively communicated individuals become tuned with their roles and
the expectations surrounding them resulting in empowered team players.
Mistake #8: The performance measures of employees and officers are unrelated to the organization’s goals.
Mistake #8: The performance measures of employees and officers are unrelated to the organization’s goals.
Taking the above point a bit
further, organizations must set performance measurements and incentives
for employees and officers. These performance measurements should be
derived from the job descriptions and job responsibilities, and the
resulting incentives must be strong enough to empower all layers of
management to measure and manage efforts toward the achievement of plan
goals. While this certainly adds a layer of complexity to the
organizational planning process, neglecting this step will result in
subpar performance.
Mistake #9: Organizational culture is overlooked in creating executional plans.
Mistake #9: Organizational culture is overlooked in creating executional plans.
The corporate planning process
must consider the culture in which the plan will live. Without this, it
is impossible to fulfill the organization’s potential to dominate within
their marketplace. Company culture determines how the organization
works and how work will be completed. Aligning strategy, tactics and
governance to address these dimensions will greatly affect the outcome
of planning efforts.
Mistake #10: Customer value is overlooked in the planning goals.
Mistake #10: Customer value is overlooked in the planning goals.
Customer-centric planning puts
your number one stakeholder – the end customer – at the forefront of the
organization’s activities and goals. By creating goals that reflect the
type of value the organization can create for the customer, you’ll “put
a face to the name” and more effectively connect members of the
organization with the desired outcomes. Certainly, not all goals need
to be customer-centric but to overlook this aspect is to potentially
miss important opportunities.
Mistake #11: The organizational plan fails to distinguish between operational and strategic planning.
Mistake #11: The organizational plan fails to distinguish between operational and strategic planning.
An effective corporate planning
process allows the organization to plan strategically at the enterprise
level and then operationally at the business unit level with each part
supporting the other. Failing to reach all the way down through the
organizational layers is a common problem with corporate planning
processes. Considering that strategic planning is designed to help
companies gain sustainable competitive advantage, planning must address
the entire business ecosystem – from top to bottom.
Mistake #12: The plan fails to account for seasonal peaks and valleys.
Mistake #12: The plan fails to account for seasonal peaks and valleys.
It is well-understood that
organizations must balance the realities of financial budgets during the
corporate planning process. Yet, the organization must also take into
account relevant business economic cycles within the business. Economic
cycles will impact market conditions, access to capital, energy, focus,
and many other factors (both positively and negatively) to inhibit or
accelerate an organization’s ability to accomplish its desired
outcomes. To the extent that you know and understand economic cycles,
you can build a layer of realistic contingency into your corporate plans
thus improving results.
No doubt we’ve all made at least one of the 12 mistakes outlined in this article. Yet, there’s no reason why our planning processes cannot evolve and improve by understanding what makes for a more effective process in today’s business environment. In the end, a corporate strategic planning process should consistently define and deliver upon meaningful goals through a repeatable and effective process that addresses these 12 common mistakes and much more. Will you continue to strive for a better corporate planning approach?
No doubt we’ve all made at least one of the 12 mistakes outlined in this article. Yet, there’s no reason why our planning processes cannot evolve and improve by understanding what makes for a more effective process in today’s business environment. In the end, a corporate strategic planning process should consistently define and deliver upon meaningful goals through a repeatable and effective process that addresses these 12 common mistakes and much more. Will you continue to strive for a better corporate planning approach?
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Article Tags: business environment, corporate planning, corporate strategic planning, operational excellence, strategic planning process
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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   Align Your Strategy and Operational Plans to Core Competencies Prioritizing Organizational Wants Versus Needs How To Tell The Difference Are We There Yet Strategic Planning Begins with a Clear Picture of What You Do The Changing Role of Board Involvement in Corporate Strategy |
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