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May 16, 2020

A Tested Perspective on Successful Business Planning (Part 2)

This post is the second of a three-part series on strategic planning.

If you followed the guidance from the from our a tested perspective on successful business planning post, you’ve set yourself up to have a good debate and each attendee should be armed with plenty of anecdotal insights.

That said, you need to make sure that conventional business wisdom aligns with the data you have at hand. Preparing this data will help you confirm your thinking or force you to reevaluate long-standing business practices.

Strategic planning - thinking forward for successful education

In the technology space in particular, things change rapidly. As a result, you can’t afford to get stuck on any position. You must be constantly evaluating and evolving your business practices to structure what you have today to be ready for where you’re headed tomorrow. To do this, aligning your strategy to real-world execution will be key.

Now that you’re in the strategic planning meeting with all your stakeholders on the same page, think forward to execution by keeping these things in mind:

Balance top-down directives with bottom-up empowerment

There are two basic models of planning. The first is the classic top-down approach where the corporate center defines objectives, creates plans, sets top-level budgets or targets and cascades those elements to customer segment or geographic focused groups. There is little choice on implementing these at a local level as budgets pre-determined and allotted to key investment areas. The other approach is a bottom-up empowerment model whereby the corporate center provides just top level objectives and budgets, leaving execution decisions to federated organizations. Determine the right balance between the two for your company. Then build a plan and approach that aligns with your culture, organization, and strategic situation. Keep in mind that the greater the degree of a centrally-planned structure, the greater the need for templates and prescriptive guidance. Whereas the greater the degree of empowerment, the greater the need for measurement and structured review.

Go beyond baseline models

Typically, the heavy lifting of strategic planning has fallen on the shoulders of the finance team building pro forma models related to revenue, growth, and profitability. This sets a strong foundation for conversations, but more is needed to ensure successful implementation. After all, these types of baseline models will show one type of goal: financial. It would be just as useful to build models and look at goals for customers, partners, products, markets, etc. By looking at these side by side and correlating them, you begin to paint a fuller picture and can make more informed decisions about investments.

Tailor how you communicate new plans

Plans shouldn’t be large binders that sit on a shelf or languish on project sites. They need to be built in a way that provides the most direct and effective communication for your situation. Most plans are presented one way—at a high level to a variety audiences: internal stakeholders, partners, customers, boards, and analyst communities. Plans should be segmented, however, and built with sufficient detail within each of those segments to drive visibility, ownership, and accountability. Your approach to planning should explicitly contain a communication plan that manages the process of disseminating information to the right audiences at the right time in the right way.

Manage to what you can measure, measure what you should manage

Designing an effective set of metrics or scorecards that provides a multi-perspective view of performance is essential. The old cliché that you can’t fly a plane using only an altimeter is true. It takes more than one metric to fly a plane. Likewise, it’s difficult to fly a plane with 1,000 different indicator lights, each with only an on-off setting. Instead, you need the right set of metrics, presented in a way that delivers insight, and aids in decision making. The trouble is, today we are often overwhelmed with data. It’s easy to fall prey to analysis paralysis, measuring far more than we can possibly use for management, thereby creating noise in the review process. To paraphrase Nate Silver, the trick is to find the signal that is hidden in the noise.

As you begin the strategic planning process, it’s important to remember that the process begins long before the boardroom discussion. Treat it like you would any other project. Once you’re in the board room, don’t forget the importance of making your strategic decisions relevant to what is actually happening and actionable for those on the ground.

Other blogs in this series:

Part 1: Strategic planning starts long before the boardroom discussion
Part 3: Tips for success when developing your own strategic planning process 

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Chris McCall

As Chairman of the Board, Chris manages The Spur Group’s strategic planning practice and has over 25 years of experience across business strategy, operations and channel management.