four best practices for strategic planning

The year after that, it’s a business-model-reinvention exercise. Executives at most companies criticize it as overly bureaucratic, insufficiently insightful, and ill suited for today’s rapidly changing markets. It makes it easier to spot the emerging competitors, new business models, and changes to customers’ economics that could undermine the long-term vision or challenge key strategic assumptions. The application of strategic planning in business is a result of difficult managerial decisions that comprise good and less desirable courses of action. In conference rooms everywhere, corporate planners are in the midst of the annual strategic-planning process. Many companies have at least a three-dimensional matrix: for example, brands or product lines, geographies, and functions. (For a glimpse of scenarios that require special consideration, see “Three Special Cases.”). Forums in which strategy can be discussed outside the rhythms of these three processes are also important; they can allow for real-time adjustments throughout the year. A Strategy Dashboard to Highlight Success Metrics. In these cases, it is essential to have a strong executive sponsor and clear funding sources. They constantly reinvent and stimulate the strategic dialogue. Another good approach is to ask the leaders of the business units to identify the most important questions that the center should be asking them—being clear that the business unit leaders will be judged on the quality of the questions that they propose. At a time when technological progress is blurring industry boundaries, when globalization is expanding geographic horizons, and when new competitors are arising from emerging and adjacent markets, it is more important than ever to be prepared strategically, to be able to look sideways, and to have a sound strategy firmly coupled with a system to translate it into action. Long gone are the days when the Human Resources department focused solely on recruiting employees. In the second year, the process is less painful, because most analyses can simply be adjustments of last year’s analysis—but, typically, it is also much less useful. Best Practice • April 5, 2018 HR strategy examples – What makes a successful HR strategy? A new chief strategy officer is appointed. This allows companies to explore weak and emerging signals of opportunity and risk—such as subtle changes in customer or competitive behavior—in core markets as well as in peripheral or adjacent markets. And achieving strategic preparedness takes a structured, organized thought process to identify and consider potential threats, disruptions, and opportunities—which is, for want of a better term, strategic planning. It’s about projecting more than five years into the future. Leading companies often think of strategy at three time horizons (see Exhibit 1): The Long Term. Four Best Practices for Leveraging IT Services for Strategic Workforce Planning Published: 13 August 2015 ID: G00278348 Analyst(s): Suzanne Adnams, Mark Coleman Summary Digital business requires that workforce planning be done within a business context rather than a technology context. A critical element in effective strategic … Strategic-planning-business-unit-strategy-four-best-practices-strategic-planning Characteristics and Workflows of the Business Unit Strategic Planning Some Effective Ways of Direct Marketing to Try Face to Face Direct Marketing Definitions and Goals Direct Marketing Ecommerce and the Examples To Define Direct Mail Advertising and Its Types strategic planning … Nothing affects a school district more than its ability to create and execute a strategic plan. It’s hard to overestimate the importance of clear communication that promotes the strategy with a common, proprietary vocabulary. In a fast-moving tech sector, five years could be too long even for the long term. The right questions should be neither too broad (“How do we save the world?”) nor too narrow (“How do we price the next new product?”). And incentives for key players should be tied to these metrics and goals. We tend to try to squeeze strategic … It was a vision for the future around which they could then align the organization for a multiyear journey. The same inputs lead to similar conclusions. How might megatrends, including technology advances and demographic shifts, alter the business environment? Publication year: 2016 Strategic planning is one of the least-loved organizational processes. A strategic planning process identifies strategies that will best enable a nonprofit to advance its mission. Examples of MassMutual’s 2020 aspirational goals … Investments in several areas can help avoid that fate. Having a great strategic-planning process is … Question-driven strategic dialogue is inherently an iterative process—even when it occurs on an annual basis. Even if their personal ideas aren’t adopted, they will feel heard, understand the rationale for the chosen strategy, and be prepared to support its execution. The classic story goes as follows. The long term is also a great perspective from which to consider how to project skills and brand into new domains. In this 60 minute training, we will share best practices you can use to create a #StrategicPlan that your whole team can get behind. Although the diagnosis is largely right, the prescription is wrong. Six Key Questions in Strategic Planning Jan 24, 2019. Will the company’s traditional sources of advantage remain strong or be compromised? BIC a good example: it recognized that its capabilities positioned it to be not just a pen company but a broad-based disposable-device company, a realization that created the foundation for its move into lighters, shavers, and more. ... best-practice … Strategy newsletter; 4 4… Whether you’re creating a new strategic plan from scratch or you’re trying to breathe life into an old plan, I bet we can both agree that healthcare strategic planning is a tough process. Strategic planning is one of the least-loved organizational processes. Some even argue that strategic planning is a relic that should be … The same inputs lead to similar conclusions. Matrix Organizations. The process continues downward. Invest in Execution and Monitoring. These can certainly be useful, but learning a new process each year adds a lot of overhead and repeating any exercise too soon is pointless. In short, the problem isn’t strategic planning. By Cara Ong. The memo charges them to write their own version for their team that expresses the strategy and what it means for their slice of the organization. All rights reserved. Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. Some sessions may focus on a deep dive into a critical initiative, for example, whereas others may concentrate on exploring an emerging threat, a new competitor, or a disruptive business model. But it is also quite useful because the new analyses uncover new ideas and stimulate valuable dialogue. The teams will design novel relevant analyses, amass new knowledge, and develop new recommendations. The second approach starts with … As noted management consultant and writer Peter Drucker once said, “The most common source of mistakes in management decisions is the emphasis on finding the right answer rather than the right question.”, Great strategists—and great business leaders—have to learn the “art of questioning.”. When going broad, the strategy team still has a critical role as orchestrator. Four Best Practices for Strategic Planning. Each initiative needs to be properly chartered, staffed, and resourced and given a clear timeline. Strategy execution is drawing a lot of attention these days, but that in no way means companies have abandoned their time-tested strategic planning processes. Leadership memorialized the strategy with a simple chart that showed share of wallet on the y-axis and wallet size on the x-axis. They focus on analyzing the current market and current competitors, rather than searching for or anticipating disruptive new entrants or business models. It may take more than one cycle to address a question fully. ... AMA's Ask The Experts: Top Project Management Professionals Discuss Virtual PM Best Practices; View all Posts from this Blog. It’s that most companies lack an effective strategic-planning process. The other half—translating the strategy into results—can be even harder, particularly when the new strategy involves moves outside the core. But far too many strategic-planning processes fall short—they make work but don’t offer insight. The company Nespresso was born this way. Mission Statement. Each needs to build a multiyear strategy, but how can the company ensure that the dots connect in the end? Joint Ventures, April 14, 2016  Prepare •Convene a project team and review desired outcomes; check assumptions 2. Posted on May 5, 2016 May 5, 2016 marvinsi Posted in Uncategorized. Recruit •Outline the approach for face-to-face engagement and story gathering 3. K.ePšLßҎlR9¢Ç¥Eµª®tUoëÑCøI/ Ê—Knœ {éæÉSD0- Ÿ¡ûºf–Éi΢2¢€ðÊaE3tF&ÜM7. At each stage, the strategy group reviews the memos for clarity and consistency with the overall strategy. At any level, formal strategic planning typically follows four high-level steps: Generate insights; Develop opportunities; Prioritize… Strategic planning is one of the least-loved organizational processes. Once a small entrepreneurial project nurtured within Nestlé, Nespresso became a worldwide success—but only after it was set up as an independent unit. Increasingly, we see companies pursuing an approach we call “always-on strategy,” which typically takes the form of monthly strategy reviews by the executive committee. 4 Strategic Plan Implementation Best Practices. However, the most common complaint we hear from nonexecutive directors (and boards in general) is that they are not sufficiently engaged in the strategy process to play a truly valuable governance role. One good practice is to include directors in the questioning phase and in specific conversations along the “W” process described above. It starts with the CEO sending to direct reports a one-page memo that summarizes the strategy. As a general rule, organizations that engage a broad group of internal and external stakeholders in their strategy development efforts yield better results than organizations that leave strategy in the hands of a small, central team. Going broad prevents groupthink. They explore strategy at distinct time horizons. Much of the frustration expressed about strategic-planning processes arises when companies try to address the long, medium, and short terms through a single, inflexible process. Acknowledgements. By focusing a standard process on new questions, the strategic dialogue will remain rich, because participants will have new analyses to consider and fundamentally different ideas to discuss. Family Businesses. Rather, they should help managers stretch their thinking beyond the current boundaries of their day-to-day activities. Far too many strategic-planning processes fall short. In many ways, family businesses are businesses like any other, but inevitably their strategic-planning process needs to include the family dimension. Failure in strategic planning can be disastrous. Don’t give up on extending a donor relationship … After a few years, the new process Nearly one-tenth of public companies disappear each year—a fourfold increase in mortality since 1965. Today’s new and intuitive digital tools make it possible to have a real-time and “clickable” view of critical strategic variables that drive performance against plan. 1 March 2016. © Boston Consulting Group 2020. Progress reviews and “pressure tests” should have a regular place in the executive committee’s monthly always-on strategic dialogues. explores best practices of workforce planning across a variety of Federal, state, and private industry organizations known for successful workforce planning. Sometimes, organizational independence is necessary as well. In most companies, if you ask ten managers one level below the executive committee to describe the company’s strategy in a couple of sentences, you get a set of responses that are not fully aligned. Particularly in today’s turbulent competitive environments, a well-chosen extended strategy team can be a powerful early-warning system. Four Corporate Communications Best Practices To Learn From GE. The strategy department typically plays the role of process manager, providing support and keeping the team on course. For the better part of a year, they collect financial and operational data, make forecasts, and prepare lengthy presentations with the CEO and other senior managers about the future direction of the business. After a few years, the new process feels just as uncreative and bureaucratic as the old one. Some companies have attempted to change the process every year, designing different exercises for managers. (See the left side of Exhibit 2.) The best practices outlined in this report may need adjusting in certain special situations. In the first year, it is a big, painful effort. What strategic risks and opportunities are revealed when considering future scenarios? They make work but don’t offer insight. Once the right questions are selected, the leadership team can let go, knowing that the teams are working on the right issues. A healthcare organization's strategic plan is designed to identify the necessary actions needed to reach the objectives of the organization. 1 1. Another powerful way to encourage the organization to embrace the new strategy is to identify quantitative metrics and goals that can measure progress. A few months later, managers look back and realize that, despite best intentions, the pressure of day-to-day operations and organizational inertia have kept them from making measurable progress on the new strategy. One common order is product plans (with input from key countries), geography, and then function. Executives at most companies criticize it as overly bureaucratic, insufficiently insightful, and ill suited for today’s rapidly changing markets. They called the strategy “go north.” The phrase became an important element of the company’s internal language—almost a rallying cry. Next, you need to work out a timeline in which you can complete your strategic plan and move through the process. Some companies even engage outsiders, among them customers and suppliers, in the process. Beyond simple slogans, the classic cascading-memo exercise can also be quite powerful. This thought process needs to cover issues like the balance of the portfolio—and the synergies across the group, whether soft synergies such as training and talent sharing or hard ones like cross-selling and shared services. Faced with those odds, it doesn’t make sense to put all your chips on agility. organisations with portfolio diversification. and 20,000 other business, leadership and … HR has become an invaluable resource itself, working hand in hand with top-level management to create a cohesive, organization-wide strategy. Another emerging approach is to leverage big data and advanced analytics for systematic market intelligence, including information that is hidden in unstructured data or local languages. An all-too-familiar story: A company spends productive time exploring exciting strategic options and making clear choices. Each has different goals and requires different approaches, a different frequency, and the involvement of different people. Four Best Practices for Strategic Planning Nicolas Kachaner, Kermit King & Sam Stewart The Boston Consulting Group (BCG) April 2016. FOUR STRATEGIC PLANNING BEST PRACTICES Strategic planning, in its simplest form, includes four best-practices: Document where you are today (current-state) on 7 key firm vitals (see this post). Leveraging a diverse group of stakeholders improves an organization’s strategic “peripheral vision.” The best strategists are adept at spotting both opportunities and risks early—which provides a valuable head start over rivals. Executives at most companies criticize it as overly bureaucratic, insufficiently insightful, and ill suited for today’s rapidly changing … With nearly one-tenth of public companies disappearing each year, it’s clear that companies need to devote time to strategy. Leverage the Organization’s Purpose. It’s the forum to challenge and redefine the boundaries of the market and the rules of the game. Particularly for strategies that involve adjacent moves or new business models, initiatives may not have a natural organizational home. In the second year, the process is less painful, because most analyses can simply be adjustments of last year’s analysis—but, typically, it is also much less use-ful. (See the right side of Exhibit 2.). Four Best Practices for Strategic Planning. Allow time for big picture, strategic thinking. Complementing the organization’s financial and operational metrics, the strategy metrics should concentrate on new measures tied to the new strategy. Some even argue that strategic planning is a relic that should be relegated to the past and that organizations seeking to prosper in turbulent times should instead invest in market intelligence and agility. Successful realization of the strategy would be tracked by upward movement on the chart over time. Here are four key agenda items that work in any Strategy Review. Heres what we know about strategic planning in education including a brief histo… It doesn’t have to be that way. One organization that adopted a strategy to increase its share of wallet with individual clients found a way to sidestep the risk of misalignment on strategy. Good practices abound. What are the goals and long-term aspirations of the family? Define goals and aspirations. The key is to match the rhythm of the process to the “body clock” of the sector. Conglomerates. Tag(s): Strategy Development, Strategic Planning, Strategy Execution, Strategic Dialogue. Breaking out of this kind of cycle is challenging. Engaging stakeholders early also increases buy-in and smooths implementation. BCG was the pioneer in business strategy when it was founded in 1963. One is to have the leadership team engage in a strategic workshop to articulate and prioritize—but not debate—the key questions that the company will have to answer in the next three to five years. Growth, He or she interviews the executive team and hears about the pain points in the process: too much work, not enough big ideas; too financially oriented, too inward looking. For a sector like mining, a ten-year horizon for the long term could be just right. It should drive the process, set timelines, coach teams on methodology, ensure the sanctity of proprietary information, and generally facilitate and coax the dialogue toward an organizational consensus. Agility is great, but it’s more powerful when paired with preparedness. If you refresh your strategic plan every year, you might be able to work through this process in 4 … But they also need to orchestrate a complementary thought process about the value each business adds to the overall corporation. Such an approach breaks the compromise between process efficiency and fresh thinking. One year—to use a famous dot-com-era example from General Electric—it’s “destroy-your-business.com.” The next, it’s a search for underleveraged assets. Reasonable is the key word here, as that depends on your organization’s maturity level with regard to strategic planning. Strategic planning is one of the least-loved organisational processes. A good strategic plan can improve student outcomes, keep great teachers and enhance the reputation of district leadership. The purpose of long-term strategic thinking should be to define, validate, or redefine the vision, mission, and direction of the company. But if … All qualified applicants will receive consideration for employment without regard to race, color, age, religion, sex, sexual orientation, gender identity / expression, national origin, protected veteran status, or any other characteristic protected under federal, state or local law, where applicable, and those with criminal histories will be considered in a manner consistent with applicable state and local laws. ’ t make perfect arise and give the organization overall understand that these initiatives are priorities for the executive.! Strategy would be tracked by upward movement on the chart over time can improve student outcomes, keep teachers. Don’T offer insight other business, leadership and … Here are four key agenda items work. The challenge stimulate valuable dialogue side of Exhibit 2. ) for strategies that will Best a... For strategic planning: they explore strategy at... 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S ): the long term is also a great strategic-planning process how can the ensure... On the x-axis like mining, a well-chosen extended strategy team still a! Team on course out of this kind of thinking considering future scenarios on an annual basis,! Tackle their most important challenges and capture their greatest opportunities mental capacity strategic planning to the... Than five years into the future in 1963 to create and four best practices for strategic planning a strategic planning one! How can the company ensure that the dots connect in the questioning phase and in conversations. A simple chart that showed share of wallet on the x-axis powerful way to encourage the organization to the. Practice doesn ’ t make sense to put all your chips on agility but to refresh it different. 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