Companies have many different processes for strategic planning and strategic execution. These processes are designed to move a company from its current state to a predefined future state. Irrespective of a company’s size, the processes they follow they all need to have the following 8 key components.
- Robust Process: Hope is not a strategy! Strategy development takes time and energy, and it is important that the time and energy expended by the company is not wasted with unnecessary activities and analysis. Development of an effective strategy is not difficult if it follows an appropriate process. The process needs to be robust and holistic.
- Inclusion: Strategic planning cannot be done in a vacuum. It needs to be done by teams of people who participate in the discussion and have input to the strategy. Inclusion of all stakeholders (BOD, employees, contractors, suppliers, customers) is part of the change management process which is a critical part of strategic execution.
- Sequence: Strategic planning and strategic execution has a sequence of building blocks that provide direction to the planning teams along each step of the process. These building blocks and their sequence are as follows in the Business Hierarchy of Needs: It is important to recognize that strategic planning is an iterative process that occurs over a 6–12-week period, so as each iteration occurs, the sequence needs to be repeated.
- Mission/Vision/Values/Leadership Traits: These are the fundamental building blocks. Many organizations create them, don’t pay any attention to them and never change them. Markets change, competition changes, leadership changes and the Mission – Vision – Values – Leadership Traits of a company need to reflect current reality and future needs of the company and the markets it serves.
- Planning and Research: Once the goals and objectives are defined, and assuming they aren’t impossible, cross functional teams now need to research markets, evaluate financial performance, update product roadmaps, evaluate supply chain efficiency, review organization structure, close strategic and operating gaps, leverage technology, etc. Once that is complete, as shown in the Business Hierarchy of Needs® structure above the teams need to evaluate the company’s ability to implement their objectives and close strategic gaps, operating gaps and organizational gaps. There is also a process and sequence to research and planning. Ultimately, when this step is done and reviewed through multiple iterations, there will be a well thought through strategic plan and clearly articulated objectives that have been cascaded down through the organization.
- Goal Setting: We often get push back on setting One Most Important Goal. The argument goes like this: How can I set goals if I don’t have a plan? The plan rolls up to the financial targets and those are the goals. My response to this is that there needs to be one clear goal for the company and everything in the strategic plan is built to support that. The Most Important Goal is set by the board and senior leadership. This sets the stage for what the various functional teams need to work toward. It is far easier for me to work with a team when I know that the board has a goal of 20% per year growth. In my view, the Most Important Number drives the plan and not the other way around.
- Accountability: Clearly defined goals and a vetted strategic plan should be the basis for all decisions made at a company. Every stakeholder should be able to talk about their role in helping the company achieve their strategic objectives. If they can’t, then they have their focus somewhere else. Each stakeholder should be accountable to a set of objectives that support the company’s top-level strategic objectives. Without that accountability, there is a high probability that the company will fail at strategic execution.
- Execution: Executing a strategic plan is hard work for several reasons:
- It requires continual focus on strategic objectives that are likely to change during the plan’s life.
- In most companies, senior leadership is consumed with “working in the company” rather than “working on the company”.
- It may require making hard decisions.
- Requires accountability.
The strategic execution process needs to have tools that allow everyone to communicate with each other on the status of the implementation of the company’s strategy. Many companies meet once a quarter to discuss strategy which doesn’t provide enough “work on the company” time. While quarterly updates of the status of a strategy’s implementation are important, they should be focused on making decisions about the company’s strategy and agreeing on changes in course. The strategic execution process needs to be robust enough to keep everyone focused and to routinely engage them in “working on the company” in sprints. In our work with clients, we recommend monthly strategy execution reviews and often focus on market facing activities one month and value-added activities the next month, reducing the reporting load and making the process more robust.
At Group50, we use a series of methodologies and tools in our strategic planning processes. We would enjoy speaking with you about these tools and our process as you think about the implications of including these components in the strategic planning and strategic execution processes.
About the Author: Jim Gitney is the CEO and Founder of Group50® Consulting, and the author of “Strategy Realized – The Business Hierarchy of Needs®” which summarizes a framework for developing and implementing a robust strategic plan (You can find out more about the book and acquire a copy by clicking on the image to the right).
Founded in 2004, Group50®consulting is focused on working with middle market companies to significantly improve their execution of strategy and stakeholder engagement by leveraging people, process and technology as part of a company’s strategic plan. Strategic planning, supply chain, and operations are Group50® specialties. Group50® consists of consultants who have spent their careers in corporate America learning how to optimize businesses. We specialize in working with senior leaders to develop and implement programs that leverage people, process and technology to optimize business performance.
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