At any level, formal strategic planning typically follows four high-level steps: Generate insights; Develop opportunities; Prioritize… When the company’s dominant core model is potentially dissonant or even competitive with the new opportunity, the best way to drive a successful result is to insulate the new effort from the core, to give it time and space to find its footing. Research •Gather and compile community data, feedback, and useful information 5. explores best practices of workforce planning across a variety of Federal, state, and private industry organizations known for successful workforce planning. 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. More than ever, companies need to devote time to strategy. 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. It’s hard to overestimate the importance of clear communication that promotes the strategy with a common, proprietary vocabulary. Although there is no one-size-fits-all approach to strategic planning, we have found that the companies that get the most benefit from their strategic-planning activities have four things in common: It is important to think about strategy at different time horizons. 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. Agility is great, but it’s more powerful when paired with preparedness. We tend to try to squeeze strategic … All rights reserved. By involving people from different backgrounds, generations, and geographies, an organization is more likely to surface alternative ideas and perspectives. Some iteration will inevitably be necessary, but in our experience linearizing simplifies the process. And how can the business strategy best be harmonized with them? One year—to use a famous dot-com-era example from General Electric—it’s “” The next, it’s a search for underleveraged assets. 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. It is important that initiative teams and the organization overall understand that these initiatives are priorities for the executive committee. Far too many strategic-planning processes fall short. Four Best Practices in Strategic Planning. Define goals and aspirations. But with nearly one-tenth of public companies disappearing each year, it's clear that companies need to devote time to strategy. For a sector like mining, a ten-year horizon for the long term could be just right. A new chief strategy officer is appointed. Access a free summary of Four Best Practices for Strategic Planning, by Nicolas Kachaner et al. and 20,000 other business, leadership and … K.ePšLßҎlR9¢Ç¥Eµª®tUoëÑCøI/ Ê—Knœ {éæÉSD0- Ÿ¡ûºf–Éi΢2¢€ðÊaE3tF&ÜM7. Nothing affects a school district more than its ability to create and execute a strategic plan. Allow time for big picture, strategic thinking. Four Best Practices for Strategic Planning. What new opportunities could arise and give the organization an opportunity to win? While a vision describes how you view your business to your … The long term is also a great perspective from which to consider how to project skills and brand into new domains. 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. Tag(s): Strategy Development, Strategic Planning, Strategy Execution, Strategic Dialogue. Acknowledgements. They make work but don’t offer insight. Four Best Practices for Strategic Planning Nicolas Kachaner, Kermit King & Sam Stewart The Boston Consulting Group (BCG) April 2016. Some companies have attempted to change the process every year, designing different exercises for managers. (For example, when Procter & Gamble decided to embrace open innovation in 2003, the CEO set a target of 50% of innovations sourced from outside the company.) They are constantly reframing their strategic context, thinking of new goals, initiatives, ways of organizing, etc. Leverage the Organization’s Purpose. Such an approach breaks the compromise between process efficiency and fresh thinking. 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. Four Best Practices for Strategic Planning, Die Another Day: What Leaders Can Do About the Shrinking Life Expectancy of Corporations. The second approach starts with … Many companies have at least a three-dimensional matrix: for example, brands or product lines, geographies, and functions. ... AMA's Ask The Experts: Top Project Management Professionals Discuss Virtual PM Best Practices; View all Posts from this Blog. Having a great strategic-planning process is … Ideally, as staff and board engage in the process, they become committed to measurable goals, approve priorities for implementation, and also commit to revisiting the organization’s strategies on an ongoing basis as the … organisations with portfolio diversification. Philips’s decision to shift its focus from consumer electronics to the health care sector is an example of this kind of thinking. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact. A strategic planning process identifies strategies that will best enable a nonprofit to advance its mission. The teams will design novel relevant analyses, amass new knowledge, and develop new recommendations. Invest in Execution and Monitoring. Growth, 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. 6 Four Best Practices for Strategic Planning dialogue. How might megatrends, including technology advances and demographic shifts, alter the business environment? By Fouad Bendris. Move down the organization and the signal-to-noise ratio progressively degrades. Start with the Strategy Map – Before you discuss metrics, targets, actuals, variances, financials, stretch targets, percentages, project plans, line items, action items, and any and all things quantitative, take a quick look at this simply color-coded one-ager. Six Key Questions in Strategic Planning Jan 24, 2019. Particularly for strategies that involve adjacent moves or new business models, initiatives may not have a natural organizational home. The company Nespresso was born this way. Good practices abound. Reasonable is the key word here, as that depends on your organization’s maturity level with regard to strategic planning. A more sustainable solution is to follow the same process year to year but to refresh it with different questions each year. Nearly one-tenth of public companies disappear each year—a fourfold increase in mortality since 1965. It doesn’t have to be that way. Define a vision for where you want to be in five years (future-state) on those vitals. Four Corporate Communications Best Practices To Learn From GE. It’s about projecting more than five years into the future. 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. Four best practices for strategic planning Abstract. They focus on analyzing the current market and current competitors, rather than searching for or anticipating disruptive new entrants or business models. Boston Consulting Group is an Equal Opportunity Employer. BCG was the pioneer in business strategy when it was founded in 1963. The year after that, it’s a business-model-reinvention exercise. 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. This approach not only helps managers get their heads around the new direction (the act of creating a written synthesis forces concentration and drives alignment) but also pinpoints areas of the organization where the strategy is not well understood—before that misalignment has a chance to affect performance. 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. Here are four key agenda items that work in any Strategy Review. Matrix Organizations. Joint Ventures, April 14, 2016  They constantly reinvent and stimulate the strategic dialogue. And the life span of the average company has halved since 1970. By emulating the four strategic-planning best practices, you can boost the ratio of insight to effort and align the organization around a strategy that is faithfully executed, constantly questioned, and regularly refreshed. With nearly one-tenth of public companies disappearing each year, it’s clear that companies need to devote time to strategy. Four Best Practices in Strategic Planning Tag(s): Strategic Dialogue , Strategic Planning , Strategy Development , Strategy Execution Understanding the Role of the Chief Strategy Officer Optimizing human and machine roles enables companies to act more quickly and effectively in the face of changing market conditions. 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. Create department champions to promote engagement and buy-in; 2 2. 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. In these cases, it is essential to have a strong executive sponsor and clear funding sources. Clearly, long-term vision, medium-term strategy, and short-term plans need to be revisited with different frequencies—and those frequencies need to reflect the particulars of the sector. 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 … At each stage, the strategy group reviews the memos for clarity and consistency with the overall strategy. Four Best Practices for Strategic Planning Strategic planning is one of the least-loved organizational processes. Most strong CEOs and leaders spend a large portion of their mental capacity strategic planning. The same inputs lead to similar conclusions. Recruit •Outline the approach for face-to-face engagement and story gathering 3. Mission Statement. Question-driven strategic dialogue is inherently an iterative process—even when it occurs on an annual basis. Lunch and learn sessions; 3 3. Nonexecutive directors—who are charged with bringing an outside perspective to evaluating and approving the company’s strategy—can play a powerful role too. Strategic planning is one of the least-loved organizational processes. A good strategic plan can improve student outcomes, keep great teachers and enhance the reputation of district leadership. Leading companies often think of strategy at three time horizons (see Exhibit 1): The Long Term. (See the right side of Exhibit 2.). Each needs to build a multiyear strategy, but how can the company ensure that the dots connect in the end? 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). An all-too-familiar story: A company spends productive time exploring exciting strategic options and making clear choices. Design •Prepare for quantitative (and more qualitative) data gathering 4. 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. 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. If you refresh your strategic plan every year, you might be able to work through this process in 4 … 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. Strategic Planning, 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. The best practices outlined in this report may need adjusting in certain special situations. In many ways, family businesses are businesses like any other, but inevitably their strategic-planning process needs to include the family dimension. It’s important to limit the number of questions to two or three per business unit or department. Rather, they should help managers stretch their thinking beyond the current boundaries of their day-to-day activities. After a few years, the new process feels just as uncreative and bureaucratic as the old one. But far too many strategic-planning processes fall short—they make work but don’t offer insight. After a constructive dialogue (shown at the middle of the W in the exhibit), the leadership team selects from among the options and sends management back to develop detailed plans, which are then discussed and approved in a second meeting. The classic story goes as follows. Having a great strategic-planning process is only half the challenge. When going broad, the strategy team still has a critical role as orchestrator. Progress reviews and “pressure tests” should have a regular place in the executive committee’s monthly always-on strategic dialogues. And incentives for key players should be tied to these metrics and goals. Sometimes, organizational independence is necessary as well. Complementing the organization’s financial and operational metrics, the strategy metrics should concentrate on new measures tied to the new strategy. Strategic planning is one of the least-loved organisational processes. Investments in several areas can help avoid that fate. The purpose of long-term strategic thinking should be to define, validate, or redefine the vision, mission, and direction of the company. 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. One common order is product plans (with input from key countries), geography, and then function. Of course, the success of this approach depends heavily on the quality of the questions. 4 Strategic Plan Implementation Best Practices. Four Best Practices for Strategic Planning. Beyond simple slogans, the classic cascading-memo exercise can also be quite powerful. Executives at most companies criticize it as overly bureaucratic, insufficiently insightful, and ill suited for today’s rapidly changing markets. Best Practices Reports in the community association industry. Once a small entrepreneurial project nurtured within Nestlé, Nespresso became a worldwide success—but only after it was set up as an independent unit. Failure in strategic planning can be disastrous. 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. Long gone are the days when the Human Resources department focused solely on recruiting employees. Looking forward, the company’s executives could see that an aging population and the fitness trend would provide strong tailwinds for a change in course toward the health care sector, while continuing commoditization would leave the traditional consumer electronics business at best becalmed. The authors describe how successful companies achieve better strategic planning: They explore strategy at... Keywords. Some even argue that strategic planning is a relic that should be … In the first year, it is a big, painful effort. The cascading memo can help, but it’s often helpful to “linearize the matrix”—that is, to start with one dimension and use its output as input for the next dimension. A healthcare organization's strategic plan is designed to identify the necessary actions needed to reach the objectives of the organization. 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. What are the goals and long-term aspirations of the family? 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. A Strategy Dashboard to Highlight Success Metrics. In a fast-moving tech sector, five years could be too long even for the long term. These best practices are evaluated against the primary components of general workforce planning methods – Strategy, ... best-practice … But if … 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. 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?”). 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. It’s that most companies lack an effective strategic-planning process. It’s the forum to challenge and redefine the boundaries of the market and the rules of the game. Executives at most companies criticize it as overly bureaucratic, insufficiently insightful, and ill suited for today’s rapidly changing markets. The other half—translating the strategy into results—can be even harder, particularly when the new strategy involves moves outside the core. (See the left side of Exhibit 2.) Breaking out of this kind of cycle is challenging. Most businesses practice strategic planning annually, but the best ones do it more frequently, such as twice a year or even quarterly. Multibusiness companies need, of course, to go through a thoughtful strategy development process for each business. 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 doesn’t have to be that way. Will the company’s traditional sources of advantage remain strong or be compromised? Clear and Engaging Communication to Foster Alignment. 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. What strategic risks and opportunities are revealed when considering future scenarios? Examples of MassMutual’s 2020 aspirational goals … Once the right questions are selected, the leadership team can let go, knowing that the teams are working on the right issues. 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. Heres what we know about strategic planning in education including a brief histo… Conglomerates. 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. A new process is designed that calls for new analyses to describe the market, competitors, and external trends. Generally, it is important to include key family shareholders in the planning process. One good practice is to include directors in the questioning phase and in specific conversations along the “W” process described above. Family Businesses. The development and execution of strategic plans is a well-thought-out plan performed in three critical steps: Executives at most companies criticize it as overly bureaucratic, insufficiently insightful, and ill suited for today’s rapidly changing … 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. At the same time, powerful analytics increasingly allow you to automate many first-level analyses. 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. The same inputs lead to similar conclusions. By Cara Ong. Don’t give up on extending a donor relationship … Strategy newsletter; 4 4… It starts with the CEO sending to direct reports a one-page memo that summarizes the strategy. Posted on May 5, 2016 May 5, 2016 marvinsi Posted in Uncategorized. The key is to match the rhythm of the process to the “body clock” of the sector. Although the diagnosis is largely right, the prescription is wrong. High-Profile Strategic Initiatives to Build Traction. (For a glimpse of scenarios that require special consideration, see “Three Special Cases.”). 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. Each has different goals and requires different approaches, a different frequency, and the involvement of different people. After a few years, the new process But they also need to orchestrate a complementary thought process about the value each business adds to the overall corporation. Engaging stakeholders early also increases buy-in and smooths implementation. When key managers at multiple levels are involved in the strategy process, they are more aware of the strategy and they feel ownership of it. 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. Strategic planning is one of the least-loved organizational processes. (See “Die Another Day: What Leaders Can Do About the Shrinking Life Expectancy of Corporations,” BCG article, December 2015.) A critical element in effective strategic … 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. Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. 1 1. In short, the problem isn’t strategic planning. Related Expertise: They called the strategy “go north.” The phrase became an important element of the company’s internal language—almost a rallying cry. It was a vision for the future around which they could then align the organization for a multiyear journey. Particularly in today’s turbulent competitive environments, a well-chosen extended strategy team can be a powerful early-warning system. The strategy department typically plays the role of process manager, providing support and keeping the team on course. Prepare •Convene a project team and review desired outcomes; check assumptions 2. Another powerful way to encourage the organization to embrace the new strategy is to identify quantitative metrics and goals that can measure progress. 1 March 2016. Successful realization of the strategy would be tracked by upward movement on the chart over time. 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. It may take more than one cycle to address a question fully. In conference rooms everywhere, corporate planners are in the midst of the annual strategic-planning process.