The first step in Strategic Planning is to firm-up the answers to the following questions:
- What we will do?
- Why will we do it?
- How will we do it?
- What will define the success?
These questions are answered at two levels -
There are two documents needed for having a complete road-map. They are 'Strategy Blueprint' and 'Strategic Business Plan'. Both of these documents have a merit of their own and are complementary. Though sounding similar they fulfill different objectives.
An organization can perform only when it knows what, why, how & when of things it has to do. The first step is to set the big picture, which we name as 'Strategy Blueprint'. A strategy Blue Print typically covers a horizon of 3-5 years. It takes a 360 degree view of all perspectives and stakeholders linked to the strategy. It dwells upon SWOT (of the company, environment, competition & industry) to come-out with strategies for making the best out of Strengths & Opportunities and managing threats and weaknesses.
Strategic Business plan
Once the Strategy Blueprint is in place, it is time to convert it into next level of detail. Here we reduce the horizon to a year OR less, and translate the blueprint into more detailed business goals and targets.
Communication & Alignment
There is a need of communication and alignment at every stage of development of Strategy Blueprint and Strategic Business Plan. Starting from the CEO and down to a process owner/team leader, every one needs to clear on the strategy, why of the strategy, how it changes their priorities, their life and performance expectations. At the same time, all levels of an organization do not have to understand all perspectives of a strategy. As long as they have an overview of the strategy and how it linked to their work, it should be enough.
Incentives driven by strategy
This is the best way to drive the alignment and successful implementation of strategy. Place the incentives at the right places and money will make the world go in the right direction. Refer Strategic Alignment in Execution Management. Organization needs to watch out the misalignment between the performance management process and the strategy. Therefore, while business planning churns out the business plan, the HR & business heads replicate the previous years incentives and tweak them a little to make them valid for the current year.
Budget & Resources linked to the strategy
An example of mis-match between the strategy and budgets is - Strategy says that customer and sales numbers are more important, but the technology budgets generally are skewed towards back-end capability with low emphasis on field technologies. (the trend However, is changing for last few years). One solution is that business case review should have one section asking 'explain the link to the Strategy Blueprint'
Adequate Individual performance management system
With all the road-maps and blue-prints and alignments, an organization still stays as a group of individuals having their own personal targets and ambitions. Apart from managing organizational performance, an individual performance management is equally important. An organization performs only when success OR failure leads to impact on individual’s feedback, development plans, performance ratings, bonuses and increments etc.
Achieving Leadership Commitment
What is it?
Strategy is process, which is driven from top and engaged with all. A strategy needs and bring a change in culture, attitudes and above all- in beliefs and convictions. Therefore, it is important that people who are responsible for creating and driving the strategy are committed to the process.
Commitment by top leadership means that:
- They will be open to new ideas.
- They will allow a multi-iteration of questioning of their beliefs and conviction.
- They will be thinking from an enterprise as well as their functional perspective.
How will it be done?
Top leadership commitment will be driven by the CEO OR/and the board. We are assuming that the strategy map is being done at an enterprise level.
Most organizations go through some form of business planning. However, it is a typical approach of sales people giving their numbers and production people working out their plans accordingly. it is difficult to get the management think as a unit and come-out with a complete Strategy Blueprint including strategy maps, which run across the functions and processes.
There is no standard way to ensure leadership commitment. It can include teaming, soft & hard incentives and creation of a non-threatening environment etc.