Effectiveness of Strategic Planning

Connecting the other elements of Strategic Planning

Having studied the importance and the proximal benefits of the process of Strategic Planning, it is time to do a reality check on the value it brings to an organization. One we have the strategy for the organization in place, what are the components that can help make strategic planning deliver results.

Broadly speaking the components are: Implementation of Planning, Decision making plans, role of top management, human motivation

Implementation

How the strategic planning is implemented: this can be seen in terms of communication of the strategy, capability of the strategy to align the organization with itself and measure the performance of the professionals with its ideals.

• Communication: The common ways to communicate the strategic planning (which is usually created by a group of senior managers of a firm) is through town hall meetings and emails. Communication helps in cascading the information in forms of clear “to-do” objectives. As employees identify the “why” behind their individual objectives, they associate with the company and its strategy better, which does get reflected in performance.

• Alignment: It is difficult to generalize the extent to which strategic planning needs to align the organization with itself. Details of the strategy, in most cases need not be clear to the whole company. Executives, as per a survey, felt that planning works best when teams are aware of the part of that part of strategy for which they have to initiate and create deliverables.

• Tracking and Accountability: Tracking and accountability of the process of planning is as important as the process itself. Reviewing of the strategic plans usually happens during monthly meetings or quarterly reviews. More often than not reviewing is dominated in terms of financial metrics or in terms of strategic scorecards (which cover quantitative metrics and qualitative initiatives)

Executive’s engagement in planning discussions

The success of a planning exercise highly depends on the buy in it gets from the various top managers. Usually executives engage themselves in the planning exercise only when issues pertinent to them are being discussed or when some high level plans important to business as a whole are being talked of. In such situations, the relationship of the strategy group with the senior members of the organization is important. Strategy can emerge to effective only when the executive biases are taken care of. This is important not only in the discussion phase, but in the implementation and the control phase as well.

Decision making plans

The end result of the process of planning is not “plans”. It has to go beyond making plans and has to focus on delivering tangible decisions. However boards and executives shy away from decision making, as the decisions more often than not relate to highly complex and controversial issues. Hence, managers feel safe and secure in thinking of them rather than preparing or doing something about them.

Role of top management

To make outcomes of planning effective, the top management cannot confine itself to the process of making plans, but also have a mechanism in place to review the plan. The leadership, enthusiasm and commitment of the top executives are of utmost importance.

Human Motivation

The developing and implementing strategies is ultimately the responsibility of line manager and strategic decision makers should be awarded

Therefore these elements of planning need to be given as much importance as the process of planning itself. It is only with the synergy of these factors that the distal benefits of planning can be thought of being achieved.

There is a video that I came across from youtube, that talks of the effectiveness in strategic planning:

References:

1. “How to improve strategic planning”, McKinsey Quarterly, 2007, Renee Dye and Olivier Sibony

2. “The malaise of strategic planning”, McKinsey Quarterly, 2007