11 Jun 2021
Most companies I visit have spent quite some time putting together a strategy. These will typically include mission and vision statements plus some key themes outlining what needs to be done to succeed in the marketplace and grow the business. The strategy is usually pulled together by the senior leadership team through a series of offsite workshops and finally signed off by the team and the board. It may or may not be shared with the wider business.
In too many cases, that is where it ends. A shiny document has been produced and six months to a year later will often be found gathering dust in the senior leadership teams’ filing cabinets. Or in this digital age – in folders marked “strategy” on their computers, unopened for months. Other business priorities will have got in the way, or perhaps circumstances have changed, causing the senior team to be diverted into the short term and take their eye off what needs to get done to deliver the long-term goals.
Rinse and repeat next year.
This is quite unfortunate. All that time and effort has gone to waste. The strategy may have been great, or it may have been mediocre, but it hasn’t been deployed so, we will never know what worked and what could be tweaked and improved next time around.
So how do high-performing companies ensure their strategies are effectively deployed?
Since the mid to late ‘90s, leading companies have been using a monthly Integrated Business Planning process to connect to their strategies and ensure they are effectively deployed. Indeed, at Oliver Wight we say that the purpose of IBP is to deploy strategy in an ever-changing world.
This sounds great, but it does require some conditions to be in place.
First, the IBP process must exist. It cannot simply be old-style supply/demand volume balancing S&OP with a new name and financial forecasts. The process must fully integrate all the plans across the organisation – product/portfolio, demand, supply, financial, business improvement, people, etc., and it must have a planning horizon of at least 24 months in order to see emerging gaps in strategic objectives.
Second, the strategy must be defined well enough so execution can be effectively monitored in IBP. The key themes need to be broken down into strategic roadmaps describing the journey with critical success factors to be achieved for each year, programmes of work that will be undertaken over the next five years or so, specific initiatives for the next two years, and KPIs to measure performance. These roadmaps need to be in place for customer and market, product portfolio, supply chain, finance, and people strategies as a minimum and need to be connected to the key themes through defined strategic business objectives with targets to be achieved for each year of the strategy. And don’t forget resource planning - the required resource to deliver the strategy must be identified and available.
With these two conditions in place we now have the mechanism to connect strategy to the IBP process and monitor strategy deployment on a monthly basis. This also provides an early warning mechanism to alert senior management if conditions change significantly and indicate a review of the strategy.
To find out more about how to deploy a successful Integrated Business Planning process, join our IBP: An Executive Guide course in Melbourne in August. Find out more and book here.