The notion of planning fell out of fashion about two years ago – after all, business models and technologies were shifting at such speed, how could you plan anything effectively? In the past six months there’s been a rebirth of interest in how you can plan effectively in an e-world. The following are some points to keep in mind.
Understand Multiple Horizons. In most businesses, it is useful to think about different types of horizons. First there is the time horizon – long and short term. For longer-term horizons, use strategic aspirations and maxims. Shorter-term horizons are about tactical plans and actions.
A second type of horizon is the business horizon – where are you compared to competitors, ahead or lagging? How mature is your business model – fixed, emerging or working to integrate acquisitions? And what does this mean for your current investment climate?
Third, what type of technology horizon are you in – a greenfield site, a new business with many options, or an established business with a mix of legacy and ‘crafted on’ systems? How e-enabled are you really? How big is the task ahead of you?
Understanding and articulating these multiple horizons in the executive team is a sound first step to a shared reality base.
Concentrate Planning Efforts, Then Continue To Iterate. The elapsed time for any type of planning effort should be no more than three months, then iterate and treat any emerging documentation as ‘work-in-progress’. Planning is a continuous process. You need to ‘sense and respond’ in your internal processes as well as with customers.
Work on one or two high-value or high-impact processes to start testing assumptions and approaches. Then feed back this learning as part of the strategy iteration and to accelerate subsequent moves.
You should try for 80% of the benefits of planning, with 20% of the possible effort. Use the data you have or can get easily, rather than undertake extensive data collection. Rapid planning requires those with the best insights to do the planning, which may mean the people closest to a market, partner or supplier. This leadership responsibility can’t be delegated.
Lay Out A Strategic Envelope. Successful organizations that have harmonized long- and short-term horizons have some form of strategic envelope identifying strategic aspirations and assumptions. Successful strategic envelopes allow for ‘granularized’ strategies for different market segments, geographies and cultures.
Aspirations Frame The Context. Achieving aspirations requires voicing and communicating them, especially in large organizations with dispersed work forces.
Scenario Planning Sets The Boundaries. The route to achieving aspirations can take many paths. A single view of the future is always risky. Scenario planning allows organizations to develop several plausible scenarios or pictures of the future, and to consider the potential consequences of each.
The objective is not to predict which scenario will occur, but to understand the underlying forces that drive the future. Making these forces explicit creates an early warning system so you can spot and respond to subtle shifts in market drivers before your competitors. The fallout from no ‘Plan B’ is now evident in too many firms.
Business Maxims Clarify Focus. Business maxims are a series of short statements expressing the shared future focus of the business in actionable business terms. Using aspirations and business maxims, the future can be tracked (and created) as it unfolds.
Smart Planning Leads To Better Synchronization. While planning, there are many forces over which you have little control, and each of these represent critical inputs. You will never get ‘alignment’ – it is no longer the best way to think of integrating business and technology. Instead, think of the role of business leaders as managing these different tensions with the goal of synchronizing the speeds as well as possible. The executive who bears perhaps the biggest challenge in this area is the CIO.
Professor Sampler from London Business School suggests that managing these tensions is really what the role of CIO is about. This of course gives rise to a new perspective of the CIO as Chief Tension Officer, which is probably not such a bad description of how many CIOs feel!
Dr Marianne Broadbent is Group Vice President and Global Head of Research for Gartner’s Executive Programs.
