Remember the days when companies kicked off an annual strategic planning event with The Vision slide? A few strategy statements set goals, and quarterly reports showed an unsurprising lack of progress. We’ve come a long way since then. Or have we? The reality is, nearly half of all strategic initiatives fail because companies don’t connect strategy to delivery. Let me repeat. Half of our strategic visions never become reality.
We are acutely aware that the rapidly changing business climate exerts powerful market forces. Technology and strategy, from digital transformation to disruptive innovation to technology convergence to workforce upheaval. Think Amazon Effect. We can’t plan once and be done. The way to stay nimble is to make strategic planning a continuous process that connects your vision to a roadmap for execution and delivery. Without a living strategy, you can go very fast in the wrong direction.
A dynamic strategic plan evolves as initiatives are executed and feedback informs decisions about viable strategies. Planning becomes a continuous exercise where updates are based on what’s happening now, not last month or last quarter.
Consider the insurance industry. Lemonade, the only public benefit corporation in the property and casualty market, smashed the traditional business model with monthly premiums that start at $5 for renters and $25 for homeowners. Lemonade’s technology-driven strategy shakes up the industry with every new product launch. To confront this market threat, competitors need to pivot like a ninja. Waiting for the next planning event could mean loss of market share.
You can visualize your company’s strategy by cascading objectives into the work that needs to be done to make it happen. Strategic roadmaps turn strategy statements into illustrations of what the organization needs to accomplish to deliver the strategy. One of the most critical strategic planning tools you will use, these roadmaps connect strategy to delivery of the programs, projects, products, applications, services, and technologies that need to be developed. Work and resource management solutions allow you to prioritize work and optimize resources. They can provide access to the information you need to pivot the strategy based on market conditions, regulatory changes, competitor launches and technology advances. This gives you visibility into interconnections, so you can see the ripple effects.
Scenarios and trade-offs
When you think about how best to achieve a strategic objective, there are countless options and potential outcomes. You need to choose initiatives that will return the most value. That means creating multiple scenarios, performing what-if analyses and comparing trade-offs in time, cost, risk, margin, value, capacity, competitiveness and other factors. This gets unwieldy if you’re using spreadsheets, worse when they become multiple versions of the truth. Enterprise-class tools create a central source of truth, which makes maximizing value a simpler task.
Here’s an example: the Volvo Group is a global manufacturer of trucks, buses, construction equipment, and marine and industrial engines. When the Volvo Group set a new strategic direction, it prioritized and aligned initiatives with corporate strategies. One goal was to maximize returns by improving management of three multi-billion kronor investment portfolios. A cloud solution for enterprise-wide portfolio and resource management consolidated the view of these projects, allowing the Group to prioritize projects based on budget and alignment to strategy, and analyze profitability based on budget scenarios.
When the strategic planning process is built on real-time data and analytics, your company can shift from making reactive decisions based on gut feelings, to proactive decisions based on accurate information. Monitoring, reporting and dashboard tools provide the transparency you need to track progress, measure performance, and understand impacts. Forward-looking reporting allows your company to predict potential risks and opportunities, pivot on strategy, and iterate and execute an evolving plan.
Technology organizations play a pivotal role in not only helping to drive these data-based decisions, but also defining the capabilities and technology required to drive change and transformation. Technology teams can bridge the gaps between the capabilities you have and the capabilities you need to integrate transformative technologies into your business. By engaging in the strategic planning process early and often, your technology organization can architect the landscape demanded for strategic execution of a vital, living plan.