Can the dance of corporate planning be made more meaningful?
There is general consensus that between 60% and 85% of the time, corporate strategies and plans fail to achieve their results. Amongst many, the key reasons for such failures are recognizable: Gaps between planning and execution creep in without being noticed. Planning processes become disconnected from execution and results on the ground. Goals are set without sufficient attention being paid to changes taking place in the organization. Finally, there is frequently a lack of feedback from execution back to planning.
The causes of these and other business planning shortcomings can be traced back not only to the planning process but also to strategy execution practices. Businesses set goals and define strategies and initiatives to achieve them. They then develop financial business cases to justify the supporting initiatives. However, the effects of such initiatives on operations and their ultimate impact on goals are usually not well understood. The result is planning / execution gaps. Moreover, once the initiatives are approved, the business cases are typically forgotten and there is little if any follow-up.
Brian Quinn of Dartmouth University once said "A good deal of corporate planning ... is like a ritual rain dance. It has no effect on the weather that follows, but those who engage in it think it does. ... Moreover, much of the advice related to corporate planning is directed at improving the dancing, not the weather."
To make business planning less of a rain dance and more of a GPS with traffic & weather conditions, the entire process from planning to execution and completion should take place with rigorous value realization practices i.e., structured activities designed to create a feedback loop to identify, measure, monitor and track the impact of initiatives on key business performance measures. Such practices provide an understanding of the impact that initiatives have on key business measures which help business planning become more effective.
Even when applied at the fringes of a large initiative, focusing on value realization can help close the gaps between planning/execution and goals/measurable outcomes. For example, in a recent client engagement, the project sponsor wanted to justify continued investment in a project that had been approved and was already under way. Using value realization practices developed and trademarked by Infosys, my colleagues and I identified sources of potential value within the client initiative, the KPIs and metrics impacted by the initiative and more importantly, the degree of impact the program had on the business performance measures.
In one instance, we identified that the initiative would deliver a 20% reduction in customer service call volume (by type) and a 10% reduction in customer complaints (by type). As the company was in the midst of its planning period, we shared our findings with the client's customer services planning team. We helped them create a feedback loop to track and measure the impact of the overall initiative on their call management capacity and customer service representative recruitment planning.
Of course, the above example represents just a small part of what focusing on value can achieve. In the weeks ahead, I will be delving into other value realization activities, tools methods and examples to stimulate conversation and knowledge sharing. I look forward to your comments and suggestions.