Why do large and medium-sized companies opt for the Strategic Intelligence Software SOLYP3? And what does the use of the strategy platform actually look like in practice? In order to get tangible answers to these questions, strategists from various industries and regions met in Frankfurt last Thursday for the 1st SOLYP3 Best Practice Meeting. The focus of the half-day event was on the best practice example of Sto SE & Co. KGaA, a specialist in thermal insulation, which has successfully been using SOLYP3 for its group-wide strategic planning since 2012.
The Strategy Process of the Sto Group
In their excellent presentation, Michael Doskocz and Peter Dazer of Sto’s strategic corporate development team first explained the audience the strategy process of the group, which is based on two fundamental principles: rolling five-year planning and systematic goal cascading.
Based on the long-term corporate vision and mission, the executive management defines the strategic group goals for the coming five years, which serve as "guidelines" for the entire company. Following a comprehensive analysis of the internal and external business environment, appropriate strategic sub-goals as well as measures for achieving those sub-goals are then developed at the divisional and departmental level. While this is done largely on the own responsibility of the division and department management staff, there are certain minimum requirements set by the executive management regarding which kind of business environment data needs to be considered.
Each strategic measure is assigned a person responsible, milestones, strategic KPIs (e.g., market position and market share), and the corresponding balanced scorecard perspective (finance, markets & partners, processes & structures, value-creating innovation, employees). The strategic measures are basically the “result of strategic planning” and serve as input for the detailed annual operating budget. All operational goals and measures and even the individual employee goals are derived from the strategic measures. The principle "No goal/project without reference to the strategic group goal" ensures that all activities are aligned with the overall corporate strategy, the speakers explained.
The strategic plan is reviewed annually for plausibility and goal achievement, updated as necessary, and extended for the next five years. “Following up on things is the key,” Doskocz said. The function of the central strategic corporate development team in this process is to serve as a "sparring partner" to the division and department management staff.
Problems before the Implementation of SOLYP3
A prerequisite for an effective and efficient strategic goal formulation and deployment process, as practiced by the Sto group, is an equally effective and efficient information management. However, before the implementation of the Strategic Intelligence Software SOLYP3, Sto was struggling in this respect with a number of problems:
- A large number of non-connected files in Excel, Word, PowerPoint, SAP, and Lotus Notes
- Redundant data management and data sets
- Diverse use of analyses, tools, and methods
- Diverse, individually formatted presentation contents
Due to this lack of interconnectivity and standardization, the flood of information was simply not manageable anymore. An experience which, as it turned out during the discussions, was widely shared by the other event participants.
Digitizing Strategic Goal Formulation and Deployment with SOLYP3
With the introduction of the strategy platform SOLYP3 in 2012, which came at the initiative of the board, the Sto group now has a standardized and integrated goal formulation and deployment tool. The use of SOLYP3 enables the Sto group to:
- Manage strategic data holistically
All relevant strategic data is stored in a central database which is accessible to selected users at anytime and from anywhere via the company's intranet. In addition to the ease of use of the software, it was important to Sto as a multinational company that SOLYP3 supports multiple language input.
- Process data in a structured and standardized fashion
Standardization regarding content and presentation was one of the key demands of Sto’s board to ensure comparability of strategic data as well as alignment between strategic group goals and sub-goals and measures, Doskocz and Dazer explained. The top-down data entry requirements in SOLYP3 ensure that all strategic business units perform the same type of analyses and deal with the same basic strategic issues. They are free, though, to supplement the minimum required data with their own individual business-specific assessments. The strategic group goals are stored in the system and cannot be changed by the user. Each sub-goal and every measure must be assigned to a group goal. The output is standardized PowerPoint slides in Sto’s own corporate design.
- Perform cross-analyses and benchmarking
Thanks to the standardization, Sto is now able for the first time to perform proper cross-analyses and benchmarks both between and within strategic business units (e.g., by region).
- Monitor goals, planning assumptions, and progress towards goal achievement
The consideration and linking of hard and soft data is a "particular strength of SOLYP3," Doskocz pointed out. This enables identifying opportunities and risks, recognizing growth potentials and trends, comparing the market and competitive position, and identifying gaps to achieve the set goals.
- Initiate, steer, and monitor goal-oriented strategic measures
SOLYP3 covers Sto’s entire strategic measure management process from beginning to end.
- Extent and update the rolling five-year planning if needed
The knowledge gained is stored in the system providing the basis for extending and, if necessary, adjusting the rolling five-year profit and loss planning. This is crucial as "we don’t want to develop a new strategy every year," Doskocz said.
- To generate reports at the push of a button
Reports can be generated at the group or planning unit level automatically at the push of a button. Sto is using these reports as a basis for its bi-annual strategic controlling meetings.
The introduction of SOLYP3 has not only led to a significant sharpening and increased importance of the strategy process of Sto, but also to considerable time and effort savings, especially when it comes to generating reports. Of the latter, participants were able to convince themselves during a live presentation of Sto’s SOLYP3 system. Using the example of market analysis, Doskocz and Dazer showed how single PowerPoint chart as well as entire PowerPoint presentations across all analyses and plans can be generated in a matter of seconds. The "wow effect" in the room was palpable!
Success Factors for Implementing SOLYP3
In general, employees tend to resist the introduction of new software, as it usually comes with some extra workload, at least initially. In case of strategy software, Peter Dazer explained, there are also certain concerns regarding transparency. In Sto’s experience, key success factors to overcome these obstacles include the consistent support and demand by the executive board, continuous communication of positive effects and benefits, an intense and target group-oriented support (conceptually and technically) by the members of the strategic corporate development team, as well as the integration into existing committee and meeting structures.
Today, more than 300 Sto employees worldwide are using SOLYP3 on a regular basis.
We would like to thank very much Michael Doskocz and Peter Dazer of Sto Group as well as the other event participants for their valuable contributions and positive feedback and are already looking forward to the next SOLYP3 Best Practice Meeting!