Strategic Planning vs. Corporate Reality - Implementability Counts!
A comment by Alexander Zimmermann,
CEO & Partner of SOLYP Informatik GmbH
Should I increase my sales force, improve product quality, or reduce prices to benefit my customers? These are three common ways to lead a business into the next competition cycle of a contested market segment we surely have all discussed before. A sound corporate strategy, which has gained high predictive power due to the linking of soft and hard data, needs to answer such a question and give clear instructions for action.
However, it can do that only if it was effectively implemented in the company. This may sound commonplace; after all, how many strategic initiatives are presented, discussed, and enthusiastically agreed upon in strategy meetings only to be "forgotten" later on between some file folders or on a hard drive without ever becoming effective?
In the 4th part of my discussion of success factors of strategic planning, I would like to deal with the practical question of how to ensure the “implementability” of a strategy as this determines the success of a business – your business!
Only an Implemented Strategy is a Good Strategy
What makes up a good strategy, or more precisely: Which basic prerequisite does a strategy need to satisfy in order to develop a positive or even excellent effect? Again, I would like to answer this question with what may sound like a banality: A good strategy needs to have relevance; it needs to play a driving role in the daily business of the manager. In one word, it must be implemented in the corporate reality.
Dr. Martin Watzlawek, Head of Corporate Strategic Development of Rehau AG + Co, emphasizes this key aspect of the strategy work:
"A strategic planning process only gains importance for the organization when it is implemented. Therefore, emphasis needs to be placed not only on the various analyses, methods, and tools used, but also on the implementability, the implementation, and the following-up on the implementation. Strategic projects and initiatives that are included in the budget planning for the following year are thus an important key to success."
What I find particularly fascinating about Watzlawek’s description is the notion of “implementability:” it precedes the actual implementation of the strategy, for it describes the ability or the general suitability of the envisioned strategy to impact corporate practice. The following applies: the lower the implementability of a strategy the more irrelevant it is! Implementability is the decisive success factor of a strategy without which all others lose importance.
Only if a strategy is feasible in the first place, it can be successfully implemented in the company and, thus, made available for controlling, as Dr. Michael Bretz, Head of Strategic Controlling of BASF SE points out:
"(Strategic) planning and controlling are two sides of the same coin - the success of a strategy can only be measured if a consistent but pragmatic controlling of defined KPIs is carried out."
Implementing, pursuing, and evaluating strategy, defining KPIs, and monitoring and evaluating performance towards the set objectives - these success factors, as mentioned by Watzlawek and Bretz, depend solely on one provision: the implementability of the strategy. Therefore, what concerns me is the challenge of how to ensure the implementability of strategy processes, so that daily strategic decision-making can exert its greatest effectiveness.
Increasing Implementability – Enhancing Efficiency
A good strategy gives me instructions for action, or in other words: it wants to communicate with me. In global companies which operate in dynamic, often chaotic markets, such communication needs to be fast, without information loss, and equal to all those involved in the strategy process. The implementability and the eventual implementation of a strategy, therefore, depend primarily on its ability to impact even daily decisions in a clear, driving, and quick manner. These conditions are best met with an IT-based strategy process as facilitated by the strategic planning software SOLYP3, as the digitization of strategic directives alone ensures their usefulness and clarity in today's market environment.
The enterprise-wide roll-out of a strategic software solution forms the basis of effective strategic planning which makes the aforementioned erratic markets manageable, that is it ensures the implementation of the strategy. Which concrete benefits does such a software-based implementation offer?
On the one hand, it ensures that all those involved in the strategy process have the same information at their disposal. Information on all strategic projects and initiatives are available and accessible to everyone at any time. The strategy meetings mentioned earlier where strategic directives are discussed are random in some way, as we all know from our own experience. Who has not experienced that important decision-makers are not present in such meetings due to other commitments or let’s say a delayed airplane?
However, if hard and soft strategic data is collected and aggregated via SOLYP3 questionnaires and the cornerstones of the strategy on key risks, competitive positioning, main initiatives etc. have been set, everyone involved has access to it – 24/7 and in every corner of the world.
By the way, the digital implementation of a corporate strategy helps to avoid media breaks which often lead to inconsistencies, errors, or misunderstood self-realization. Strategic guidelines can no longer be "bent" by juggling between Excel spreadsheets and PowerPoint charts; simply by a push of a button the defined strategy can be made available in almost all presentation formats. This clear communication and transparency helps to enhance the implementability of a strategy as well.
Second: software-based strategic planning increases its agility. It gains speed in daily operations; it can quickly and easily be adapted to changing conditions in turbulent markets. In SOLYP3, for instance, ad-hoc answers to urgent questions are made available, which implement the overall strategic planning into concrete corporate reality.
Thirdly, coming back to the role of controlling the strategic process, as accentuated by Bretz: Having digital access to past strategic planning makes deviations analyzable in retrospect and, therefore, helps to prevent them in the future. Through this correction, an IT-based strategy process enables the constant adaptation of planning to the actual market situation. The strategic planning becomes more robust; planning security increases greatly. Thus controlling is no longer limited to checking balance sheets, but takes over responsibility for the company's future, like it should.
In order to be as successful as possible, strategic planning needs to be implemented in the company. Today, this is guaranteed only by an IT-based strategy process that enables quick answers to strategic issues, provides clear, understandable, and comprehensive instructions to action, and makes planning accessible to strategic controlling.