Success Factors of Strategic Planning - Expert Check, Part 1

Thursday, 16. April 2015

Strategic Planning and Corporate Hierarchy - Making the Conflict Productive

Recently, I asked our customers to explain to me in a few sentences their strategic planning philosophy. Which success factors have proven their worth in business practice? What processes ensure a smooth strategy process? What is important when collecting soft data for the specific corporate strategy?

For their profound and inspiring answers, I would like to thank at this point. In addition, I would like to take them as an opportunity to share which you my insights on various aspects of strategic planning in the coming weeks and months. I will discuss – within the daily business and beyond my own entrepreneurial commitment – core issues of strategic planning in the 21st century, which have emerged from these statements both as essential success factors as well as areas of conflict.

Top-down or Bottom-up?

To put it in the language of the 1980s: the strategy process with the strategy platform SOLYP3 begins in a “basis-democratic” fashion. Each employee entering his trend analyses and competitive intelligence data into his questionnaire plays the same (that is equally valued) role in the data collection phase of the corporate strategy; however, not always the first fiddle…

As, of course, the setting of the strategic direction of the organization remains the responsibility of the top management. Lars Schäfer, Head of Strategic Projects and Business Development of TUI AG says:

"Strategic planning should be a concern of the Board and performed in a standardized fashion across all business units. It is essential to focus on the key opportunities and challenges associate with the group's strategy, and, thus, to derive goal-oriented strategic initiatives."

I don’t want to paint a black and white picture here. Schäfer does not say: planning is done by the boss! Rather, he identifies the C-level’s "concern" to collect the planning data from the different business units (in a standardized fashion) in order to consolidate it into “strategic initiatives” which address the "key opportunities and challenges" the organization is facing. What is important to me here is the interplay of decentralized data collection and central "focusing" under the directives of a comprehensive corporate strategy.

On paper, this sounds purposeful, efficient, and, most of all, smooth. But we all know how the "concern of the Board,” let’s say, from corporate headquarters in Milwaukee may be received by a branch in Queensland, Australia when a large local farmer wants to order a dozen agricultural machines.

You sense what question concerns me: How can strategic planning in the 21st century use the dichotomy between corporate goals set at the board-level and the grassroots analyses of individual business units as an opportunity for success?

At first glance, Dr. Peter Bross, Group Senior Vice President and Head of Corporate Strategy of Giesecke & Devrient GmbH seems to be taking a different view than his colleague:

"A successful strategic planning process should aim to systematically bring together the distributed collective knowledge about the state of the company, its environment, and possible future developments, and translate it into future scenarios. Suitable IT tools are needed here as well as the ability to challenge the views of others constructively in order to learn from them."

Bross doesn’t primarily take a central perspective; rather, he emphasizes the importance of the individual employee. His expertise regarding "the state of the company, its environment, and possible future developments" turns into powerful knowledge enabling the "future scenarios" of a corporate strategy in the first place.

The Power if IT-Based Synthesis

Schäfer and Bross have positioned the two key players of the strategic planning process on stage and equipped with powerful "weapons:" with the overall corporate responsibility, policy-making authority, and strategic focus of the Board and with the front-line knowledge of business unit managers immersed in the daily operations of the business.

As mentioned earlier, the strategy process with SOLYP3 has a basic democratic touch. Does that mean that I am closer to Bross’ statement than to Schäfer’s? No, that doesn’t quite capture the essence of my argument. Because what matters to us in the development of strategic IT tools reconciles the two perspectives and combines them to an opportunity, or, rather, the only success factor for future-proof strategic planning.

Here I would like to draw your attention to one aspect of strategic planning with SOLY3 which perhaps sometimes slips the focus as it stands at the very beginning of the data collection process: the so-called "questionnaire." The employee enters his strategic plan into the questionnaire, i.e. regarding his business unit, branch, or area of responsibility. His input includes both hard data, such as sales volumes, as well as soft data, such as trend analyses, competitive intelligence, and market assessments. The "questionnaire" enables each employee to share his expertise on his business area and make it accessible to the entire organization; particularly, of course, to C-Level executives taking strategic decisions.  

Nothing new so far. However, in the discussion initiated here the questionnaire has a special, synthesizing function. Because this tool is no out-of-the-box, modular IT product forcing the same kind of strategic planning process onto every industry and every business; nor is it a text field which can be entered arbitrarily by the user.

Nevertheless, the SOLYP3 questionnaire combines both aspects raised here: It is customized by our experts and your project team to meet your organization’s individual needs as well as the key strategic issues in your industry and business environment. In doing so, it takes into account both the “focus” of the Board (that is the implementation of a group-wide planning standard to be followed by everyone), as demanded by Schäfer, as well as the freedom of the individual user to bring his grassroots perspective into the overall strategic view of the organization.

In short, the SOLYP3 questionnaire reconciles the top-down and bottom-up oriented planning methods, as accentuated by by Schäfer and Bross. It resolves any potential conflicts between different hierarchical levels; even turns it into the actual driver of a successful strategic planning. On the one hand, the questionnaire is standardized to such an extent that it calls for everyone involved to acknowledge the strategic policy-making authority of the Board. On the other hand, thanks to its qualitative aspects—concerning primarily the entering of soft data—the employee is able to translate his perspectives into strategically relevant statements making them usable for the strategic planning process. Each method alone is imperfect and flawed; only by bringing them together in the questionnaire they unfold their strategic force.

The fact that the SOLYP3 questionnaire is a software-based tool somewhat blurs its cross-hierarchical power to bring together possible antagonistic perspectives within the company, so to speak. Once implemented in the strategy process of an organization, it is neutral in nature. It neither has the taste of a HR measure to promote stronger employee engagement in setting the company’s strategic direction, nor of some kind of trick of the Board to drip down long-made strategic decisions to other management levels by mouse click.

The employee is only required to complete the questionnaire. Even the stressful day-to-day business far from corporate headquarters should not prevent him from doing so...

Read also:

Success Factors of Strategic Planning - Expert Check, Part 2

Success Factors of Strategic Planning - Expert Check, Part 3

Success Factors of Strategic Planning - Expert Check, Part 4

Success Factors of Strategic Planning - Expert Check, Part 5

Success Factors of Strategic Planning - Expert Check, Part 6

Success Factors of Strategic Planning - Expert Check, Part 7