Model Driven Strategic Business Planning
A Management Consulting Service
A major challenge for todays enterprises especially with regard to strategic planning, is that the rate of change can be such that the “cycle time” of change in an organizations’ market and environment becomes less than the “cycle time” of the strategic plan, in this context, strategic planning in the traditional sense becomes meaningless.
This is particularly the case in those industry sectors where a climate of continuous discontinuity exists, i.e as effected through a confluence of rapid macroeconomic, microeconomic and technological changes, amongst others.
In such an environment, businesses cannot be reliably planned, they must be designed, i.e a shift from a strategy as plan to strategy as adaptive enterprise design.
A well designed Enterprise Architecture contains the models and the method for adaptive enterprise design. It has as one of it’s primary design goals the flexibility to deal with foreseeable change as well the built in capability to adapt to cater for enforceable change
Strategic Business Planning
Strategically, business plans should reflect the Strategic Plans defined by management.
A Strategic Business Plan defines the Mission, Vision and Value statements of an enterprise. Based on the industry and market focus defined by management, Policy statements are developed for the enterprise. These Policies are qualitative guidelines defining boundaries of responsibility for business units or functional areas of the enterprise.
From Policies established by management for each business unit or functional area, Goals and Objectives are defined. While policies are qualitative, Goals and Objectives must be quantitative and measurable. Goals are typically long-term, while objectives are short-term. Some enterprises may reverse these – with objectives long-term and goals short-term – but the effect is the same: they must be quantitative and measurable.
Once quantitative measures are defined, alternative strategies can be evaluated. While a goal or an objective indicates “what” is to be achieved, a Strategy indicates “how” that achievement will be realized. Strategies therefore depend on goals and objectives. Strategies may have many steps involved in their execution: called Tactics.
Once a strategy or tactic is defined to achieve a goal or objective, its implementation will need to be managed. This is achieved by Key Performance Indicators (KPIs) defined for each strategy or tactic. A KPI is an objective that is typically defined for implementation of specific strategies or tactics, in support of the achievement of goals or objectives by business units or functional areas. KPIs measure the performance of the managers of those business units or functional areas, whose responsibility is the effective implementation of the relevant strategies or tactics.
To define a strategy or tactic – to focus on how something is to be done before knowing what is to be achieved – is the ultimate futility in strategic planning. It certainly generates work, but it rarely generates results. For if no measures have been defined for achievement, then no results can be assessed against those measures.
So to be quantitative and measurable, all goals and objectives must exhibit three characteristics: measure, level and time. A goal or objective statement must clearly indicate “what” is to be achieved (measure), by “how much” (level) and “when” (time).
Senior managers accept that Strategic Business Planning is their responsibility. The development of the strategic plan in many enterprises is carried out by a Corporate Planning Department that reports directly to senior management. Effective strategic plans typically emerge in this situation. Unfortunately though, for most enterprises the strategic plans are mainly statements of strategy. They are not measurable, and so are unable to be managed precisely. Only when measurable goals and objectives are clearly defined as quantitative measures can management exercise effective management control.
Senior managers are the architects of the enterprise. Strategic Business Planning is the approach used for Enterprise Architecture (EA). Government, Commercial and Defense enterprises use strategic planning to ensure that the enterprise follows firm management directions. The Mission, Vision, Values, Policies, Goals, Objectives, Strategies, Tactics and KPIs should be statements that provide clear direction to all managers within the enterprise.
- Where strategic planning is not applied effectively, management cannot be certain of the results that will be achieved by the enterprise. The enterprise then becomes very difficult to manage; few measures are available for management to assess performance achievement. The following problems typically arise in such enterprises:
- If the strategic business plans are not well–defined or are non-existent, the enterprise has no clear direction. If not corrected in time, this failure can lead to the complete collapse or failure of the enterprise.
- If the strategic business plans are well–defined, but not used effectively to manage all parts of the enterprise and at all levels, required business changes in the enterprise may take longer and so cost more than they should. In the rapid business change climate of today, such delays can be serious. At best they may lead to lost opportunities; but at worst they can lead to the failure of the enterprise.
- If the strategic business plans are well–defined, but no longer meet the specific needs of the enterprise, then the business may be moving in directions that are no longer appropriate. This can represent wasted effort and cost … and once again, lost opportunities.
- Clear strategic plans, with an understanding by management of Enterprise Architecture and its integration with Enterprise Information Architecture (EIA), can enable standard business procedures and integrated databases to be defined throughout the enterprise. This can lead to enormous cost savings through dramatic improvements in business efficiency. For example, common procedures as well as integrated databases lead to common training of staff, easy staff reallocation due to common skills used in the business, and elimination of redundant processing otherwise needed to maintain redundant databases current and up-to-date.
Once again, the above problems correspond to those discussed for architecture in building, but were avoided there due to the accepted use of building architecture.
The lack of Strategic Business Planning and the absence of Enterprise Architecture (EA) that is applied by senior management, in contrast, is one reason why many enterprises operate at less than optimum efficiency … or may even fail.
Our service will assist your firm through the process of assessing your current organisation from a holistic strategic business planning current best practices perspective, and, together with our associates, through our approaches and best of class industry tools, we can assist in the development of your organisations strategic business planning and transformation efforts, from a perspective of empowering your organisations strategic commercial value creation and optimization efforts.
Our Strategic Business Planning Service Line services include :
Adaptive strategic business planning is an imperative for any enterprise that intends to be a serious player in the knowledge economy.
- Business Case and road map development, that identifies tangible returns from Strategic Business Planning efforts.
- Strategic Business Plan reviews.
- Technology Forecasting