Strategic delivery in modern business requires a balance between control and flexibility, risk and opportunity, and good timing. Don’t go the way of the dinosaur, use the right enterprise solutions to support your agile strategic processes.
Warning! Static strategy can lead to extinction
With their size, speed, aggression, big teeth and an abundance of food, the dinosaurs had a 170-million-year monopoly on earth. I would imagine their annual strategic review would be quite boring; “grow bigger by eating more”.
Some companies still develop strategy using the annual process, based on assumptions agreed 6-12 months prior, and by the time the strategy has been converted to a budget and plan it is already 18 months old!
Business excellence is supported by a ‘quick to action’ strategic process that allows for greater speed and less effort to convert data/assumptions to strategy and performance. This necessitates ‘always on’ strategic planning—connecting source data dynamically to assumptions and outcomes for computation and quick action.
What is needed in today’s business environment is a more agile strategic approach, as detailed in Phil Gadzinski’s recent article ‘Your strategic planning should be agile, too’.
Strategic buy in and the RACI matrix
In my experience, the area of strategic design and strategic delivery is the worst I have seen for mismatches in Responsibility, Accountability, Consultation and Information—RACI.
A useful recap on RACI can be found on this blog ‘RACI matrix definition’.
Strategic delivery only converts to successful performance if the people required to action it are involved in it, believe in it and are empowered and capable of delivering it. This entails agreement, a handshake between all parties involved.
Agreement only occurs when the right people are involved in the design and delivery, and are kept in constant contact with the outcomes of the strategy in terms of performance.
In order to accommodate this, the strategic design and delivery should be decentralized and consolidated rather than decided and disseminated.
This requires a strategic design and delivery tool to assist in the process, providing the bedrock for buy-in built on aligning and communicating responsibility, accountability, consultation and information.
Corporate and personal incentive alignment
Even with buy-in, it is important to constantly align incentives to the outcomes/ indicators of the strategy to ensure everyone is pointing in the right direction.
This is especially important in a dynamic strategic environment where the outcomes can change quickly due to new input.
Without maintained links between the objectives and incentives and the performance of an agile strategy, incentive misalignment could cause the wrong behaviours—and ultimately the wrong results.
Keeping incentives aligned with the strategy requires a dynamic link between strategic performance and HR/payroll processes to avoid leaving anyone behind.
Risk and opportunity integration
So, you have created your risk matrix, performed Monte Carlo analysis on the key items, assigned owners, mitigation plans and actions and even manually volunteered financial upside and downside for forecasts.
Have you linked it into your strategy? What about the source data driving the probability? According to the 2017 global risk oversight report, only 20-30% of companies have integrated corporate risk processes, leaving the majority of risk matrices in folders on shelves, unconnected.
Dynamic strategic delivery relies on speed of process and accuracy of data. By linking the risk and opportunity matrix to indicators or processes it provides immediate visual impact on performance targets, providing information for decision making when source data changes.
OK I’m interested, where do I start?
At IFS we provide dynamic solutions and expertise which can help your organization with agile strategic delivery. We provide the tools to dynamically connect and decentralize the activities required while maintaining corporate control of the overall process.
|I welcome comments on this or any other topic concerning Finance, HCM, CSR & business strategy
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IFS website: www.ifsworld.com
IFS develops and delivers enterprise software for customers around the world who manufacture and distribute goods, maintain assets, and manage service-focused operations. The industry expertise of our people and solutions, together with commitment to our customers, has made us a recognized leader and the most recommended supplier in our sector. Our team of 3,300 employees supports more than one million users worldwide from a network of local offices and through our growing ecosystem of partners. For more information, visit: www.ifsworld.com