Key Business Strategic Tactical And Operational Planning Issues In Practice

September 6, 2022
 BY 
Robert Peopall

Key Business Strategic Tactical And Operational Planning Issues In Practice

Business Strategic Tactical & Operational Planning

13 key points to consider to deliver an efficient planning and control function.

Don’t think short term

Invest for future growth, look at the big picture and plan long-term, seizing the opportunities while you can.

Don’t avoid the difficult decisions

Be decisive, recognise problems don’t solve themselves, act quickly to stop bad investments and divest under-performing units.

Independent Silo Based Approach

Don’t allow the silo mentality to persist. Focus on driving integration and collaborative working throughout the entire organisation.

Politics undermining the Planning process

Drive a consensus based approach by using an engaging collaborative process involving the right mix of senior management and with political issues dealt with firmly so they take aback seat.

Lack of Co-ordinated Planning

The Strategy and Finance functions need to work together to drive the alignment of strategic, tactical and operational thinking and planning across the various geographic, line of business and functional boundaries to embed a consistent, integrated aligned approach into the organisation.

Culture of Protecting Existing Budget Levels

Significant cultural change is required to move away from traditional planning approaches which encourage maintenance or reduction of spend levels from both a capital and operating expenditure.

Management should be encouraged to move to a zero based budgeting approach and quarterly review approach to budgeting, forecasting and planning are implemented to remove the culture of maintaining spend at unnecessarily high levels just to maintain existing access to investment funds.

Culture of Building Slack into Budgets

This is typically a problem highlighted in the sales functions where the conflict between corporate objectives and individual objectives are highlighted. There is typically a natural conflict between imposing high targets on a sales executive viewed as unrealistic or impossible to achieve and the natural desire for as low a sales target as possible to make it easy to achieve, enabling the sales executive to benefit through the bonus compensation scheme in place.

The fundamental problem here is that the reward system promotes the wrong behaviour by the individual. The compensation scheme implemented has to drive the sales executive to continually focus on the bigger picture and significantly exceed the targets set. The targets set need to be fair but stretch targets that challenge the executive to excel. The philosophy outlined here applies to all areas of budgeting, the sales function is purely used as an example in this instance.

 

Accept that there will be developments that are beyond your control

Many organisations fail to develop contingency plans and instead rely on reactive planning at the point that a risk becomes an issue that has to be addressed. Smart organisations seek to anticipate the unexpected and make contingency plans accordingly to ensure they are able to mitigate the risks and react faster when problems arise.

 

Mistakes will be made

Long term planning and forecasting is inherently subjective and difficult. Effective planning for a reasonably wide range of scenarios will improve your ability to anticipate the future, reduce the risk of failure and enhance the likelihood of future success.

The word ‘reasonably’ is important here as you typically have a finite amount of time in which to consider scenarios, so be wary of considering too many. In practice you need to balance the likelihood of a scenario and its potential impact in order to determine whether to cover it or not.  

 

Don’t let communication get in the way of success

Many organisations fail to communicate the plan in a clear and transparent way in order to gain the confidence, trust and buy-in of staff and to drive the alignment of thinking across the breadth of the organisation. The vision, strategy, objectives, targets and the long term plan are worthless if they are not continually communicated and reinforced to every single staff member.

 

Avoid Unnecessary Bureaucracy

Many organisations overcomplicate their planning processes, which in turn takes key resources away from focusing on delivering against their targets. A sensible balance needs to be found that leads to a robust process and delivery of an effective level of detail without tying staff up for too long in a labour intensive and time-consuming process.

Do not accept continuity where change is necessary

Many organisations suffer from a reluctance to change comprised of staff that are protective of their traditional ways of working and prefer continuity to protect their own personal interests and fiefdoms. Always try to persuade the reluctant manager first, but if something is broken and they are unwilling to change then act decisively, push ahead with the proposed change and fix it.

 

Don’t underestimate the importance of contingency planning

Many organisations fail to appreciate the importance of drawing up contingency plans in the event that a plan does not unfold as expected. Planning is inherently difficult as there will always be factors not apparent at the outset that need to be considered later as circumstances change.

Smart organisations encourage staff to constantly think about contingency plans in order to fine-tune their planning skills in the event that they need to change direction to get back on the right path.

Management should always consider the downside to any plan, and the risks associated. Make sure that you mitigate the risks and have a contingency plan in the back pocket to fix the issues if they are realised.

If any of these points sound familiar and resonate with you and you want to discuss how our ID8 diagnostics can help you to overcome your current issues and challenges then do contact us by email at contactus@aspirepi.com or call us on +44 (0)203 908 4346.