The fact that, in any organization, responsibility is divided among various individuals and units has vital consequences for how strategy gets executed. Below are some points to consider about conducting planning with an eye on organizational behavior:
Knowledge is more dispersed than we may usually believe
Relevant expertise resides in scattered, sometimes unexpected parts of a corporation. Culling that information within your organization may lead you digging in unexpected areas.
Power is also more dispersed
Formal authority is not necessarily directly aligned with where required commitments exist for the execution of a successful strategy. Take a look at your organization: where are the less formal power centers?
Roles determine perspective
All stakeholders who have a role in strategy will have a different approach when allocating for resources and determining achieved outcomes. The set of facts considered by various players will usually tie into those most pertinent to success in their individual operating roles.
Departmental Planning Process Identifiers
The process of departmental planning is iterative and cyclical
Bottom up processes must align with top down objectives. The challenge for management is to maintain commitments to the strategy with proper investment of resources and time. The challenge for leadership is to use feedback and continuous, consistent reports as guides for giving coherent direction for investing broad goal-level resources in the first place. Commitments must then either be revised or stepped up as new realities emerge.
Use operational managers to get work done across divisional lines
Top-level directors need to reach down to operational managers to get departments to cooperate. These cross-divisional teams need to be supported by top-level management and freed from departmental measurement systems to be able to focus on the actions to achieve the larger strategic issue.
Leadership must connect the dots
Top managers will have to keep the big picture in focus in order to avert common problems. Conflicting divisional perspectives tend to resolve themselves on the basis on which unit has the most power. Or, divisional managers make compromises that share resources in ways that seem fair on paper but are not the best approach strategically. Worst case, a division may agree not to challenge another division’s proposals in return for the same treatment. Top management needs to step in and frame questions that reflect the organization’s larger perspective.
Judgments must be made
No planning or capital-budgeting procedure can substitute for the best leaders in the company for making considered judgments about how to allocate resources. Senior management must engage itself in the debates that mark inflection points in the process.
Strategic issue reviews need to focus on facts first, then alternatives, then course of action
Presentation of the facts to issues as they arise can be an ongoing process in the normal reporting cycle, but these are not the times in which a course of action should be crafted. Since issues can be complex, strategic and financial information needs to be prepared to uncover and evaluate alternatives for each issue. After several weeks of preparation, facts and alternatives can then be addressed to craft a solid course of action or to elevate the issue to leadership for revision.
The following was a collection of some of OnStrategy’s vault of planning resources dedicated to planning within departments, along with some recent refreshment from Harvard Business Review’s Strategy Renewal articles.