THE NEW GAME PLAN FOR
STRATEGIC PLANNING
Disruptive innovation, new business models, and globalization have
accelerated the rate of change for every business. To stay competitive,
organizations are revising their business models, product sets, and
other critical aspects of their operations on a much more frequent
and continuous basis.
These organizations realize that real-time strategic planning and performance management are not
just “nice to have” but “must have” capabilities. Yet many organizations still struggle to implement
these capabilities. As a result, they’re unable to quickly revise their strategies, implement plans,
and monitor results.
One key culprit is the state of today’s strategic planning tools, often including spreadsheets and
other cumbersome legacy technologies. These can block executives from collaborating easily
and reacting quickly to market changes. Business leaders not only dislike these tools, they also
distrust the data such tools provide.
These are among the key findings of a recent survey conducted by Harvard Business Review
Analytic Services. The survey drew responses from 385 business and IT leaders worldwide in both
medium and large organizations across a wide range of industries.
Fortunately, leading organizations have found a better way forward. They’re moving to a more
dynamic planning approach that uses technologies and planning philosophies that allow business
plans to be changed with relative ease and speed. This approach includes new tools that support
easier data-sharing, improved accuracy, and greater collaboration across the organization. These
improvements, in turn, can boost speed and productivity in ways that dramatically aid the
bottom line.
“Forward-looking plans, forecasts, and budgets enable organizations to manage financial resources,
chart strategies, and model changes to the business,” says Paul Hamerman, an analyst with
Forrester Research. “These planning and modeling capabilities are increasingly relevant across the
entire enterprise.”
TH E NE W G A ME P L A N FO R ST R AT EGI C P L A N N I N G
1
LINEAR NO MORE
Here is one challenge facing managers: Although much of their business planning is still done as
a linear process, it’s an approach that’s quickly becoming obsolete. In a slower-moving business
environment, the linear process worked fine. First, plans were assembled, typically on an annual
basis. Next, the plans were broken into periodic goals for different business units. Finally, the plans
were left to stand—or, more likely, be forgotten—until the next annual planning cycle.
But today, that’s overly rigid and slow. “Too many companies still use the annual budget as their
primary performance-management tool,” says Mary Driscoll, a senior research fellow at businessbenchmarking and best-practices firm APQC. “The plans are developed in August and launched
on January 1—and out of date by the end of January.”
“Planning has to change,” agrees Steve Player, founder of Player Group, a management-consulting
firm. “Top companies are well beyond recognizing the problem, and they’re moving very aggressively
to revise their approach.”
Respondents to the survey back up his claim. A large majority of respondents said they need to plan
more frequently than in the past. They also said their plans need ongoing and frequent changes,
including at the execution stage. Looking to the future, a similarly large majority of respondents
said they expect this pace to quicken further over the next 12 to 18 months. figure 1
But while business-planning speed and flexibility are increasingly important, many business
leaders still find these goals difficult to achieve. Fewer than half the survey respondents believe
their organizations can make changes to business plans in a timely manner. And more than half
believe their organization lacks the tools and skills needed. figure 2
The challenge is not in identifying the tasks most important to executing and revising plans, but
in completing those tasks. A large majority (79 percent) of survey respondents claimed to have the
ability to identify these tasks. But only about half that number (41 percent) said their organization
has typically done well at completing those tasks. figure 3
FIGURE 1
FAST, FLEXIBLE PLANNING IS THE NEW NORMAL
Percentage of respondents agreeing with these statements.
85
Over the next 12 to 18 months, the ability to make changes in a timely manner will become
increasingly important to our organization
81
Our plans typically require changes during the execution phase
Our organization needs to create plans more frequently now than it did three years ago
Most of our plans require frequent changes on an ongoing basis
75
61
SOURCE HARVARD BUSINESS REVIEW ANALYTIC SERVICES SURVEY, SEPTEMBER 2016
2
H A RVA R D BU S I N E S S R E VI E W A N A LYT I C S E RVI C E S
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