A necessary evil or a positive good?
For most managers, it's all plan, and very little business, disconnected from, even a drain on, day to day performance. In fact a true Business Planning Process should not just monitor performance, but actively drive it.
Do any of the following characterise your organisation's business planning process?
- market analyses that resemble doctoral theses
- growth targets with no granularity on how they will be achieved
- limited assessment of capability gaps
- no formal discussion of developments worrying the "troops on the ground"
- cursory evaluation of performance against previous year's targets
- last minute horse trading between Corporate and business units to "make the numbers" (which then have zero buy-in)
If any of the above are familiar, I would guess that the Annual Business Planning process in your organisation is also about as popular as root canal surgery.
The first step is to agree on the purpose of the Business Plan; this can be a PhD subject in itself, but here are four goals we believe to be fundamental:
- to be a performance improvement tool, not just a performance review tool
- to give executive leadership a means of knowing what is happening in the business and how to steer it
- to be a catalyst for ensuring how any employee can see how his or her job contributes to overall group targets
- by application of consistent of measures and goals, to enable any senior manager to transfer to another part of the group and add value
Others can be added, but the first two are the most critical. In our experience the most effective way of securing both is to treat the whole process as a dialogue between "Group" and "Business Unit". A dialogue in which each is sending messages to the other, having an honest discussion about them, and taking decisions on action. Too often it's a dialogue of the deaf, with hapless CFO or Strategy director in the middle.