It is a huge mistake to not dedicate enough time and attention to this exercise because the downside is enormous—lack of direction and a framework from which to make decisions!
A recent research study noted that underperforming companies share several characteristics: they are typically unclear on priorities and strategies, strategic decisions are reactive and easily swayed by external events or competitors’ actions, and key shifts in the industry are missed.
The best practice approach is to start with a set of corporate objectives and to cascade those objectives down to each functional area, and then to the various departments within each functional area.
Because cross-functional teams should already be in place, it is these relationships that need to be leveraged to identify the strategies, structure, staff, systems and processes required to drive the business forward.
In fact, a simple one page document can facilitate the annual planning process and drive the annual budget.
It’s important not to be caught off guard when building the annual plan with a short timeframe or falling into the analysis/paralysis trap of trying to over-engineer the process.Marketing is uniquely positioned to focus the organization on is a great tool for this task.Decisions about which markets to enter and retreat, technology to adopt, product lines to expand or contract and customers to retain or retire are all issues that must be proactively managed.Spending eight years, one month and 17 days at HP (but who’s counting . .) provided a great deal of exposure to structure, process and methodology.The time spent also highlighted that task forces, cross functional teams, binders and a linear mentality is enough to kill any idea from its own weight.Fiscal irresponsibility is not being promoted here.Removing blinders and constraints to create new revenue streams that allow budget increases or reallocations is being touted.Best-in-class companies, however, typically have a clearly articulated strategy that is well-differentiated from competitors.In addition, these companies’ capabilities were distinctive and drove clear competitive advantage through a strong annual planning process.• Strengths – determine the characteristics of the business or project that give it an advantage over others.• Weaknesses – are there characteristics that place the team at a disadvantage relative to others?