Ventana Research Analyst Perspectives

Strategic Planning for Performance Management

Posted by Mark Smith on Oct 12, 2021 3:00:00 AM

Strategic planning has always been difficult. But it is even more so in this age of rapid digital transformation and the pressure of business continuity, which has introduced disruptive changes. What’s needed, ironically, is a methodical approach to how an organization manages strategic planning to allow for beneficial disruption that is not avoidable, balancing finance and operations, engaging existing expertise and factoring in technology to ensure that new initiatives can be strategically aligned to the goals and aspirations of the organization. In essence, the essential foundation for performance management is planning that can ensure its alignment or optimization in order to reach strategic objectives.

The strategic form of planning for performance management translates organizational initiatives into the specific programs and outcomes that organizations need to ensure they maintain, or perhaps improve, their performance and competitiveness. The best strategic planning thus is not only focused on corporate objectives but is continuous, enabling the organization to dynamically compare how it’s currently performing to its plans and rapidly adapt as needed. In a business environment where digital transformation has occurred at a rapid pace, organizations need to be more agile and methodical in how they plan and operate and how they leverage their people and expertise. Strategic planning for digital transformation requires the ability to prioritize innovation and investments to benefit the customer, product and workforce experiences that are part of every organization’s strategic intent.

Many organizations say they do strategic planning; few actually have adapted their business to use it effectively. Traditionally, an organization would develop strategic plans, set corporate objectives and goals for what needs to be achieved, create appropriate portfolios of projects, and then wait for improved outcomes. That is the continuous and strategic part of what performance management provides an organization. It’s usually a step-wise process, with the steps from strategy and plans to initiatives and programs only loosely coupled and managed, resulting in a path to expected outcomes that’s less than optimal. For most organizations, the strategic plan is defined in presentations, documents and spreadsheets that are neither connected nor managed to ensure that employees can access as needed and that goals and objectives are linked and measured. This less-than-optimal environment will not establish confidence in strategic planning, which should operate continuously and seamlessly. Strategic planning requires purpose-designed technology that can support this specific set of requirements. It is not always part of traditional planning applications or performance management that you might find from your traditional HR-focused providers used for annual performance reviews.

VR_2021_Performance_Managment_Assertion_4_SquareEffective strategic planning, in addition to agility, needs financial support and leadership. Funding and financial investments must be available and directable to match the planning. And leadership must be enlightened, fact-based and agile as well. And here, as in so many aspects of business, no one person is as smart as the collective business management – dynamic ongoing collaboration is critical to drive the planning to optimal results. A roadmap for the continuous optimization of strategic planning using analytics can help organizations identify their level of readiness and effectiveness for truly achieving the spirit of performance management. Ventana Research asserts by 2023, one-third of organizations will evolve from performance management processes based on analytics and planning to ones that maximize outcomes using goals and objectives.

Getting started with strategic planning requires a critical eye toward your current approach to this essential business process. If performing well, it is reflected both in operational changes in the organization and in the performance metrics that align to the objectives and associated strategies. If you have not been able to continuously plan, and have failed to adapt to changes in the business, then you look at how connected your planning links your strategic to operational initiatives. Assess the performance and process gaps and determine where cycle times or management oversight may not be ideal. This gap analysis can help you identify areas for improvement and, more importantly, where better priorities and funding – and perhaps more useful and effective technology – will help you develop a more unified and continuous approach.

It’s critical to engage leadership in the evolution of the organization’s strategic planning – this is a digital transformation process for performance management that requires agility and confidence, and so responsibility must fall to those who lead the organization. To develop and execute on strategy expeditiously requires planning software that can support these processes. Every enterprise should manage its strategic plans and portfolios of programs in a way that provides not only a return on the financial investment but also business value and outcomes that are visible and managed with a common approach. Your organization can reach its full potential with a common framework that will enable you to optimize your strategy and plans as well as motivate and engage your workforce. What’s required is a business case that prioritizes the use of dedicated applications for strategic planning for performance management as well as the ability to apply iterative funding to ensure continuous improvement.

Regards,

Mark Smith

Topics: Performance Management, Business Continuity, Digital transformation, Digital Business, Digital Security, Digital Communications, Experience Management

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Mark Smith

Written by Mark Smith

Mark is responsible for the overall direction of Ventana Research and drives the global research agenda covering both business and technology areas. He defined the blueprint for Information Management and Performance Management as the linking together of people, processes, information and technology across organizations to drive effective results. Mark is an expert in technology for business from Performance Management, Business Intelligence, Analytics to Information Management across finance, operations and IT. Mark has held CMO, product development and research roles at companies such as SAP, META Group, Oracle and IRI Software. He has experience across major industries including banking, consumer products, food and beverage, insurance, manufacturing, pharmaceutical and retail and consumer services.