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Sandy Richardson

Hi Tom:it sounds as though the process your organization used really worked for you. You've raised a whole other issue of top down versus bottom approaches to planning. The key to your success was, as you pointed out, that you were very close to your customer and you were empowered to do what it took to use that information to shape the business. The thermostat approach really lends itself to keeping organizations agile and dynamic - it detects anything that requires a response and hopefully provides an early warning system to do so. I think that this approach can support both incremental and transformational change - the key is the questions you ask to detect situations that require a response and the foolow up questions you ask internally to define and implement that response. Let's talk some more about that top down/bottom up approach to planning - what, in your opinion, are the pro's and con's to a bottom up approach? Sandy

Sandy Richardson

Hi Terry: The Tall Pole idea is very interesting and I like that it prioritizes elements that relate to strategy (as you know, prioritization is one of the biggest challenegs organizayions face). Can you talk a little more about the criteria used to define the A, B, and C elements? Sandy

Tom Malm

This is an interesting idea. I'm sure it will have me thinking for days.

However, the planning event you describe is very, very different from the strategic planning process where I was mentored. We did not have "That yearly ritual senior executives and their organizations go through . . ." Instead, we worked in the "upside-down" organization structure in which I (as a product manager) planned and managed my own business.

Being closer to the market dynamics, I was the one best suited to interpret market information, understand the SWOT analysis, hear the consumer's needs, and see the changes and understand what they would mean. I was empowered.

The process drove a business transformation from a $200 million company with its core revenue stream threatened by new technology to a $1 billion reinvented company in nine years. We captured the best seller position in three categories and a market position that is sustained today.

What I learned in this process is that there is no substitute for investing in the work. The process assured that resources when applied produced predicted outcomes over 80% of the time. It is only a waste of time to do planning this way if you are wrong. But like everything else, it only works when the structures, information, motivators and decision rights connect so it can work.

I like the ideas you presented for many reasons. But I also wonder if the Thermostat approach could work to transform a company when a company needs to be radically different to survive. Like IBM's transition from being a hardware "Business Machine" company to being a software-oriented "Business Solutions" company. Or would have been adequate to find the opportunities where I worked.

Terry Burton

This article is "spot on" and I like the term strategy management. We have had great success with our clients using a Tall Pole approach to strategic planning (borrowed from Pareto Analysis). The "A" elements are the near in strategy management activities and managed on demand, when known information may impact the plan - or reviewed monthly as part of the operating plan. The "B" elements of strategy management are revisited on a quarterly basis, or also selectively on demand if the potential impact on the plan is large enough. The "C" elements of strategy management are reviewed every 6 months. Strategy management is a rolling dynamic process, not a symbolic annual event. There is no annual process. The reviews and updates are quick and timely, and having the right metrics and near real time feedback in place is critical (e.g., business analytics, digital performance dashboards, etc.). Many smaller changes vs. the big bang annual process removes significant variation from the plan. Traditional strategic planning is obsolete in this economy.

Sandy Richardson

Hi Jack: you offer an interesting, simplified approach - have you tested it across different industriesd and sectors? Have you discovered any businesses or organizations that need to tweak the approach? If so, how? How should this approach be modified if you are offering a service rather than a product? How eactly does the revision process work when a change is identified/required? I'd be interested in your comments and suggestions! Sandy

Jack Gaum

For what it is worth, here is my suggested way for enabling companies to systematically react, in a timely fashion, to changes in their financial and operational performances and economic, political, technological, social and market conditions.
- Organize your company according to the 8 core activities ( identify customers, develop product, price product, make or purchase product, attract customers, sell to customers, deliver product and service customers) and 5 support activities( have the right people, maintain assets, maintain inventories, share information and account for money) common to all businesses.
- Establish financial and operational performance measurements for the activities and evaluate recent performances of activities.
- Evaluate how foreseeable political, economic, technological, social and market conditions will help or hinder future performances of the activities.
- Determine what actions are required to overcome poorly performed activities and negative foreseeable conditions and to exploit well performed activities and positive foreseeable conditions.
- Implement and then evaluate and adjust at appropriate intervals.

Users of this way will understand their management in its entirety and be able to place everything they have ever read about it within the context of the thirteen core and support activities of business. They will be able to insert any matter that they encounter on a daily basis into the simple context of these activities for prompt, consistent and systematic action. Management will be able to identify areas where they have sufficient knowledge and confidently seek assistance in areas where they lack expertise. This way will not only help management get focused, it will help them get others easily and quickly on the same page and keep them there.

Sandy Richardson

Hi Roy - excellent points. I would add that the ultimate objective is to build strategy into the way you work. Very often data and analysis that is camputured/completed in the course of day to day business plays a key role in strategy discussions. If this information can be captured as it's generated and be continuously fed into the strategy discussion, the work required becomes very streamlined and virtually seamless to the organization.

Sandy Richardson

Hi John - thank you for your very insightful comments. While what I suggest sounds simple, as you know and rightly point out, it requires hard work and commitment to make it happen. When the dedication is extraordinary, I have seen these things implemented quite quickly with a lightening-fast skills building period. In these cases, however, the organizational leader was a key driver and a critical factor in effecting and enabling the required resources and organizational changes.

Roy Little, FACET Finance Management

Sandy and Bob:
The corresponding mechanisms to support this, from the finance and metrics teams, are a Rolling Forecast approach to business planning, coupled with appropriate KPIs, (this acronym neatly covers both Key Performance Indicators and Key Predictive Indicators, each useful for different reasons). If well chosen, the Strategy success and progress can be readily measured, but more importantly, is readily visible to the stakeholders.
But Sandy has alluded to another implementation challenge, which is breaking management’s fear of a quarterly strategic review and budget update being the same as the annual one but only done more frequently. They are not. Scope, approach and effort are quite different. The key value to the Thermostat / Rolling Forecast approaches is that they become engrained, and a continuous steering exercise. Sort of like riding a bike well, rather than periodically falling off and figuring out how to get back on.
Budget forecasting and the attendant strategizing are behaviour influencers. The more timely they become, the more of a drive that they can deliver to the business, rather than representing annual goal posts that may lose their pertinence before getting there.

Sandy is right. Drop the annual pre-occupation. Let the Finance folk convert the rolling results into the required annual filings. But manage the business in a more continuous manner.


John Becker

The process of strategic planning is healthy and thriving for truly performance-focused organizations that dedicate their leadership time and talent to studying, developing and deploying their plans (both short- and long-term).

I believe the issue you've put before us/that's at play here is that, just as each key business process, including the strategic planning and plan deployment processes must evolve over time.

The level of sophistication where an organization is conducting routine (you suggest quarterly) performance review sessions with continuously flowing strategic and operational performance data is one that takes years of hard work for even the most dedicated business leadership teams.

Where the wheels can fall off the bus is when leaders don't in fact buy in to the process, struggle with and/or fight against it, and it then resultantly lingers at the annual pain event that you so aptly describe.

Here's the bottom line ...

Strategic planning, deployment of the plan, performance data systems' development and building employee buy-in to each of these endeavors is hard work. Like anything else in life, if you only do something once a year or when you have to/when someone orders you to, you will never be good at it, say nothing of becoming excellent at it.

These best practice tools and techniques, like the routines of great artists, performers, sports leaders, fitness gurus that stay in good shape, and teachers whose students live them must be addressed with a strong sense of commitment, discipline and within a culture of continuous learning.

Mix in those ingredients, and the process of strategic planning becomes not only continuous, as you correctly suggest it should be, but also part of the collaborative leadership culture within which both employee performance and organizational performance thrive!

Sandy Richardson

Hi Bob - it's great to hear from you!

While I agree that I may have been light on my time estimates, I'm not convinced that I'm that far off. In organizations that I have seen that do this well, they have created mechanisms for feeding customer and stakeholder insights, market and competitor intel, and employee ideas for improvement and change into their quarterly discussions effectively and efficiently.

Here's what I mean. How many times have you seen days and days invested in gathering customer feedback through surveys, focus groups, and one on one interviews in the run up to the annual event? Now, imagine how much time could be saved if this information was collected on an ongoing basis through regular customer touch points that happen every day?

However, let's be clear - it takes a lot of planning, investment, and attention to get to this level of efficiency. As you rightly point out, it will likely take some time before the time saved through these mechanisms reaches a significant point of benefit. However, the key is to start making the move sooner than later so that the benefits can be eventually realized.

Bob Noga

Hi Sandy

I absolutely agree with the main premise that strategic planning needs to move from an event basis to continuous flow basis. One point that I think you glossed over is that businesses still need to manage the information flow into these quarterly touchpoints. In that regard the time estimate of 2-3 hours per quarter is not a fair comparison to traditional planning. Also, until the new approach reaches a tipping point, the ongoing monitoring of key factors may be more challenging to manage than an annual SWOT or environmental scan.

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