The strategic planning process can sometimes get really complicated. Especially when it comes to large enterprises with multiple lines of business, where each of the lines of business are unique and have nothing common between them.
The objective of this article is not to give prescriptive advise on what will work for particular situation, but restrict to introducing the various levels of strategic plans as one chooses to cascade them. Arriving at an apt solution for a particular situation would require me to know about your organization and its current practices.
Broadly the strategic plans are classified into 3 levels based Hoshin Kanri Policy Deployment Framework:
A strategic plan drawn at this level will be owned by the group chief executive or president. Two scenarios are likely First, the enterprise operates in different geographies and so each geography is a separate legal entity and operates independently. Second, the enterprise could be a conglomerate having multiple lines of business such as retail, telecom, mining, hospitality, etc. In either of these cases, the divisional strategies would be vastly different from each other. These types of organizations are usually referred as M-form (Multi-divisional form). It is very difficult to have a holistic strategic plan at this level for whole enterprise. The strategic plan at this level is more about goals and broad overarching strategies of the enterprise. Overarching strategies are closely linked to the enterprise’s values and guiding principles such as agility, vibrancy, sporty, caring, economical, etc.,
Broadly, the enterprise level strategic plans includes 3-5 goals of the enterprise for next 3 years, 1 ~3 overarching strategies and owners for each goal.
However if the enterprise, isn’t that diverse, then its enterprise level strategic plan resembles divisional strategic plans in form, structure and construction.
Divisional strategic plans are owned by the divisional business heads. They include 3-5 goals, 5~6 strategies specific to the division, derived based on the division’s internal and external environment conditions (SWOT), ownership assigned for each goal and specific strategic projects (initiatives) that will help to achieve the goals. The entire leadership team of the division is involved in creating this strategic plan. If there is a enterprise level strategic plan, then the goals of the divisional plan align to the enterprise’s. With regard to the strategies, while divisional strategies would be more specific, there will be alignment to enterprise strategies.
There would be as many divisional strategic plans as the number of divisions in the enterprise.
A functional strategic plan is created for each unique function of a division. It is owned by the respective functional heads. The main purpose of the functional strategic plan is to align the functional goals to the divisional (and enterprise) strategic plans. The goals are directly derived from the divisional plan. Usually there isn’t much emphasis on the functional strategies. Instead functional strategic plans are more tactical in nature. Functions will have to own and contribute to divisional strategic projects as well as drive function level strategic projects. For example, a HR department may own a divisional strategic project to bring employee attrition below certain level, but they also want to drive function level strategic project to improve HR staff efficiency. Thus functional strategic plans are more about resource ownership, alignment between divisional and functional strategic plans, managing the utilization of resources between divisional and functional priorities, etc.,
There are as many functional strategic plans as the number of functions in the division.
In large enterprises, the functional strategic plans also need to have alignment to enterprises like functional strategies. For example, the HR functional strategic plan needs to be aligned to respective divisional strategic plan as well as enterprise level HR Strategic plan.
In cascading functional strategic plans from enterprise and divisional strategic plans, the role played by the facilitator is very important. He/She should diligently map the enterprise and divisional priorities, interview all concerned, understand ground realities and above all, stay neutral.
Nilakantasrinivasan aka Neil helps a range of large enterprises in services and manufacturing, with particular emphasis on execution of business & functional strategies. He can be contacted at neil@collaborat.com.
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