Director Strategic Initiatives at RBC

Haran Moorthy

Planning for the future is never easy. Whether it’s an event, the next vacation, or your family’s budget, there are so many variables that we cannot know with certainty because, well, the future is uncertain. I would say planning at the corporate level pretty much presents the same complexities, albeit with additional layers of shareholder expectations, internal stakeholder constraints, and (potentially) a much more public splash if your plan doesn’t pan out.

While there is no magic formula to corporate or strategic planning, I find that applying a structured, bottoms-up approach to the exercise makes it much easier to understand the outcomes of actual performance versus any plan. The approach I use is probably packaged together from all sorts of external sources I’ve read and heard throughout my life, but nicely glued together by the pain and embarrassment of work and life experience. I’ve failed spectacularly in planning for the organizations I’ve been fortunate enough to be a part of, and expect to continue failing especially as I traverse new business areas and client segments. But as you may be aware, the most important part of failing is understanding why, and how to move forward with your learning’s. So, to save you some of the aforementioned hassle, my approach boils down to three key blocks: understand your drivers, know your organizations’ reality in the future market, and outline your logic behind assumptions.

Understand your drivers

Whether you are planning an org structure, a new market to enter into, or your business’ sales plan for the next year, the first place to start understanding: what is driving performance today? With an HR lens, mining productivity reports, employee opinion surveys, 360 degree feedback, and gathering inputs from and about leaders is always a great source to feed plans.. Planning strategy cannot be a stand-alone job. You need to understand performance through metrics, and where you see disparity in performance where there shouldn’t be (i.e. similar markets, internal conditions, etc.) you’ll need to dig deeper to understand the root cause.

"Whether you are planning an org structure, a new market to enter into, or your business’ sales plan for the next year, the first place to start understanding: what is driving performance today?"

Be RealisticEverybody wants to be the best. But planning based on random premiums, solely what the market is doing and not factoring what your organization is capable of is reckless. Often times you hear of plans being made and adjusted over and over again. Pivoting due to material changes (a global pandemic, corporate buyout, regulatory changes) is necessary. Picking a goalpost at the beginning of the year not grounded in any research or reality is detrimental – and your employees often feel it the most. If your organization is moving into a new territory, product line, or service it’s important to note that market share will always start at 0 percent. That’s a scary number for leaders to hear, and even more terrifying for the planners that present it, but showing a gradual ramp-up (or hockey step or whatever is relevant to your industry and market condition) makes adherence to the plan more likely. From my experience,  the initial fight to ground planning in reality was always much more pleasant than seeing an unrealistic plan come apart.

Explain everything

This is probably the most critical and most often overlooked part of the process for planning. In the corporate world, our attention is always jumping from priority to priority. Our days can be stacked with meetings and important presentations, and all of sudden it’s planning time. So, even if we understand our drivers, and develop a realistic plan, we don’t always outline what our key assumptions are, or what they mean, or why we used them in place of concrete information. This takes up time and real-estate on a slide. Further, especially for strategy and planning professionals early in their careers, I find there is sometimes an aversion to using assumptions.

Assumptions help us get closer to uncovering concrete drivers. We make assumptions all the time in our day-to-day lives, by testing our assumptions we either validate or discredit our assumptions, and these move on to being facts relevant to our lives.

Similarly, assumptions play a crucial part in planning. Getting to the right level of detail in outlining assumptions and the underlying rationale is a bit of an art that I find only experience can hone, and it’ll be different at each organization and industry, but generally providing your thoughts on why you chose a number, a timeline, a group, etc. is the best place to start. For myself, I like to provide enough details that if someone else picks up a plan that I drew up for the year, they can understand clearly what my assumption is, the intended result if the assumption plays out, and the possible consequence of not meeting the assumption. Lastly, I like to add in the conditions that I believe will support meeting the assumption.

Whether you are new to strategic planning or a tenured professional, everybody knows the old adage that ‘the best laid plans oft go awry’ (Burns). The only thing we can do as planners is to forecast a range of scenarios and track our outcomes against these plans to continually refine our approach.