Companies will invest considerable time and money in developing a strategy but, in many cases, fail to operationalize it, or worse, employees are unaware of what the company strategy is. Having a disconnect between a company’s strategy, plans, and execution will mean that growth and financial goals are negatively impacted. Therefore, what is required is the integration of strategy into business unit plans executed by a planning process such as Integrated Business Planning (IBP). In this blog we look at how to achieve this and why IBP is fundamental in executing strategy to drive business growth.
What is Integrated Business Planning?
Integrated Business Planning is a decision-making process that aligns strategy, portfolio, supply, and financial results through a monthly planning process. It looks out over a 24+ monthly rolling horizon, or more, to cover the strategic plan horizon, which senior executives and their teams hold themselves accountable for achieving. Done well, it is the formal way a business is managed, and strategy is deployed.
Alignment of corporate and business unit strategies
Corporate and business unit executives should align strategies at four levels. These include:
- Corporate strategy – this has an emphasis on profitable growth and return on investment (ROIC). Business units are assigned specific portfolio roles and defined expected investment and return profiles.
- Business unit strategy – the strategic plan at this level should be designed to achieve corporate expectations. Strategic priorities should be established and then cascaded to functions.
- Functional strategy – functional strategies are aligned to strategic priorities. A growth game plan should be established to achieve the financial ambition while meeting customer, market, and consumer needs.
- Integrated Business Planning – strategy is operationalized through IBP using the process to create plans and inform decisions on managing gaps between the strategy, business plan, and annual plan.
Operationalizing the strategy and plans with IBP
When it comes to operationalizing strategy, business unit leaders can use IBP as a means for routinely monitoring the effectiveness of strategies and tactics in driving growth, aligning tactics, timing, and resources across the core functions of the business, measuring the impact of tactics and overall achievement of strategic goals and adapting strategies and tactics as needed to achieve growth goals.
Developing strategy playbooks and dashboards
Developing strategy playbooks is valuable to visualize business performance against strategy and identify gaps. Oliver Wight’s cloud-based IBP technology platform, Ollie Accelerator, enables the creation of playbooks that provide a digital dashboard of visualizations for key metrics. It allows managers and the executive team to quickly assimilate strategy and performance data into information graphics. They also provide an inventory of best practices for the most effective gap-closing actions. Once gaps have been addressed, visuals can be quickly updated and presented on a routine basis at each IBP review to ensure all participants understand what is happening in the business.
Connecting corporate strategy with business unit plans is essential for achieving long-term growth and delivering on financial goals. Strategy cannot be treated as a one-time exercise or an afterthought – it must be embedded in business operations. Through Integrated Business Planning, strategic goals become part of daily and monthly decision-making.
To find out how to align corporate and business unit strategies into your business, download our white paper on Deploying strategy with Integrated Business Planning – connecting strategy to execution.
To effectively bridge the gap between operations and strategic goals, implement a successful IBP process, create playbook dashboards, and more, find out how Ollie Accelerator can help.
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