Do you know anyone, or any organization, that at the end of the year looked back at their annual plan and honestly said everything went according to plan? Did you ever have a year where nothing changed? No new competitors, no changes in market conditions, or budget cuts? Of course not. Plans that don’t anticipate these changes are neither strategic nor innovative; however, innovative strategic planning is exactly what you want to strive toward.
Despite their continued failure to achieve annual goals or respond to changing conditions, organizations continue to rely on traditional annual planning retreats to define their strategic goals – generally under the pretense of creating customer loyalty, improving customer experience, or increasing revenues for existing customers. These “functional” teams create all sorts of great ideas, which eventually fall short or are forgotten.
To put this situation in context, let’s look at the key findings from the Sixth Product Portfolio Management Benchmark study conducted by Tech Clarity and commissioned by Planview. In this study, 80 percent of the respondents said innovation is essential to achieving their company’s strategic objectives. And almost three quarters said that budget and resources for innovation are increasing. However, only 25 percent said their product portfolio is highly aligned to deliver the company’s strategy.
Looking at these numbers, it’s clear many organizations stink at delivering on strategy. Executives say their organizations execute on strategy less than a third of the time. Strategic initiatives fail 50 percent of the time. And it’s even worse for digital transformation initiatives, according to a recent McKinsey survey that shows less than 30 percent succeed. When strategic funding is mismanaged, 20 percent will go to initiatives that don’t produce the outcomes needed to meet a strategic goal.
Given these conditions, imagine what happens when disruptions occur in the market like the way Nest changed the game on home thermostats and fitness trackers influenced the way we eat and exercise. What would happen if a new competitor entered your market? How would this affect your strategic plan, if you had one?
It’s in this situation where annual plans fall short as they are nurtured in silos and produce lofty aspirational statements that sit in PowerPoint presentations or on the cafeteria walls. Many of these plans are disconnected from what product managers think or what sales and service personnel experience when talking to their customers. You have to ask yourself – do my annual plans align to producing revenue and remaining competitive?
Time for a Change
So, how can you change the way you think about the issues and strategies that keep your executives awake at night and the products needed to deliver innovation across boundaries and departments?
You can start by breaking down the departmental silos that create business cases and justify budgets over spreadsheets. Those spreadsheets only justify the work their creators want to do. The reality is all of those different disconnected business cases don’t support strategic plans. However, they do produce strategic funding for non-strategic things.
And this is what’s happening across organizations all over the place. Product managers have good intentions as they strive to work across organizations for cohesive and strategic plans so their teams can work on the right things. However, they’re fighting against those siloed spreadsheets that can’t address the changes that their organizations face. This produces an environment where it’s impossible or difficult to work across silos to create an interconnected product roadmap that spans all business cases.
Outdated spreadsheets are the most ineffective tool for responding to market and competitive pressures, new timelines, changes in customer demand, and fluctuating resource capacity.
To address this problem, you have to support strategy differently. It’s about expanding those strategic organizational goals for a bigger picture. Instead of just setting a goal for increasing revenue, think about the targets for increasing revenues. What targets do you need to address? How do you come up with those desirable results that will enable you to achieve these strategic goals? And then think about the products that you need to deliver to achieve those results.
It’s not thinking about the product first and then going back and aligning it to strategy. It’s thinking about strategy first. It’s embracing the uncomfortable conversation of how to increase revenues by 40 percent or how to stay competitive against new players in the market. New competitors will likely use new technologies that you don’t even know about yet.
As you change your way of thinking to address these points, you can change the way you deliver strategic plans that include products. Not a plan that’s driven by products. Then you can create funding and resources for products that support strategy.
Want More? Check Out This Webinar
If this approach rings true to you, check out a webinar Planview produced recently that provides more tips and a demonstration of how to create and put your new strategy to work. It starts with part one of a two-part series called, Strategic Planning: Developing the Right Path to Innovate @ Hyper-Speed.
This webinar will show you how to think about strategy differently and how to put that thinking into action. It will demonstrate how to address individual strategies like taking existing projects to new markets and challenging your organization to succeed in your markets. It’ll also show how to use Planview to increase revenues through new distribution channels, and how to make plans that address current conditions while factoring in the potential for change.
After watching this, you’ll be on the road to creating flexible and strategic plans with true alignment across your entire organization.