Whether you are developing a new marketing program, product launch, or business strategy, disciplined planning makes sure you are asking yourself and your colleagues the right questions, drawing the richest implications, and identifying new opportunities with the greatest leverage.
Throughout three decades of planning, I have encountered and developed some best practices and have found that the best results come from facilitated conversations that seek to answer the right questions, based on sound data and confronting the brutal facts of the business.
Reviewing the facts, asking questions, and probing the issues provide a far better outcome than seeking to produce documents or presentations. Business planning should not be about producing a Powerpoint deck to show stakeholders once a year. Nor should it be about establishing rigid rules for engagement and execution. Instead, great planning is simple, disciplined and flexible. It results in a road map that is based on sound analysis, innovation and creativity. It has been my experience that the best planning occurs at the intersection of quantitative analysis and expansive creativity.
The reality is that there is no pre-determined solution that fits every company’s needs off the shelf. None of those can do the strategic thinking work for you. Instead, great results come from facilitating your journey through a strategic planning process that fits your company’s structure. A journey wherein you review the data, ask the right questions, derive powerful implications, identify opportunity, and coordinate alignment of your employees as well as the synchronization of the interdependent parts of your organization.
I’ve found that the essential task of planning strategy is to see a multitude of opportunities, a universe of possibilities, and to then select the best constellation of 3 to 5 opportunities that will provide the greatest impact. I’ve seen companies plan in such a way as to try and capture too many opportunities or possibilities at one time. They focus on how to organize their company to try and capture all the possibilities they see. Smart people will always be able to identify more opportunities than it makes business sense to go after. Instead, focus should be on identifying the 3 to 5 possibilities that in the right constellation will support one another in execution, maximize income, and not lose sight of reasonable risk and investment. With this task in mind, I developed a simple planning model called Level Order Planning that uses a simple geometric device to illustrate how best to focus an organization’s execution.
Level order planning is the name of a planning process wherein a pyramid is used as a visual device to illustrate the way objectives and strategies cascade throughout an organization.
The Planning Pyramid is divided into three layers. Each layer corresponds to a different level of planning. The top of the pyramid is referred to as Level 1. This is the level where the macro level strategy for the organization is created. This is usually the strategic plan created by the CEO and their direct reports. Together as the leadership team of the organization, they determine the vision, mission, objectives and strategies that will drive the rest of the company’s focus. It is also at Level 1 where a balanced scorecard approach is developed and embodied in the strategic plan.
It is at Level 1 where the leadership team analyzes data, asks questions, draws richest implications, and identifies the new constellation of opportunities with the greatest leverage. This occurs by the leadership team being well informed and spending time together analyzing, discussing, debating, identifying and choosing. Great strategy arises from great conversations. Data alone won’t make strategic choices for you.
Level 2 corresponds to the next level where planning occurs. Exactly who is involved in planning at the level depends on the organizational structure of the company. Most often, Level 2 planning corresponds to each of the direct reports of the CEO, and are in the form of business units, divisions, and/or functional areas such as finance, legal, and HR.
Just like the CEO and his/her team are the ones to analyze, discuss, debate, identify opportunities and choose strategic areas of focus, the core team of Level 2 is the direct report of the CEO and their corresponding direct reports/team. Their job is to discuss what to cascade from Level 1 to their Level 2 plans. They also need to identify any level specific opportunities that need to be considered and planned for.
Level 3 planning corresponds to either the direct reports of those people planning at Level 2 or to a region or country level operations and its subsidiaries.
Further levels can be added for more detailed planning, however, depending on company size and structure, companies just as often move to setting individual objectives after Level 3 planning.
As the Planning Pyramid shows, each level below Level 1 cascades the Level 1 plan as the core of their level’s plan. Level 2 decides what each planner can do to support Level 1 objectives and strategies. In a perfect cascade, the higher level’s strategies become the next level’s objectives. However, in the case of Level 2 planning, many Level 1 objectives and strategies may cascade directly to Level 2 plans as their objectives and strategies.
Each level has the opportunity to add additional objectives and strategies that were not present in the level plans above them. These additional objectives and strategies correspond to specific areas of focus unique the business unit, division, function, region or country involved in planning at that level. It is important that all additional objectives and strategies at any level are approved by the level above. This allows the organization to control the width and therein the focus of the Planning Pyramid which illustrates the strategic focus of the organization.
This is a brief overview of how Level Order Planning and the Planning Pyramid can help to guide and organize a planning process that fits the structure of your organization. The result is powerful alignment top to bottom.