Thursday, August 11, 2011

In Business Planning, it's not size that matters, but how you use it.

Business planning is a competency that successful companies have acquired over time.  The question is:  how should the planning function be structured within the organization to optimize resources and achieve competency? We tend to think that size matters. I suggest it is not size, but how the function is utilized. 

I have led planning departments in silo driven organizations where department functions are hived off from one another and in a shared services organization. I prefer the shared services model because it is more efficient, engaging and builds organizational competency in planning. 

The silo model is more expensive to the organization, and may not necessarily result in the ultimate goal of building organizational competency for business planning. I would suggest that the days of large internal planning departments are less effective both financially and culturally. 

Consider the following.  

 A larger organization of 500 - 1000 employees, for example, often has a 6 person executive team, covering off the competencies needed to run the business: Finance, Communications, Human Resources, Technology, Operations and Marketing. Each of these executives is responsible to lead the organization to its strategic future.  From a resource perspective, their commitment to strategic planning should be about 80% of their time.  The other 20% of time should be dedicated to providing direction to their respective departments. 

In the Corporate environment where the governance structure consists of a shareholder or owner and board of directors, the business planning function often includes a strategic and operational business planning process, reporting cycle and development of business documents such as the business plan, quarterly reports, board reports, staff communications and strategies. The business planning function must also facilitate integration with enterprise risk, finance, communications and human resources performance management processes.  

In the silo business planning department model, the staff compliment may include a director - level at $100K plus, an analyst at $65K, a manager at $75K plus, and an administrator at $45K  for a grand total of almost $285K plus benefits.  

Here is a breakdown to time for a department that runs the corporate planning and reporting process:
  • Administration:  8 weeks / year.   
  • Document writing and review:  12 weeks/year. 
  • Research and analysis of the environment: 3 weeks 
  • Balanced Scorecard development: 3 weeks 
  • Facilitation of executive, board planning:  4 weeks 
  • Facilitation of management planning (assuming 6 departments):  6 weeks 
  • Approval process:  3 weeks (assuming board and shareholder)
  • Reporting coordination, writing and review:  4 weeks 
That's a grand total of 43 weeks / year.  The average available number of weeks for each employee is 32 weeks, allowing for weekends, statutory holidays, days off and vacations.  

The price tag of $285 K plus benefits does not utilize resources well, nor does it invite integration or shared learning. The resources are not utilized to their full capacity.  If the department is staffing 4 full time equivalents (FTEs), that means the company is paying for 128 weeks of time, 85 of which are not being used effectively.   

However,  in a shared services model, it is possible for one person with senior capabilities to lead the process with support. The Office of Strategic Management Model (OSM) by Kaplan and Norton provides the structure for this approach.  

In the OSM model, the role of the business planner is to direct and facilitate the process from the board, executive and management level, as well as to develop and implement the processes for implementation within other departments. 

The business planner will need access to administrative support to coordinate the process and book meetings, etc.(about 8 weeks / year), a person with communications expertise to help with the writing and document preparation and reporting, (about 12 weeks / year) and the borrowed time of a research or policy analyst if one exists elsewhere (about 4 weeks / year).  If the organization has a project management office, then a project manager's time of 4 weeks can be useful in assisting with the development of initiative plans that will later become projects.   

The business planner works hand in hand with the executive and the various managers to facilitate the development of integrated plans.  He or she must be adept at building relationships, interpreting information and working in an integrative manner across different teams, establishing a cooperative and collaborative approach.  

Given the role as director and facilitator of board, executive and management planning, the business planner requires an outsider's view. As an employee, the functionality can be marred by internal politics or power struggles which can cloud the process.  The business planner ultimately is responsible to the CEO, and therefore should not report to an individual member of the executive, but should work with all executives. 

Therefore, in my experience, while there are benefits to being an employee, there is greater value for the organization to hire an external resource on a 3 to 5 year contract to lead and integrate the process within.

 The organization can realize the same benefit for nominally less than $285K per year by using an external resource and opening the doors to an integrative shared services environment. 

The big pay off with an OSM / shared services model  is the creation of a strategy focused organization.  The company builds competence in business planning through engagement and making it part of their jobs.  That way, the organization is more successfully able to communicate the plan and integrate it into performance management processes at the employee level.  

Culture plays a big part in the success of the shared services / OSM model, where learning and cooperation are not only preferred, but expected.  From a leadership perspective, this type of organization is more effective and engaged, thereby increasing the opportunity for success. If the executive is indeed dedicating 80% of their time to strategic and collaborative leadership, then the shared success model has a greater chance of success.  

Once an organization can bring plan, people and processes together, profitability becomes more accessible.  The organization through this process of alignment becomes nimble and able to act on opportunity and weather storms.

Thursday, August 4, 2011

On the day of emancipation wear gold.

Emancipation is a rarely used word dating back to the 1630s.  Packed with emotion, it means to be freed, or to liberate.  It can also refer to freedom from inhibition and convention.  (Online Etymology Dictionary @ 2010 Douglas Harper).   

Great emancipation tends to be associated with the abolition of slavery, and political freedom. In a less formal sense, emancipation can refer to freedom from relationships that threaten the well being of the person or people.

The color gold tends to be associated with emancipation to represent the reward of freedom, and the celebration of opportunity. I am recently emancipated. 

 For the first time in my life, I am not an employee by my own choosing. I am the President of my own company - Lynear Thinking Strategy & Communications Consulting Ltd. 
This has been a dream of mine since 1996 when I first created my own definition of freedom for a corporate blue sky meeting.   I shared a vision about an environment that is creative, entrepreneurial and optimistic. Where there is no "no", just "how."  Where vision leads, and passion guides. Where inspiration is the breath of innovation. Where respect, honesty and integrity are the foundation.   
Throughout the past 16 years, I have been a good employee, dedicating myself every day to be good at what I do with results.  I wrote the book on annual reporting, resulting is 4 consecutive Awards of Excellence from 1996 - 2000 and then I created plans that caught the Auditor General of Canada's eye from 2000 - 2002. 

 From 2002 to 2011, I successfully designed and implemented integrated corporate performance management programs for Government, the Saskatchewan credit union system, private companies and non-profits. I established an award winning Corporate Social Responsibility framework for a gaming organization in 2010.  In 2010, I was inspired by George Reed as a great humanitarian, and dedicated myself to helping him to re-establish the George Reed Foundation.   

I believed and worked by the principle that when you do good things, good things happen from a job satisfaction perspective, as well as a monetary and security perspective. I have been very fortunate to work with great organizations and great leaders.  My former Vice Presidents are now my mentors.  My former employees are now my colleagues. 

Emancipation is impassioned by a resounding and deafening cry for change and for new directions.  This is mine. To work with and for organizations and individuals where vision leads, and passion guides. Where inspiration is the breath of innovation. Where respect, honesty and integrity are the foundation.