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By Omar Aguilar
The final and most important element isn't to plan, budget, forecast, report, or reward, but to act-to manufacture products, perform services, or serve customers; to create income; and to earn profits. All other functions and processes should exist to ensure that employees are carrying out the right activities and have the resources they need to succeed.
STRATEGIC PLANNING
In many companies the strategic plan is more of a mission statement than a road map. The real planning, as often as not, is driven by the budget process, which determines where resources will be allocated. Those allocations, in turn, shape the operational plan. The final operational plan often reflects how well executives compete for budget rather than what senior management actually hopes to accomplish.
To change this ineffective planning process, senior management must lead the change process and demand that the operational plans and budgets fully support the implementation of the strategic plan. In short, management must establish clear strategic goals that can be translated into specific actions.
Companies pursuing a workable strategic plan usually assign small teams of top executives to set their goals using a rigorous planning process. Typically these teams start with a thorough analysis of their industry, markets, customers, products and services, competitors, and internal strengths and weaknesses. Most use a top- down process, but some combine this with a bottom-up approach that enables middle management to bring their local knowledge into the process. Such a flexible approach helps build middle-manager ownership and motivation.
Once the planning team has developed actionable goals, they "cascade" these goals down through the company. At each level, the planning team works with operational management to determine specific actions and priorities. By bringing operational management into the planning process, the company's leadership gains buy-in and ensures that staff at all levels knows what must be done. Operational management gains a clear understanding of what success looks like and how it will be measured. Ultimately, everyone knows his or her goals and is accountable for achieving them.
To create a clear link between employee activities and the goals of the organization, Georgia-Pacific restructured its personnel management process and tied it much more closely to the strategic planning process. Now the company's strategic planning process generates goals and measures that are set in January and are cascaded to all levels of the organization. Performance management then links these corporate goals to individual performance targets, establishing a clear link between corporate objectives and daily employee activities.
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