Thursday, January 21, 2021

BoD's Planning Oversight

The corporate board’s planning oversight is crucial to identify and strengthen the weakest link in strategy management, laser focus on the most critical perspectives to steer the business in the right direction,

Digital transformation represents a break from the past, with a high level of impact and complexity. Strategic Planning by definition is translating the company vision into broadly defined goals or objectives and it is part and parcel of strategic development and execution. 

Strategic oversight is one of the most critical judiciary duties of corporate boards, to help the top management identify blind spots, clarify priority, and avoid pitfalls on the way of business management. Inquisitive BoDs ask tough questions to attract insightful answers for enforcing planning. 

Does your planning put you ahead of trends? With unprecedented uncertainty, high velocity and information exponentiality, the focal point of digital management is based on the future trend, based on the varying situations; and based on what the system requires for its long-term sustenance.  Opportunities and risks coexist in the business ecosystem nowadays, good companies predict trends, great companies create trends. BoD leadership needs to be future-oriented and further-looking, so they can scrutinize strategic planning with a clear business vision, the collective and broad range of business perspectives.

There have been changes all along, the pace of disruption is very high this time around. Does your planning put you ahead of trends? Often technology is the disruptive force behind innovation, digital organizations today have to leverage information technology and enable desirable emergent property to get ahead of riding trends.BoDs ask business management to look at what's happening now, what’ll happen and what's coming down the pike so they can be proactive in preparing for it. The point is how to capture the positive trend and climb ahead of learning curves. The trick is to recognize negative trends early enough to change direction.

Does your planning tap a true source of advantage?
Good strategic planning helps organizations extract the maximum value from their organizational capabilities portfolio to inform decision-making at multiple levels, and to drive strategic alignment and optimization. BoD’s oversight helps organizations define and deliver organizational capabilities aligned with their strategic goals and objectives, prepares the strategic planning to point the company in a direction where it can maximize its market position and reap as many benefits as possible.

The strategic direction of the company must allow for economic, market or customer change and let business adapt smoothly, tap a true source of advantage. So the organization can leverage the capability-based strategic plan to drive budgets and prioritization, and improve the success rate of strategy management. Planning and execution is an iterative continuum. A capability based planning will get reluctant stakeholders to want to contribute in the next iteration and give business functions enough time to develop good sub-strategies to deliver them.

Is your planning contaminated by bias?
Statistically, across the sectors, the high ratio of strategic planning has been made poorly and caused the catastrophic effect. Bad planning is too empty to follow through, or too verbose to highlight the key. Poor judgment, the variety of bias contaminate a strategy, and cause planning fallacy. Bias or cognitive gaps come in many forms and are difficult to recognize. At the group level, the homogeneous management team setting spurs groupthink and creates blind spots or bias in planning. Thus, BoD’s oversight helps to improve planning effectiveness and maturity.

Modern management is both science and art. To avoid planning fallacy, it’s important to practice self-awareness and accept vulnerability. A diverse perspective is crucial for thoughtful planning because no individual has all the necessary expertise. To deal with a variety of bias, we should learn from both our own experiences and from others’ lessons, as well as collective wisdom. The difference is in utility between one’s own experience and the experience of another. Planning effectiveness is not only based on the decision-makers' intelligence, skills, tools, but also based on having a dynamic planning scenario to evolve the emergent business property.

Does your planning rest on insights? Given the complexity and uncertainty of the digital business world and given the challenges of today’s complex business problems, more often than not, lack of business insight leads to poor strategic planning for the long run. Because knowledge about the past is only an imperfect guide to what the future holds. Also, use the team perspective to identify the most promising alternative.

There's nothing to be done about an uncontrollable situation although a good plan can identify the external factors, and the good process can enable a company to work around the externals. The insight of the situation requires an in-depth understanding. Business insight at the top leadership level enforces understanding, connection, discernment, personal experience, penetration, and perception for either scrutinizing strategies or monitoring implementation.

Have you translated your planning into an action plan?
The plan is nothing but planning is everything for adapting to the "VUCA" business new normal. The disconnect between planning and implementation occurs when the wishful thinking at higher levels detaches from the reality at lower levels. Strategy execution plans are living documents that require ongoing monitoring and adjustments when needed to address unforeseen changes in the business ecosystem.

Because business planning provides direction, the boardroom oversight of business strategic planning helps to identify blind spots, close gaps between planning and actions, diagnoses issues, and outlines the preferred course of action. Generate some distinct alternatives that could pursue the objectives. It means even if there’s only one destination but it may have a multi-route to get there. If people try to come to a consensus via one single choice, this can overlook key points of information.

The accelerated change doesn’t make business planning obsolete though. On the opposite, planning and forecasting become more critical, even if it is challenging. The corporate board’s planning oversight is crucial to identify and strengthen the weakest link in strategy management, laser focus on the most critical perspectives to steer the business in the right direction, The healthy planning-adjusting-evolving digital refinement cycle creates the business synergy to strive vigorously in leading digital transformation.


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