In a competitive world, all recognise that they need to be "strategic focused organisations - SFOs" to succeed. The question is where does the role of strategic planning sit, and how must it be configured to make it most effective.
The tendency has been to assign the responsibility to the CFO, with the assumption that the finance organisation has all the numbers and a good understanding of the organisation. The finance department often has a great understanding of the numbers, but not what drives them from a product, process, organisational and IT perspective. In my perspective, strategic planning needs to sit nice and tight right next to the CEO.
Organisations which have got this right have generally put a senior strategic planner in the role. With organisations and markets becoming complex, it is not possible for an individual to address both the market and functional complexity, and therefore my submission is rather than being an individual, it needs to be a team, or a strategy management office (SMO).
So what's the role of an SMO? It should focus on the following - assist in the development and roll out of the corporate and divisional strategy, in the alignment of the budget to strategy, produce executive level MIS to facilitate strategic decision making, coordinate executive committee meetings, map the external environment for new business including M&A opportunities & changes in the demand and competitive sector for existing businesses, working with external consultants on strategic projects, and prepare strategic presentations for the board and external audiences. All these make it obvious that it's not a one person job.
The SMO could have three-six individuals depending upon the size of the organisation and number of divisions. I would structure it in a way where part of the team is focused on tracking the external environment, part of the team is focused on assessing the internal performance of the organisation at a strategic level, and part of the team focused on developing and reporting strategic MIS/EIS.
A common question is what are the skills required for the team? Strategic thinking does not come naturally to most, and the SMO is not to be a dumping ground of operational executives for whom no operational role can be found. I think it's a good idea to hire a management consultant who is tired of the travel and wants to improve work/life balance to head the function. Below him/her needs to be a team that has some operational experience, extremely strong analytical experience, and has great communication skills. Less arrogance of being close to the king will help! And a reasonable level of maturity so that others within the organisation feel that the team has operational experience and therefore is credible.
I have not spoken about using the office as a project management office (PMO) from where all strategic projects can be mandated and monitored. There is a possibility of rolling into the SMO, the PMO. I will address the issue when I discuss the PMO the next time. Less than 15 per cent that can formulate strategy, execute successfully. Let the SMO improve your odds, so that getting your strategy right has better odds than a lottery!
- The writer is managing director of Cedar Management Consulting International.
