Alternative Development Warning Flag 1 – Developing Business Cases First
All business leaders are human and some get overly enamored with and excited about a particular business opportunity. These business leaders then direct either a business case or project plan to be developed which is immediately funded; circumventing the organization’s business planning process. In these cases, the initiative’s ability to meet the organization’s business objectives and goals remains uncertain and consideration of competing opportunities is forfeit. In some organizations, entire portfolios are determined in this fashion; leaving leaders blind with respect to their ability to optimally achieve the organization’s mission goals.[wcm_restrict plans=”25541, 25542, 25653″]
Failing to vet each ongoing operation, in-progress project, and proposed initiative through the business planning process places the organization at significant risk. Not only does this prevent leaders from identifying the optimal use of resources for achieving mission goals, it risks duplication of effort, execution of conflicting activities, and loss of organizational buy-in and commitment. The lack of clarity for achieving organizational goals subsequently serves to also reduce the accountability as workgroup and individual responsibilities become less clear.
Executives who subvert the business planning process by taking it upon themselves to immediately define the organization’s ongoing pursuits risk damaging the organization and ultimately causing its utter failure. While not all inclusive, the four lists below, Process-Based Warning Flags, Process Execution Warning Flags – Behaviors, Potential, Observable Results, and Potential Causes, are designed to help executives recognize whether one or more members of their team is circumventing the business planning process and placing the organization at risk. Only after a problem is recognized and its causes identified can the needed action be taken to move the organization toward improved performance.
Process-Based Warning Flags
- Lack of a business planning process definition
- Decision-making authorities are not clearly defined or are not integrated with the business planning process
- Project review board, steering committees, and registers are not used to control the introduction of initiatives that have not received proper programmatic authorization
Process Execution Warning Flags – Behaviors
- Business planning is largely conducted as a part of the annual executive offsite meeting
- Executives maintain most or all of the decision-making authority within their office
- Managers and employees seldom question executives’ decision-making authority or their decisions
- Executives and managers often report projects as being successful because their intent was met rather than based on objective, quantifiable measures
Potential, Observable Results
- Assessments of organizational initiatives yield no clear, focused goal
- Projects are not well coordinated, may duplicate effort, and may conflict in objectives
- Project delays occur because of a lack of resources
- Project implementation is slow and may fail because of a lack of cross-organizational buy-in and support
- Organizational performance, both financial and productivity, lag marketplace competitors
- Executives, managers, and employees are unclear as to the organization’s goals and priorities
- Accountability, both positive and negative, within the organization is low owing to a lack of clear direction
- Organizational attrition is higher than other comparable organization’s because of worker frustration
- Executives feel entitled to make all organizational decisions without consultation or input from other sources
- Executives believe they know what is best for the organization and need little to no input from peers and subordinates
- Executives do not value their peers, managers, and staffs
- Executives treat the annual executive offsite as the sole business planning session
- Executives lack the ability to delegate
- Executives do not value the business planning process
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The following StrategyDriven recommended best practices are designed to reduce the likelihood of circumventing the business planning process:
- Alternative Development Best Practice – Organizationally Developed Options
- Strategic Planning Best Practice – Shared Accountability
- StrategyDriven Podcast Special Edition 32 – An Interview with Nilofer Merchant, author of The New How
Additionally, StrategyDriven‘s Strategic Organizational Alignment model reveals the typical executive and managerial responsibilities associated with the business planning process.
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