If you haven't already, read PART 1 and PART 2 of this 3 part series.
Sustaining results over the long term with your team
In the first two articles of this series, we focused on team dynamics and processes to help business leaders navigate the complexities of the current economy. From aligning teams around the priorities and resources to deliver the bottom line, to driving cross-team collaboration that enables effective execution, we discussed how leaders set up their teams for success and avoid missteps.
But how do you ensure your teams are playing the long game? That current execution is linked to your long-term strategy and consistently delivers results for your stakeholders?
In this article we focus on how to sustain gains over the long term. We challenge the efficacy of the traditional annual planning cycle and offer an alternative with a longer planning horizon that identifies resource and execution requirements in advance, so your strategic priorities remain on track and you avoid costly mistakes.
Forward-looking business reviews link current execution with the long-term strategy and ensure resources are in place at the right time to maximize productivity
Planning and alignment are ongoing, iterative processes that can easily break down if leaders fixate on the rearview mirror. Retrospective business reviews that assess whether initiatives are on track are critical but fail to provide up-to-date clarity on where the business needs to go. The most effective business reviews answer “where are we now?” within the context of “where do we go from here?” Balancing these questions with equal weight allows leaders to keep teams aligned and provide actionable guidance to execute effectively over the long-term.
Most companies have multi-year strategies or vision statements that describe what they seek to accomplish over periods of usually 3-5 years. But they tend to execute against the strategy incrementally in annual plans—documents too narrowly focused on the outcomes of a single planning year that simply pick up where the previous year’s results left off with a new plan to advance the goal further in the coming year.
This static method of planning for and reviewing performance fails to link current execution to the objectives of the multi-year strategy, nor does it forecast resources and execution requirements that should be synchronized over multiple years to ensure the company achieves its long-term objectives. This heightens the risk of resource misalignment over time and the potential for wasted effort and unnecessary costs.
McChrystal Group research indicates companies who can balance short- and long-term objectives had 160% greater median income growth 12 months later than companies that struggle to balance current execution with long-term objectives.
How can leaders tackle long-term resource planning in a high-cost environment that presents far more questions than answers?
A quarterly rolling operational plan review (ROPR) provides both a critical review of the previous quarter’s performance as well as a forward-looking assessment of the execution requirements and resources needed to keep the company’s strategic priorities on track. For most companies, a 6-quarter forward view is appropriate, but some may consider an 8-quarter view more relevant, particularly companies with long research and development pipelines or long lead time seasonality trends like apparel.
During a ROPR-style business review, each team with responsibility for a strategic initiative begins with a detailed performance review of the latest quarter and the status of associated actions, financials, and resources. The focus is to determine what is working and what is not. For actions off track, the question becomes “why?” Is it a performance issue or a resource issue? Corrective actions are discussed and decisions made to fix what is not working.
In some cases, particularly for failures in back-to-back quarters, a more impactful discussion and decision should center on whether the initiative is actually a viable effort. It might have been a “bad bet” from the outset and the right decision is to discontinue it without allocating more resources to a failed initiative.
The team then transitions to the actions, timelines, and resources required in the upcoming quarters to advance the initiative toward delivering results that support the company’s long-term objectives. If your company is already executing a ROPR, the team updates the next five quarters that were briefed at the previous review with updated, tighter information. The sixth quarter out is additive with a rough view of the execution timelines and resources required.
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