The Art of Action - Part I
This blog is based on the book “The Art of Action” by Stephen Bungay. For people interested in the connection between strategy and planning and execution, I highly recommend this book. It is based on military principles to define the target from top level and add more detail to it down the ranks and allow for the flexibility in the execution. To connect the strategy to execution and the ability to respond quickly to events.
In our work at Planadigm, we enable companies to better plan and improve the outcomes of their planning processes. This could be a reduced level of inventory, the ability to create scenarios, the reduction of the number of planners used in the process, or the increase of forecast accuracy, to name a few. We support companies to improve their Sales & Operations planning processes and tools as well as the yearly budget cycle.
We see that the creation of the annual budget is a process that starts (in most large companies) just after the summer recess and ends just before the end of the year. Or ends somewhere in January or even February, when the new year is underway. Employees involved in the process dread this process when they return from summer holidays back to work. The creation of this annual budget is in most cases based on the previous budget, turnover should be x% more, costs needs to be x% less. But the link to strategy is non-existing of very vague. The big issue is not the strategy itself, but the execution of the strategy.
How do you connect the company’s strategy to the budget cycle and day-to-day execution of plans? If not managed well, we see that people keep themselves busy with all kinds of activities, but not the right actions. A waste of resources and time.
It starts at the top, to define a strategy, a strategic intent. It gives an organisation a direction and is time irrelevant. Based on this strategic intent from the top level of an organisation, it is briefed to the next level of the organisation. This next level (think: management) needs to translate this strategic intent into tasks to keep moving forward. It is their translation of the strategy being briefed and the actions/ tasks they need to perform to achieve the strategic intent. This strategic intent is briefed to the next level in the organisation to ripple down to all employees. Each layer adds a level of detail, but keeps the next level fully responsible for defining their own tasks to achieve the strategic intent.
The game changer in this process is the “backbrief”: the receiving level needs to explain in their own words their understanding of the strategic intent to the level above and explain the tasks they are going to perform. With this backbrief process, the sending level ensures that the receiving level has understood the strategic intent and is going to perform the right tasks. The strategic intent is the What & Why, the tasks are the How.
The creation of a perfect plan is an illusion. Yet we spent so much effort trying to achieve perfection. See a plan as an intent, a direction which gives people at the execution levels the right autonomy to make decisions within the boundaries of the intended direction. For that, you must
Decide what really matters: perfect plans do not exist, stop trying to collect more information. Use the knowledge you have to translate that into the outcomes you want to achieve.
Communicate the intent to all layers in your organisation: keep it simple. Don’t tell people what to do and how to do it. Explain the strategic intent in your own words and let them repeat their understanding of it (backbrief) and the tasks they are going to perform.
Give autonomy to perform the tasks: allow for adaptations to the tasks to stay tuned to the strategic intent, set clear boundaries to make decisions and act on what happens in real life.
ON YOUR WAY TO GREATNESS
If you realign on a constant base the outcome of the tasks and actions with the strategic intent, you are on your way to become a great company. The bad news is that we don’t see many companies performing this way. We see a lot of activities within organisations, but not necessarily the right actions. We see a lot of added complexity in the planning processes, thinking that it supports the organisation, but not many activities to simplify the process.
The good news is that with fairly simple steps and adjustments, greatness can be achieved. It allows an organisation to constantly adjust based on events happening and be very flexible in the execution. The planning process and adherence to the strategic intent becomes a guiding principle to achieve the strategic goals. Changes to the strategic intent ripples down the organisation quickly based on the process described above. The actions taken and the outcomes are communicated along the lines to management. Achieving a company that can make quick decisions on the What & Why and the How.