Part 2: The Enterprise Planning Lifecycle (EPL) Framework

This is the second in Forum Solutions’ four-part series: An Integrated Approach for Maximizing Strategy Realization: The Enterprise Planning Lifecycle.

In the last segment we discussed how to address the increasing pressure on C-suite executives to deliver sustained value from the strategic planning process. We hypothesized that once planning is complete, execution remains too functionally siloed in the organization. We proposed that an integrated formal Enterprise Planning Lifecycle (EPL) could be deployed to ensure improved strategy execution and ultimately, financial performance:

The key to this EPL framework is strong C-suite Governance facilitated by an Enterprise Portfolio Management (EPM) shared service function or department. A high-level committee chaired by a C-suite executive oversees the performance of the overall EPL, with subcommittees organized around major categories of strategic importance (e.g. high priority initiatives and investments) to drive accountability deep into the organization. Each segment in the EPL represents a discrete activity associated with strategic planning and the team expected to perform the activity. The essential activities that are developed and managed by this function are

Figure 1 Forum’s Enterprise Planning Lifecycle Framework: *Grey: Finance; Blue: Strategy; Green: Operations/Project management*

Long Range Financial Plan (LRFP): A 5- to 10-year (for capital-intensive organizations) goal setting exercise focused on establishing margin targets and broad capital and operational expense plans.
Strategy Development & Global Prioritization: A long range focus across the 3- to 5-year horizon. Although typically associated with enterprise-wide planning, this would be performed at the department level. Activities prioritized in this segment are tied to the enterprise mission and represent broad categories, or “themes” (e.g. innovate in Digital Health, drive international expansion, increase customer satisfaction) versus specific initiatives. More refined capital and operational allocations are formulated at this phase, as are initial target goals (e.g. total increase in new customers).
Localized Planning: A near-term exercise (1 to 3-years) for local departments or business units to further develop, refine, model, and prioritize specific initiatives. Initial business plans for key efforts are formulated during this state. More detailed Key Performance Indicators (KPIs) are also developed at this phase. These KPIs include financial measures as well as potential leading indicator process measures. There is often a feedback loop to the Strategy Phase (II) if there are material changes in prioritization, resource needs, or other constraints that significantly reduce the ability to execute.
Budget Integration: Once near-term plans and resource requests are approved, they are ready for budget integration. Budget integration is one mechanism for accountability and tracking but is typically not robust, comprehensive, or timely enough to provide all the effective indicators to manage performance.
Deployment: Action taken by the parties responsible to execute on their plans (III). The next two phases (VI & VII) occur concurrently with this phase. Phases V-VII are typically within the purview of a Project Management Organization (PMO), but PMOs tend not to have responsibilities across the entire integrated EPL or support C-suite governance.
Monitoring & Forecasting: This segment includes setting the instrumentation to track and monitor performance of the deployed initiatives (V) against the goals established in the Strategy (II), Planning (III), and Budget (IV) phases. Forecasting, often performed with Finance, includes the estimation of goal achievement based on external conditions and operational activities to date. Some organizations use forecasting estimates to actively adjust their budgets accordingly.
Intervention: Based on current and forecasted performance against goals, organizations can take different approaches to course correcting: adjustments to initiative deployment plans, increasing resources, refocusing accountability, or developing alternative initiatives to replace a failing one. Strong oversight, governance, and focus is critical in this phase for effective performance recovery.

How the organization performs during the EPL informs and provides feedback for the following year’s planning activities. This cycle continues yearly.

The EPL segment activities in isolation are not unique, most organizations have these functions, but the advantage comes from establishing a formal integrated process. Working effectively across multiple departments in a high stakes environment requires enterprise-wide coordination and accountability. That is why "big G” governance at the C-suite level (as represented by the outer ring of Figure 1), is essential to make sure benefits from any strategic planning process are realized. As typically all these EPL segments are owned by their respective departments, it is important to establish a shared service with the mandate to facilitate the EPL across all these functions to gain these benefits:

Improved performance through increased accountability: When the C-suite actively tracks strategic efforts from inception to deployment to performance and back again, they have a unified sense of how the enterprise is likely to perform and when to intervene before it is too late. Without standard centralized processes, governance structures, and tracking, organizations lose focus on what they have in process and tend to look at the “shiny penny” or hot new initiative.
Centralized management increases confidence: Establishing a formal EPL and a shared service team to facilitate the EPL increases confidence that enterprise priorities are less likely to slip through the cracks and underperform. This confidence is equally shared by a Board of Directors confident in the fact that formal processes are being used by the C-suite to deliver on their enterprise objectives. Rather than losing energy wondering if strategic initiatives have been launched and how they are performing, executives can focus on what else can be done to meet and exceed enterprise objectives. This often translates into increased bandwidth for innovation.
Process standardization highlights opportunities: Struggles in a newly formalized EPL can highlight other opportunities. There might be an opportunity to increase planning alignment between major departments and supporting services for better global optimization and deployment of scarce resources (e.g. software developers). For example, the lack of 3-year roadmaps by major departments creates more churn when prioritizing a global IT deployment pipeline. When departments do not prioritize their needs and work in concert with IT on their resource constraints, IT organizations find themselves constantly in a reactive mode to last minute requests, creating churn.
Cultural transformation at scale: Increased accountability and visibility for leadership enables communications teams to propagate clear strategic objectives throughout the organization, thereby increasing momentum and performance gains.

In the next part of the series, we will describe how best to approach the EPL journey for any organization.

Forum Solutions is a management consulting company dedicated to crafting and delivering transformational outcomes for our clients, our colleagues, and our community. With our help, clients become more agile, resilient, and connected, bringing great ideas to fruition with brilliant results. From start-ups to the Fortune 50, business leaders rely on Forum Solutions to help them form and realize their strategies. Our company is a certified Woman Owned Business that believes in developing and growing our colleagues, company, and region in a socially conscious way.

An Integrated Approach for Maximizing Strategy Realization: The Enterprise Planning Lifecycle - Part 2 of 4

Part 2: The Enterprise Planning Lifecycle (EPL) Framework

Associate Spotlight: Emily Reitman

An Integrated Approach for Maximizing Strategy Realization: The Enterprise Planning Lifecycle - Part 1 of 4