Enterprise Strategy Department Organization Primer - Part 2 of 2
Part 2: The Expanded Functions of an Enterprise Strategy Department
This is the second in Forum Solutions’ two-part series: An Enterprise Strategy Department Organization Primer. In the last segment we discussed the primary core functions of an enterprise strategic planning department:
In addition to core planning and development activities, many strategy departments evaluate mergers and acquisitions, provide analytics on the competitive landscape, and other impactful services. Depending on the size of the strategy department, these services might be performed by the staff already within Strategy Development and Planning or done by unique separate teams housed within (or parallel to) those departments. Here are some typical expanded functions of the strategy team and where they are housed:
Figure 1 Enterprise Strategic Core Department Organization
Figure 2 Strategic Planning Department Expanded Functions
Expanded Functions: Corporate Development (“Corp Dev”)
This function is focused on the financial and strategic evaluation of new opportunities to drive strategic objectives. Often, they try to answer:
Should we build, buy, or partner?
If we buy or partner, what should the deal structure look like?
Some examples could include evaluation of a hospital acquisition, a joint venture to launch a new product, equity investment in a start-up for access to their intellectual property, or a licensing agreement to allow others to utilize internal intellectual property.
Often Corp Dev groups are located within Finance due to their heavy emphasis on financial modeling and are staffed by former investment bankers.
Note: Occasionally business development functions are also linked to this category. More typically, less transaction focused business development departments are located within sales or marketing as they are another channel for driving revenue.
Expanded Functions: Internal Consulting
Strategy Development professionals assume an internal advisory role. When demand is sufficient, some organizations utilize a hybrid model for consulting services: they maintain a high-caliber internal team to address internal needs for strategy development, and outside firms are then utilized for:
Specialized expertise
Flexing up for large efforts
These individuals support strategy development or planning by working with internal stakeholders to evaluate opportunities, build business plans, develop 3-year plans, or provide additional support for strategy realization. Typically, they have former consulting experience working for an outside firm.
Expanded Functions: Strategy Realization (or Strategy Enablement)
Increasingly, Strategic Planning departments are being asked to ensure that strategic plans are being successfully realized. A best practice framework in ensuring this is the Enterprise Planning Lifecycle (EPL):
Figure 3 Enterprise Planning Lifecycle (EPL) Framework
The department often tasked with enabling the EPL is the Enterprise Portfolio Management (EPM) department, which differs in scope and approach from a traditional Project Management Office (PMO) with respect to the integration of the strategic planning process across the entire enterprise. The EPM department supports strategy enablement through designing and facilitating:
The annual strategic planning cycle
Plan budget integration
Tracking, monitoring, and review vehicles and venues
Robust governance structures to ensure success
Feedback mechanisms to inform the next planning cycle
The coordination across Finance, Strategy, and Operations to ensure success
Project deployment tends to be in the purview in of the PMOs [see segment (V) in the EPL Framework] which is a recipient of the prioritized plan from the planning department. The EPM team often will flex into strategic development functions as the need arises. A more detailed piece describing the EPL and EPM function can be found here.
Expanded Functions: Strategic Intelligence & Analysis
Strategy Departments often have dedicated analytics resources for the various needs across strategy development and planning, they could include, and are not limited to:
Competitive intelligence
Market landscape (incl. market share)
Some forecasting, in partnership with finance, typically with respect to market sizing
Creation of dashboards to track progress against the strategic plan
Board report support
Business plan analysis support
Often these groups flex across strategy development and planning.
Strategy departments can vary significantly from organization to organization. Some might be more focused on M&A, others on sales enablement, and some models have strategy decentralized and located within product teams. Regardless, an overarching objective for centralized strategy development and planning department tends to be that they are enablers meant to:
Help set the direction of the company
Craft the associated proposals and plans
Ensure that the right mechanisms are in place to realize the plan
Track progress and adjust the plan when necessary
Enable innovation
Have a future looking perspective.
For more insights, see: Enterprise Strategy Department Organization Primer - Part 1: The Core Functions of an Enterprise Strategy Department
Forum Solutions has experience working with executives on strategy development, planning, enablement, and execution across a variety of industries and verticals. If you are interested in management consulting support for any of these areas, please do not hesitate to contact us at info@forumsolutionsllc.com.
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