It might seem frivolous to generate business plans for the next three to five years when it seems like we’re facing a new disruption every three to five days. But during times like these, intentionality and planning are most important. When faced with uncertainty, a comprehensive, flexible corporate plan can actually help the business and its various branches stay on course.
The corporate planning process is essential to executing your business plan. Here’s what you need to know to engage in corporate strategic planning.
Why Corporate Strategic Planning Matters
There are different types of planning in the business world, and they can sometimes run together. But a corporate plan isn’t just a business plan by another name: They’re two separate items, and each one plays an essential role in moving your company forward.
Here are some of the differences between business planning and corporate planning, as well as why corporate planning is essential for bringing the business plan to life.
Business Planning vs. Corporate Planning
The business plan typically covers the business’s long-term goals, especially concerning the industry and other external forces. The business planning stage often occurs at the company’s inception or before a significant change is made. The business plan should be reviewed and updated frequently (at least once every one or two years).
Exercises like strengths, weaknesses, opportunities, and threats (SWOT) analysis are deployed at the business planning stage to get a sense of the business compared to competitors.
Corporate planning, on the other hand, looks internally. Corporate planning answers the question of how you’ll carry out the business plan. Corporate plans should span three to five years. Their goal is typically to align business units that have traditionally operated in silos and govern core services like HR, payroll, accounting, IT, and security.
Corporate strategic planning uses similar exercises (such as the SWOT analysis) to arrive at broad operating principles and strategic actions to carry out the business plan.
The Importance of Corporate Planning
Your corporate plan may seem less important than the broader vision set out in the business plan. But without the corporate plan, the business plan has no movement. The principles and actions laid out in the corporate plan are necessary to bring the business plan to life.
If one of your business goals is to increase company profits by 25% within the next five years, for instance, you need a corporate plan to visualize the steps you’ll have to take internally to get there. One key aspect of turning a profit is reducing operating costs. HR can work with other department heads to evaluate employee efficiency, spot weaknesses, and develop a plan to increase profit per employee.
3 Types of Corporate Planning
Your overarching corporate plan should connect areas that have historically existed in silos. Develop corporate plans that cut across and pull together the different types of work within the company.
Here are three types of corporate planning to implement at your company.
Strategic Planning
The corporate strategic planning process evaluates the resources available to the company and identifies gaps that you will need to fill to drive business results. These could be gaps within tangible resources (inventory, technology, or headcount) or intangible (institutional knowledge or role-specific skills).
Within the context of the Growth Playbook, strategic planning usually starts in the same place as the business plan: the C-suite, with critical internal stakeholders present. Business and department leaders need to have a conversation to identify the resources the company will need to carry out the business plan.
The strategic planning process provides a high-level blueprint of your corporate plan and feeds into the operational and project planning processes.
Operational Planning
Operational planning in the business plan lays out the actions you’ll need to take internally to reach those goals. Within the operational plan, you’ll assign individual people to take ownership of those actions.
An objectives and key results (OKR) framework can help take the high-level business plan down to the level of individual actions. Using this model, business leaders set strategic goals at the top, moving down the organization from corporate management to individual team members.
At the team level, managers and employees review the business’s strategic goals and craft their objectives that drive these priorities forward. This process results in clear ownership over each smaller objective feeding into the company’s larger business goals.
Additionally, bringing employees into the process to identify how they can support the business strategy often results in creative solutions to challenging problems. Employee innovations can be standardized and fed into the next round of corporate planning.
Project Planning
Project planning breaks down the business plan into individual projects with defined objectives. The project plan provides a blueprint for project managers to keep costs, schedules, and resources on track to deliver the plan’s results. Where operational planning bridges the strategic and project planning processes, project planning is purely tactical.
With your company OKRs in place, bring project managers on board to help execute them efficiently and effectively. Work with your project managers to evaluate your resources and create a realistic plan for achieving company priorities.
3 Stages of Corporate Planning
Corporate planning is a complex process that requires time and dedication at each stage. The corporate planning process follows three defined stages:
Formulation
Forming the corporate plan is the first step. It should build on the business plan and will require input from critical stakeholders. At this stage, be sure to incorporate some scenario planning. The process of setting long-term objectives for the business plan should have anticipated potential future scenarios. Work contingencies into your final result to account for these scenarios as you form your corporate plan.
You need to create a plan that can flex without breaking, so return to the different types of corporate planning as you form your plan. What skill gaps might be amplified, for example, if the economy rebounds and the demand for your product or service doubles? How might that scenario change the actions you’ll have to take or the resources at your disposal?
Formulating a flexible plan on the front end requires a lot of work but improves your ability to implement and execute successfully.
Implementation
Putting the plan into action requires clear roles and defined ownership over each objective. Before you can implement your corporate plan, you need to confirm buy-in and commitment from each person involved. Without a firm commitment, implementation often fails.
Implementing the plan comes down to setting all of the processes into motion at a high level. This could include authorizing the use of agreed-upon resources, for example, or consulting with team leads as they begin to execute their portions of the plan.
Evaluation
Your job isn’t complete just because you’ve set the plan into motion. You must constantly evaluate your corporate plan as it’s in progress and after it’s done. Check in frequently with department heads and managers to monitor their progress toward their portions of the plan.
Once you have completed your corporate plan, conduct a post-mortem to review what worked and what you need to improve as you design and implement your next plan. At this point, it’s a good idea to revisit your SWOT analysis. How have your strengths and weaknesses shifted? How have your opportunities and threats evolved?
The answers to these questions can feed into the next planning round, providing essential data and a frame of reference from previous experience executing a corporate strategy.
5 Elements of Successful Corporate Plan
The stages of corporate planning inform your process at a higher strategic level. But taking that process down to the tactical, day-to-day level is as important (if not more so) as the process of setting the plan at the top.
Drafting and implementing a successful corporate plan requires a steady tactical process and effective communication across organizational levels. Here’s a framework for outlining and executing your corporate plan.
Establish the Plan’s Objectives
Start with the business strategy and plan. What are the business objectives that the corporate plan needs to achieve? Drive these objectives down to the lowest levels of the company. Everyone must get an opportunity to think strategically and offer suggestions for achieving the larger business strategy.
Don’t be too proud to consult employees on the front lines regarding better and more effective working methods. Front-line employees often have the most significant insights into the processes and actions that bring the most value and drive the best results.
Develop Strategies for Achieving Goals
Break the larger plan down into specific projects and actions, with metrics indicating the success or failure of each venture. Using an OKR framework, each objective should have defined key results that show whether the company has met its objectives. This makes it easy to track progress toward larger business goals.
This is where you can get creative with operations and resources, especially human resources. Don’t confine your objectives to existing teams or departments. One of the keys to harnessing enterprise agility is assembling cross-functional teams to cut across silos.
Cross-functional teams can be risky, especially if the team members have never worked together. Such teams bring together different viewpoints and ways of working that can cause friction. But with the right facilitator, that healthy conflict can bring your corporate plan to life.
Implement Your Corporate Plan
Successfully implementing a corporate plan requires effort and input from every team member. To get that buy-in, employees at all levels — especially the front lines — need to see their role in moving the plan forward.
An OKR framework gives the sense of a flattened hierarchy where individuals can see their roles much more clearly. And when employees can see how they move the needle on business results, they bring more engagement and productivity to achieving them.
However, poor management can snuff out that engagement. To support the plan’s tactical implementation, train managers to manage work by outcomes rather than managing the employees themselves.
Keep Track of the Plan’s Performance
Just because you’ve implemented the plan doesn’t mean you’re done with it: Consult each team lead with ownership over each objective. Ask for their honest input on how the plan is progressing. Make sure that the owner of each objective knows that it’s better to admit that something isn’t working than to keep concentrating employee efforts on the wrong results or no results at all.
With a flexible corporate plan, you can course-correct if it isn’t producing the results you anticipated. In this case, you may need to implement one of your scenario plans to keep things moving forward and in the right direction.
One clear metric for tracking a plan’s performance is to align the key results with employee performance metrics. If employees are achieving their outcomes and are connected with the plan’s outcomes, you can see at a glance when something is off track.
Analyze the Impact of the Plan
After you have executed the plan, spend time analyzing its impact. Did it create the intended results at each point? What could you and your team have done differently to make a more significant impact?
Bring individuals in from across the organization to help with this post-mortem. Ask them to share their insights and experiences regarding the plan’s strengths and where it was weakest. Then, gather input on overcoming these challenges in future corporate plans.
Once you’ve gathered input from a representative slice of the workforce, sit down with the leadership team to apply these insights to the next planning process.
Achieve Your Vision
We can’t know the future, but we can set clear directions we want our companies to take. And, with a clear sense of our business plan and desired business outcomes, we can anticipate the potential challenges to getting there. The corporate strategic planning process takes our vision for the business and makes it possible to achieve.
Corporate planning isn’t an easy process: It forces you to be intentional, seek out new perspectives, and implement innovative ideas. But when successful, your corporate plan drives actual business results, helping you turn your business vision into reality.
