Full Article: Integrated Planning

Here is a link to the full article Integrated Planning. There have been significant revisions from recent posts so I suggest downloading and reading this version.

Strategy Crafting and Integrated Planning

Strategy Crafting is my own view of strategic planning. It’s a label I’ve created to help me think through the past, present, and future states of strategic planning theories and applications and a focus for my writing. For a deep dive, see postings on Innovations in Strategic Crafting at http://strategycrafting.blogspot.com/.

Pulling it all together. Integrated planning helps bring strategy to life. Strategy crafting must be combined with other necessary elements to generate positive change. It takes shared vision, a compelling story and organizational alignment. It also takes sound planning that results in both strategic and tactical actions. Organizations need to ensure they have the capacities, in terms of functional and individual capabilities, and the financial and sometimes political resources to drive action. And finally execution, the ability to taking action, lead well, and tend to the management structures required to drive action and correct course along the way. Good planning and organizational success depend on much more than integrated planning, but I do believe that organizations that can improve and optimize the degree to which their planning is integrated have better chances at success.

Last year, I co-authored an article with Steve Rothstein called Strategy’s Horizons and Boundaries. In the article, we advocated an extremely broad scope for strategy, encompassing the past, present, and future all operating on three levels – in day-to-day organizational activities and operations, in planning for the near-term future, and strategically. Strategy sits “above” the realm of planning to inform and guide the planning process, just as planning does for operations. Integrated planning, ensures the necessary alignments to organizational activity and to the broad scope of strategy. The organization is impacted by the changing environment and in turn acts on the environment, creating changes and impacts as energy flows across the organizational/environmental boundaries. Multiple horizons exist across time, both into the short-term and long-term pasts as well as into the present, short-term, and long-term futures. We can check ourselves in terms of integrated planning by continually asking the questions for planning, Are we doing things right?, and for strategy, Are we doing the right things?.

Organizational factors affecting planning integration. Integrated planning has limits and there are a number of organizational characteristics that affect the degree to which planning should be or can be integrated. Here are just a few that come to mind:

Size. Integrated planning appears to manifest itself differently in smaller, mid-sized, and very large organizations. To pinpoint a mechanism for this, size and scope of authority changes the location of where responsibility for planning is integrated and the manner in which it is distributed. In the very small organization, integration can reside in a single individual who coordinates planning through one-on-one relationships, overseeing processes, and ensuring aligned outcomes. As organizational complexity increases a single individual cannot manage this well and planning takes on a distributed quality. As organizational size increases further, integrated planning takes on another form and enters the realm of policy.

Specialized mission. This is a special case factor. There are certain organizations whose missions are so specialized that the mission itself serves to keep planning integrated. The mission drives integration through a highly focused commitment to purpose and values, sort of the invisible hand of planning.

Centralization/decentralization. Each organization occupies its own position on the spectrum of centralized versus decentralized decision making. Highly decentralized organizations are more challenged with integration and alignment than those that are more centralized. However, the insights achieved through decentralized engagement and participation are critical to mobilizing energies around aligned strategies. Factors such as multiple sites and segmented and distributed budgets also play a role in changing the communication patterns, resources flows, and distribution and development of talent.

Public versus private control. My experience suggests that private organizations have a leg up on public organizations in achieving integration and alignment. Put simply, the demands of state and local controls and accountabilities add layers of required connections and integrations for public organizations that most private organizations simply do not experience. This adds complexity but in most cases does not add solutions.

Wealth. Ironically, I have observed that some of most wealthy organizations lack integration due to excessive resources that enable the indulgent luxuries of redundancy, duplication, and sub–optimization of resource deployment. Such wealth enables a few organizations to avoid difficult issues that may challenge the status quo. It appears that the benefits of integrated planning may not matter as much to the very wealthy organizations than to those operating on slimmer margins or closer to poverty.

Profit/non–profit. Like mission, investor interests tend to help focus efforts and create greater integration and alignment. While losing an organization’s 501c3 status is not the golden road to integrated planning, being shareholder driven does sharpen sense of purpose and offers an easily measured outcome – profit. Even while seeking new net revenues to enable financial sustainability, seasoned organizational leaders know they must align these ventures with an organizational mission of service.

Age. I accept the idea of the organizational life cycle. Organizations are born, grow, decline, and die. Integrated planning has different roles and expressions during different stages of this cycle. During the birth and initial growth stage, planning is often captured in the minds of the early leaders and entrepreneurs. The passion and drive that exists to create the organization is a kind of glue that informally substitutes for integration. As the organization matures, additional structures are built and a danger arises of lack of integration and coordination. At this stage, leaders should be highly attuned to ensuring integration matures along with growth. At the later stages, routines and bureaucracies can impact integration, and without renewal, can lead to death.

Bureaucracy. Similar to centralization and control, bureaucracy can have a dramatic impact on planning and integration. Bureaucracy and integrated planning become interesting bedfellows. On one hand, the emergence of bureaucracy can help to drive planning integration as development of rules, laws, and regulations can reinforce integration over chaos. On the other hand, higher degrees of bureaucracy dramatically and negatively impacts integration as decision making slows down, conflicts emerge, and hierarchies limit communication and the effective reallocation of resources.

Diagnosing and developing capacities for integrated planning. The aim of assessment is to help organizations better understand how they work, why they are getting the results they are experiencing, and determine what can be done to strengthen their individual and collective capabilities to improve performance and outcomes. The results of integrated planning assessment, both of the key individuals that compose an organization and collectively across organizational groupings or holistically, give insight into how well an organization is prepared function well and drive outcomes. When gaps are identified between actual and expected levels of performance, opportunities for interventions and developmental efforts emerge. While it is beyond the scope of this article to dive into organizational intervention, the interdependent relationship among articulating, measuring, diagnosing, and developing interventions to strengthen integrated planning capacities is critical.

For example, if an organization is losing track of its strategic past or not continually anticipating potential future options, it can stagnate by doing the same things over and over. Eventually, it will disadvantage itself and not track changes in its market, with customer segments, or with competitors. This is an example of a gap in Awareness to Action. This organization should look closely at its functions of strategic thinking, analyzing, and planning and find ways to increase activities where it is lacking.

If an organization cannot get traction to create change, it may be lacking in the ability to take Collective Organizational Effort. In this case, a closer evaluation of how well it is able to influence broadly across boundaries or more deeply into the organization. It may not be communicating well with not enough frequency, accuracy, or transparency to create the necessary shared awareness. Or it may not be able to execute adequately to pursue priorities, alter and correct course, or make the decisions necessary to focus efforts.

Yet, even if an organization is able to move from awareness to collective effort, it may not be transforming and strengthening to the degree necessary. Organizations need ongoing innovation efforts and a fair degree of resource flows. Organizational assessment can uncover gaps in these activities and targeted interventions can close the gaps. Tying this all together is strong leadership that inspires vision, helps manage people and relationships, and continually generates results.

In conclusion. All three components of integrated planning need to function well and in balance to position the organization for success. This article sought to define integrated planning and make a case for assessing organizations’ capacities along 9 dimensions. More work needs done to give planners and leaders tools to better understand their organization’s results relative to strength of its planning competencies. To do this, it’s important to move integrated planning from something undefined to something measurable and eventually to define a construct that can help us predict organizational performance in an effort drive improvement.