Business planning: the important things you didn’t know

This is the fourth in my series of blogs describing my approach to business planning including an innovative strategic and operational planning model the Business Lifesystem®. The model helps simplify and streamline the strategic planning process and business management system for complex organisations.

You can find my series of blogs on how to write a strategic plan that seriously improves your business performance here;

1. Strategic planning process: how to meet business challenges head on

2. The best of the business planning tools: The Business Lifesystem®

3. Your business management system: know your business drivers

4. Business planning: the important things you didn’t know

5. Your risk management process: is it the right one?

6. Strategic planning: how to ensure delivery of your planned strategy

Business planning and complex organisations

Effective business planning defines the business outcomes the organisation is planning to achieve expressed in a set of measurable objectives that define what you are trying to achieve, why you are trying to achieve them and how you intend to achieve them.

Business Objectives are an articulation of what the organisation is trying to accomplish. They are driven by the External Business Drivers and the Internal Value Drivers and in the Business Lifesystem® model are categorised into four Perspectives of a balanced scorecard:

1. Customer - who are the customers of the business now and in the future?

2. Proposition - what products and services are being offered by the business to those customers now and in the future?

3. Capability – what assets, deliverables, people, partners and processes are required to deliver the propositions?

4. Finance - how will the capabilities be funded (revenue and investment)?

Each of these Business Perspectives is further broken down to specific Business Objectives that demonstrate progress, development and delivery across the balanced scorecard.

Business Outcomes

Business Outcomes are a quantification of the business value, benefits and targets attributable to the Business Objectives that make them quantifiable, measurable, timely and specific. Business Outcomes might be in-year or longer term (3 to 5 years or more).

For example, a Business Objective might be to improve customer satisfaction; an associated Business Outcome might be an improvement in the annual customer satisfaction results of 10% per year for five years.

Key Business Outcomes are often referred to as Key Performance Indicators (KPIs) and can be used in an executive dashboard to monitor the progress of the business towards achieving its strategy.

Enablers

Enablers are the assets, processes, deliverables, capability and capacity in which the organisation invests in order to deliver the Business Outcomes. While Business Outcomes articulate and quantify the business value, Enablers articulate and quantify the business costs. Enablers can be tangible assets, documents, processes, estate, IT equipment and systems or milestones that mark the delivery of one or more Enablers.

This is an aspect of strategic planning which is often misunderstood or omitted completely. Without quantifying enablers to deliver the business outcomes, complex organisations often underestimate the costs, or over-estimate the benefits of a particular course of action.

Business Objectives are an expression of what the organisation is trying to accomplish. They are driven by the External Business Drivers and the Internal Value Drivers. In the Business Lifesystem® model business objectives are categorised into four Perspectives of a balanced scorecard: Customer, Proposition, Capability and Finance. Business Outcomes are the measurable indicators of progress towards a business achieving its strategy. Business outcomes are the quantification of business value and benefits. Enablers are the capabilities in which the organisation invests in order to deliver that value and those benefits.

Next steps

Our next blog addresses how the Business Lifesystem® applies the concepts of risk management and prospect management to the business planning cycle.

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