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Strategic Planning Sessions: Integrating IT, ERM, and HR

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Information Technology (IT), Enterprise Risk Management (ERM), and Human Resources (HR) are foundational areas of an organization yet they are often forgotten when conducting strategic planning sessions. When I meet with clients, one of the first items I call to their attention is to ensure these critical areas are represented during the planning sessions. Let’s study the reasons why individually:

Information Technology

Most organizations, regardless of industry, currently utilize some technology to run the business. Yet it is common for companies to see IT as an expense and necessity versus the investment that it truly is. When your organization has a strong technological foundation, you can run your business more efficiently and effectively. You can scale and thus grow your business exponentially. The key is that technology strategies must align with the business strategies. In other words, technology should support the business and not drive it. Businesses must maximize technology to accomplish their mission. They should use technology to create efficiencies wherever possible, automate processes, and produce the best product they can to meet their clients’ needs.

Technology investments are considered capital expenditures and they need to be planned with enough time because they can be a large outlay of cash. The cash outflow as well as the depreciation and/or amortization must be included in the financial projections of the company. A good question to start the conversation is: Does the current technology align with the business objectives of the company? If not, start aligning the technology strategies with each of the business objectives.

Enterprise Risk Management

Once again, if your organization is open for business, it most likely faces risk. ERM is the function in an organization that identifies and assesses ALL the potential risks that could affect an organization. The next step is to mitigate and possibly eliminate some of the risks identified. Lastly, the function of ERM monitors and reports on all the risks identified and assessed up to the Board of Directors. Directors have the responsibility and fiduciary liability to know and understands the top risks the company faces. The goal of ERM is to mitigate as many of the risks possible so the organization accomplishes its mission.

Good questions to ask during the strategic planning sessions are: 1) What are the new risks to our organization that come from these new strategic objectives? 2) When you conduct an ERM Risk Assessment ask, what are the strategies to mitigate our top ten risks?

Human Resources

Without the people, regardless of how automated your organization is, there is no business. We’re all going home! Planning to attract the right talent and retain your top talent starts with the right acquisition strategies. Unfortunately, like IT and ERM, the employees are seen as the major expense to an organization instead of viewing the staff as the biggest investment you can make—not only in people’s lives but in the life of the organization and ultimately in the lives of your customers.

In addition, the HR leader must be in constant communication with the other department leaders so they, together, can plan for the new talent acquisition with an understanding of the business needs. HR needs to be represented at the strategic planning sessions to ensure the people side is not forgotten. This includes new FTE’s, new type of talent needed for future developments, and additional talent needed to add depth of staff. As volume grows in certain areas of the organization, you may need additional staff in that area. Other times you may need to create brand-new positions that didn’t exist before. With new technology developments, there are new jobs that are being created that we never dreamed of because there was no need for those types of skills.

As you start your strategic planning process, I encourage you to involve these critical functions in the planning process. You cannot go wrong. Your strategic plan will be complete and stronger. You will have the buy-in from these key areas in the organization and the entire company will benefit from this approach.

Annual Strategic Sessions: Planning, Preparation, and Strategy Execution!

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Fall is typically the best time to hold your organization's annual strategic sessions and start planning and preparing for the next year. But, unfortunately, most leadership teams view the annual strategic sessions and strategic planning season as a waste of time and a boring activity. Instead, it should be viewed as a great opportunity to review the current year in comparison to your goals. It should also be a time to reflect on your vision, mission, your organization’s core values, and your unique value proposition. In this article, I am focusing on three important aspects of your annual strategic sessions: Planning, Preparation and Strategy Execution.

Planning: Leaders Plan

The planning phase is when you start the conversation, gather the leadership team, and ask questions such as:

  • Has anything changed in the past year that significantly impacts our core focus and the mission of this organization?
  • What has gone right? What has gone wrong?
  • Are we executing the strategies we agreed on to meet the strategic objectives for this year? If not, why?

The answers to these questions should be a great start to the conversation. As a best practice, the strategic plan should be a three-year rolling plan. This means you start with a three-year plan and you review it every twelve months to ensure you’re on track. At the end of the three years, you create a new three-year plan and so on.

The leadership team members who participate in the initial strategic planning sessions should come prepared to share about the strategies they were accountable to execute at the beginning of the plan year. Once you get past these initial questions, you can then move on to a deeper discussion regarding the top three to five strategic objectives you’re working on during the current three-year strategic plan.

Preparation: Leaders Prepare

One of Joe Gibbs’ famous quotes is “A winning effort begins with preparation.” Joe Gibbs is a retired American football coach, NASCAR Cup Series and NASCAR Xfinity Series team owner, and former NHRA team owner. He was the 20th and 26th head coach in the history of the Washington Redskins. (Wikipedia)

He is correct. Without preparation, you will not win whatever race or goal you (or your leadership team) set out to accomplish.

Part of the preparation includes practicing, correcting errors or activities that didn’t go as planned, and testing to ensure your plan works. The right team members must be involved as well to accomplish your goals. The organizations that involve the entire team have the best chance at succeeding because everyone is invested in the process and the organization’s vision becomes their vision.

Strategy Execution: Leaders Execute the Plan

One of the biggest frustrations for senior leaders of organizations is that the strategic plan sits on a shelf and is not a dynamic document. To avoid that frustration and to ensure the strategic plan is in fact implemented, you must have a documented and established process that involves the entire team. The process is crucial to a successful strategy execution. So what is the process?

Start by establishing “strategic plan committees” where employees from the various areas of the organization participate. Each committee takes ownership of one of the top strategic objectives. They are accountable to execute the strategies, tasks, and tactics to accomplish that one strategic objective. Encourage employees to volunteer to lead those committees and establish a reporting process so all the committees/teams report up to executive leadership and even up to the Board of Directors. Committees (or “groups” if you don’t want to call them committees) should meet quarterly to assess progress.

Having a process is crucial but there are other key components that must work together for the process to work:

  1. Outstanding communication: From the top down and from the bottom up, clear and honest ongoing communication using all the mediums available is a must.
  2. Team building approach: Everyone needs to embrace the organization’s vision and feel like they belong and are valued members of the team.
  3. Trust: Without trust, none of these processes or strategies will work. Trust starts at the top and it should be preserved at all costs.

I hope the concepts discussed here will be of help to you in your organization as you start planning and preparing for the new year so you can successfully execute the strategic objectives you set out to accomplish! Remember, leaders plan, prepare, and execute their plans. Enjoy your annual strategic sessions!