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:
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?
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.