This article will focus on improving processes and tasks, and ensuring that the strategy is parallel with analysis, planning, and reporting
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Processes should continuously be challenged for organizations to improve and impact decision-making. This article will concentrate on improving these tasks and processes and ensuring that the strategy is aligned with the reporting, planning, and analysis. Closing the loop refers to tying these processes together.
Planning, which covers budgeting and forecasting, communicates the values used to evaluate growth as well as how capital, both people and money, will be spread across the organization. The development of the budget and forecast will be more powerful when it is connected to the corporate strategy. Connecting the strategy and planning allows employees to better under the strategic objectives and targets, which will ensure that their choices take the corporate strategy into account. The communication of the strategy must be constant, steady and ongoing. The comprehension of the strategy leads to better performance across the company, as the employees will allot resources to match and surpass the goals and objectives of the company.
Harvard Business Review research shows that, on average, 95% of an organization’s employees are unaware of, or do not understand, its strategy, and 85% of executive teams spend less than an hour per month discussing strategy. These metrics should scare all executives into working to improve these numbers internally. If the employees are closest to customers, vendors, and partners and in charge of everyday decisions, then how can they be effective if the majority of them do not know the strategy? Also, how can any improvements be made in the strategy if executives are spending less than 5% of their time developing and improving the strategy? It is just not effective, and it will affect revenue and profitability without changes.
Setting strategy is not only integral; it is a mandatory criteria of any successful organization. But the steps to implement the strategy and track the success of the strategy are just as significant. The first step is communication, and below are simple steps to improve it across the organization:
The strategy and the plan must be completed before setting a budget or forecast and prior to analyzing the financials.
To read more about creating a closed-loop analysis, planning, and reporting process and ensuring that the right steps are being taken and the strategy is finalized, click here.Set featured image