Insights / All Leadership / Article

9 Steps to Successful Functional Strategic Planning

November 30, 2020

Contributor: Jackie Wiles

Executives should take these steps to ensure their functional strategic planning process is productive and tied to business goals.

Roughly 40% of executive leaders say their enterprise accountability and leadership are not aligned on strategy execution, according to the 2020 Gartner Execution Gap Survey. Why does this misalignment occur? After all, the objective sounds simple enough: Define the organization’s strategy and make resource-allocation decisions to pursue it. 

Download eBook: 3 Strategic Actions for Success in Your Executive Role

The problem — paradoxically — is that many organizations lack a coherent plan for their strategic planning that properly translates lofty enterprise goals into functional initiatives and objectives.

The strategic planning process, especially during volatile times, should eliminate everything that isn't necessary and sufficient to communicate an effective strategy. But the focus for functional leaders is still to identify initiatives that will drive enterprise growth ambitions — and determine how to unlock the capacity (time, budget, talent and technology) needed to execute those initiatives.

A methodical step-by-step approach for functional leaders

These nine steps provide a guide by which functional leaders can ensure a rigorous approach to strategic planning in a way that effectively prioritizes the successful execution of critical initiatives, whether functional strategic planning takes place on a calendar basis or is more of an adaptive strategy, involving an ongoing reassessment of priorities.

Step 1: Be strategic minded

Before you even start your functional planning process, commit to keeping a strategic mindset and not allowing yourself to be hijacked by short-termism, tactical execution plans and other “check the box” activities. This includes your mindset on cost management and budgeting.

Download now: Strategic Planning Guide for Your Function

All too often, concerns about meeting short-term targets, fear of failure and a preoccupation with operational issues overwhelm aspiration.

Commit to a strategic approach to cost management and budgeting, wherever and whenever you decide which initiatives to pursue and fund. 

View your function’s cost architecture through the lens of business value and view cost optimization as a continuous discipline focused on directing resources (time, capabilities and budget) to strategic innovation and growth initiatives. Be clear on the best budgeting approach(es) for your function’s needs, considering what type of purpose-driven budgeting best supports your strategy execution.

Step 2: Outline expectations 

At the outset, clearly define the enterprise and business context for all stakeholders to prevent managers and executives from misunderstanding one another and derailing the process. Outline the responsibilities, process timelines and expected outcomes for each participant, especially in cases where the planning and budgeting processes cross functions. Identify who among the stakeholders will ultimately sign off on your strategy/budget plans.

Step 3: Verify the business context 

Interview business leaders and have them describe the current and desired future state of the business, lay out the goals and capabilities required to support and enable those business aspirations, and specify suitable metrics to gauge progress against those goals. 

Be clear what impact business priorities and challenges will have on your function’s imperatives, opportunities and risks, and therefore what you need to emphasize, deemphasize or stop doing.

Step 4: Assess capabilities 

Evaluate the maturity and importance of key functional capabilities required to support the overall business goals. There shouldn’t be a big difference between the function’s self-assessment and business partners’ perceptions of its strengths and weaknesses. Generate a prioritized list of functional capabilities to bolster or gaps to fill to support business goals.

Step 5: Set objectives

Develop a prioritized list of objectives with discrete and measurable steps that describe how a specific goal will be accomplished. Each strategic business goal can be supported by a few objectives with a time horizon of one to two years. 

Objectives should be specific, measurable, actionable, relevant and tied to a near-term deadline to ensure timely completion. Develop an action plan that stipulates how the objectives will be met, including specific measures to track progress, and metrics that are robust but simple enough to quantify that progress effectively.

Step 6: Look to fund innovation and growth

Strategic growth objectives should be ambitious by definition, but they still have to be funded — with budget, talent and technology. The challenge is how to allocate scarce resources to the most critical initiatives and growth investments. 

Start with a rigorous view of your baseline budget — the resources required to conduct all ongoing functional activities. Then develop a sound plan, anchored in strategic objectives, of the trade-offs your function can make to keep resources moving toward key initiatives.

Be sure to deprioritize funding for less strategically relevant initiatives, and look to better leverage underutilized resources. And, make sure you have a clear understanding of the relative cost, risk, time and benefits of potential cost optimization initiatives.

Step 7: Put your strategy on a page

Capture the elements of your strategic plan on a single page. Gartner suggests creating a template outlining where the functional organization is, where it is going and how it will get there. 

Communicate how you are adding value today and demonstrate how you plan to impact future business across the coming year. Include a statement of strategy, a before-and-after description of the state of the function, one or two critical assumptions underpinning the strategy, and five to seven initiatives required to meet the functional objectives established to support business goals.

Step 8: Drive the plan home

Do this by articulating the objectives and strategy across the function and company. The one-page strategy template is a helpful tool, as it makes the plan easy for employees to consume, but you’ll still need a deliberate process for communicating the plan — and ensuring that key constituencies understand and agree with it. 

You need a clear and consistent message that drives buy-in and commitment from your functional leadership team, engagement and motivation among the workforce to implement the plan, and understanding across the enterprise of how your priorities are changing, and why.

Step 9: Prepare to respond to change

Once the strategic plan is adopted and shared, it’s critical to measure progress against the objectives, revisit and monitor the plan to ensure it remains valid, and adapt the strategy as business conditions change:

  • Monitor triggers to track the effectiveness of the strategic plan 
  • Cancel underperforming projects quickly 
  • Track and validate assumptions periodically 

Lastly, make sure you have an agreed-upon action plan for the specific steps to take or decisions to make when monitoring triggers an alarm to increase the chances of success.

This article has been updated from the July 2019 original to reflect new events, conditions and research. 

Experience Gartner Conferences

Join your peers for the unveiling of the latest insights at Gartner conferences.