The Second Critical Step to an Effective Planning Process: Current-state Analysis & Review

Posted by on December 4, 2009

How can you get there if you don’t know where you are? Obviously it makes sense that you need to know your point of origin to determine the optimal route to your desired destination. If that is the case in our day-to-day lives, then why do so many forget to apply that simple concept in business – and in this case – in our business planning? This article focuses on a second major step to consider in your planning process – a review and analysis of your organization’s current-state.

What needs to be reviewed within the organization and how does doing so influence the planning outcome?

The “Current-state review” or Plan Analysis phase of planning involves gaining a “business truth” of where the organization is today so that it is possible to plan effectively for moving from the current reality to the desired results. This integrated set of foundational activities is designed to accomplish the following:

Tack down where the organization is today;
Assess operations and the decision process within the enterprise ecosystem;
Consider all functional areas that are involved in developing and delivering value to the marketplace;
and identify potential paths to achieving the desired end outcomes.

To accomplish Plan Analysis, it is critical to understand the business ecosystem and eco-cycle. Let’s define the ecosystem and the eco-cycle first.

The term “business ecosystem” was first coined in 1993 by Harvard business professor James Moore. Moore described business as a “community supported by a foundation of interacting organizations and individuals. This community produces goods and services of value to customers, who are themselves members of the ecosystem”. The ecosystem includes “suppliers, producers, competitors, and stakeholders”.

The “eco-cycle” refers to the ebbs and flows within the ecosystem from a fiscal economic activity perspective over the organization’s planning period. This could include the subsequent four quarters (12-months) or up to 18-months. It is the fluctuations in the business ecosystem that are measured using historical growth targets and analysis of the businesses stagnation and / or periods of decline.

To accomplish an understanding both the business ecosystem and eco-cycle in the most effective manner, an internal assessment of the organization must review organizational assets, organizational hierarchies, resources, people, culture, systems, partnerships, suppliers, business process, financial model and numerous other factors. Likewise, an external assessment looks at the marketplace for the organization, competitors, social aspects, the regulatory environment, technology and economic cycles. With the Method Frameworks Plan4 process, cultural and organizational diagnostics are performed at this stage to help us apply the best-fit framework from Plan4 that is most suited to the organization.

So why is all of this so important to do?

The Plan Analysis helps put everything about the organization into a singular context – with a holistic-360 degree, multi-dimensional view that allows for comparability and planning to occur effectively. Traditional planning practices usually follow a standard SWOT analysis format and provide indications of Strengths, Weakness, Opportunities and Threats. Plan Analysis as Plan4 prescribes provides far more relevant attribution of the organization and the environment in which it must operate (the business ecosystem and eco-cycle) – inclusive of critical aspects, such as: relationships with customers, partners, employees, suppliers and reflective of the economic fluctuations that occur within that system. The Internal Assessment yields a more complete picture of the organization’s strengths and weaknesses, and the same is true for the external assessment. Far more is understood and uncovered relative to opportunities and threats using this approach than when using traditional planning’s SWOT analysis.

The organizational profile resulting from Plan4’s Plan Analysis step encapsulates key data that will feed the planning process with richer data - broken down into three major components: 1) Operating environment & business processes; 2) Business relationships and 3) Key performance categories. The comparison of the organizational profile to the challenges identified during this step result in the gap that serves as the basis for planning.

Does this leave you curious about the other steps in an effective planning process? Plan4 is our proprietary business planning process that involves an integrated set of actions designed to help companies gain sustainable advantage. The entire team at Method Frameworks is passionate about planning and getting results for our clients. We’ve told you about the planning process that we’ve created, called Plan4 and how that has put us on the playing field with the most successful planning consultants in the nation. The fact that we’ve put our planning process to work for some of the largest companies and have consistently delivered ROIs of 140% or more means that we have knowledge that we can share with our readers to help organizations get on the right track with their planning. You can learn more about Plan4 by downloading our Plan4 Planning Process Overview or contact us to request a meeting with a planning consultant.