Management SummaryStern Stewart Research // Volume 58
The evolution of corporate planning has been characterized over the last decade by more attention to detail, new planning tools and extended planning horizons. The increased complexity that this brings with it, however, today impedes companies‘ ability to act and quickly react in a volatile market environment. A survey conducted among managers and decision-makers of the 100 companies with the biggest sales volumes in the D-A-CH countries confirms this dilemma. They all consider planning to be a key instrument of management, but 92% of the survey respondents consider theirs to be so „bulky“ in its current form, and its results so inconclusive, that it now seems to need reworking and further development.
So how can companies structure their planning process to be more effective and yet at the same time less cumbersome? In other words: how can planning once again become a powerful management tool for dealing with economic reality?
Based on the relevant interfaces and reciprocal effects with the control system, we consider four main strategic focuses to be of importance here, each of which has to be embedded in an improved planning architecture, in a form tailored to each company‘s individual characteristics:
1. Target-based planning: Consistent objectives across all hierarchical levels promote continuity and reduce costs 2. Measures-based planning: As a binding process element, individual measures enhance commitment and consistency 3. Continuous planning: The rolling forecast ensures a view that goes beyond the rigid business-year logic 4. Scenario-based planning: Scenarios account for uncertainties and enable more rapid reaction to change
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