The last few years have seen several waves of transformation for CxOs, and research shows the pace of change is only about accelerating. According to PwC’s latest survey for 2024, 40% of global CEOs don’t think their business models will be viable if their company continues on its current path. That’s why, as you prepare for strategic planning success in the next few quarters, it is crucial to remember six do’s and don’ts.
Strategic Planning Process in 2024: The Must-Do’s
First, look at some key business imperatives to factor into your strategic planning process.
1. DO Embrace flexibility and adaptability
The modern business landscape is constantly changing, and organizations must keep up. In the last three, we have witnessed a paradigmatic shift in our work due to the pandemic. This has led to unprecedented trends like The Great Resignation and Quiet Quitting.
Further, companies have faced severe supply chain constraints, first due to border closures in 2020-21 and then to geopolitical conflicts in several parts of the world. National regime changes and politics also contribute to transformation pressures, leading to varied regulatory jurisdictions and economic policies that businesses must contend with.
Therefore, embracing flexibility and adaptability is the need of the hour to match employee expectations, market conditions, and compliance requirements. To achieve this, CXOs need to undertake exhaustive process audits and find points of optimization that can help them stay agile.
2. DO Focus on digital transformation
Since the rise of cloud computing, organizations have gradually ramped up their investments in digital technology, as it no longer involves bulky on-premise systems with complex maintenance and uncertain long-term ROI. Cloud adoption gained further momentum during the pandemic and is a significant enabler of digital transformation.
It allows business leaders to nimbly implement next-gen software systems and upgrade their machine environments with IoT. The cloud unlocks rapid scale-up and scale-down opportunities, ideal for a fast-changing business landscape that necessitates an equally agile strategic planning process.
Coexisting with the cloud, tightly integrated application landscapes, big data and business intelligence pipelines, and a high level of digital literacy among the workforce is also necessary.
A recent KPMG survey shows that 70% of CEOs agree a quicker shift to digital investments is necessary in the next three years. To further prioritize digital transformation as part of the strategic planning process, organizations can also work with managed service providers that combine business and digital operationalization expertise.
3. DO Prioritize sustainability and social responsibility
The role of ESG (environmental, social, governance) has undergone a sea change in the last few years. What was once a compliance mandate in most regions has rapidly become a brand differentiator. Today, 66% of customers (and 75%) of millennial buyers consider sustainability to be a critical factor in brand loyalty. The market, too, rewards sustainability practices, with 45% of ESG announcements resulting in a significant stock price impact.
In 2024, CXOs have every reason to embed sustainability and social responsibility into their strategic planning process. This ranges from product/service alterations (e.g., going plastic-free in hospitality chains) to supply chain decisions (e.g., working only with ESG-certified suppliers) and workforce programs (e.g., offering volunteering opportunities as part of the benefits plan).
The good news is that 43% OF CFOs are prioritizing ESG as their no.1 long-term priority, according to EY research. Remember that the successful execution of sustainability initiatives will require cross-functional collaboration, investments in environment-friendly alternatives, and smarter reporting mechanisms that can help demonstrate your ESG footprint and garner more significant ROI.
Pitfalls in the Strategic Planning Process: What to Avoid
Let us now turn to the strategic planning “don’ts” you need to be aware of in 2024:
1. DON’T Ignore customer feedback and market research
Strategic planning success cannot be achieved in an ivory tower, and the role of customer feedback is paramount. For instance, Apple CEO Tim Cook starts his day by catching up on customer emails and feedback notes. Today, technologies like customer experience management (CXM) platforms make it possible to aggregate and analyze feedback from multiple sources, using AI to gather coherent and actionable insights.
Gathering and acting on feedback can be challenging, so many business leaders need to pay attention to this crucial part of the strategic planning process. That’s why leading brands like Starbucks have formalized feedback programs where the company incentivizes survey completion with reward points or a free product. It transforms feedback into training opportunities to close the feedback loop and tailors the CX accordingly.
In addition to feedback, building your strategic planning process on a foundation of market research and data intelligence is vital. Given the dynamic nature of today’s business landscape, this can help organizations with inaccurate forecasting.
2. DON’T Underestimate the importance of employee engagement
Highly engaged companies are productive and more likely to stay with your organization longer. They also save you money through lower absenteeism, reduced hiring and training costs, and even reduced healthcare expenses due to greater wellness and satisfaction among workers. For this reason, disengaged employees cost companies millions of dollars; in 2021 alone, employee disengagement cost the global economy $7.8 trillion in lost productivity.
CXOs must recognize the importance of employee engagement during the strategic planning process for 2024, and most business leaders are aware of this. According to a recent survey, 71% of CEOs recognize engagement and culture as a critical factor influencing financial performance, up from just 26% in 2021.
In the future, employee engagement data should drive the strategic planning process, which must rely on people analytics as much as business intelligence. Engagement data must also be analyzed from a diversity perspective to align with ESG goals.
3. DON’T Neglect risk management and contingency planning
Navigating a changing business landscape also involves dealing with a heightened level of risk at both micro and macro levels. In the next 12 months, CEOs believe that they are “extremely” or “highly” exposed to risks arising from inflation (40%), cyber threats (20%), and climate change (14%), among other factors, as per PwC.
While we embark on a roadmap towards innovation and agility, which entails a degree of risk appetite, paying attention to risk management and contingency planning is essential. Remember that 95% of CEOs recognize that their organizations will face severe threats and disruptions to their growth prospects in the next 2-3 years. To prepare, business leaders must invest in powerful predictive analytics, shore up their technology and cybersecurity systems, and grow their reputational risk management programs.
Risk may have multiple dimensions, impacting your culture, data operations, brand reputation, and extended business units. Therefore, a detailed and multi-layered contingency plan has to be part of the strategic planning process for 2024.
As we boldly enter the post-pandemic era of business operations, organizational leaders will face many unexpected challenges and opportunities. Companies focusing on the right strategic planning areas and adopting powerful digital enablers will gain a competitive edge. In a hyperconnected world, brands can extend their reach like never before, and a well-articulated strategic planning process is essential for success.