Frameworks and Tools - Deploying Strategy With Integrated Business Planning

In case you missed it – read the other papers in the series:

White Paper #1: Connecting Strategy to Execution – Deploying Strategy With IBP
White Paper #2: The Portfolio Review – Deploying Strategy With IBP
White Paper #3: The Demand Review – Deploying Strategy With IBP
White Paper #4: The Supply Review – Deploying Strategy With IBP
White Paper #5: The Integrated Reconciliation Review – Deploying Strategy With IBP
White Paper #6: The Management Business Review – Deploying Strategy With IBP

Introduction

This white paper is the seventh and final in the series “Deploying Strategy with Integrated Business Planning.” It brings together the key points from the previous six white papers. It introduces Ollie Accelerator, Oliver Wight’s cloud-based Integrated Business Planning (IBP) technology platform, to show how you can expedite your IBP journey and operationalize strategy using insight-driven technology.

Overall, the series explores how IBP can help businesses connect strategy to execution and the role each stage of the IBP process plays in operationalizing business unit and functional strategies and plans to deliver company objectives. When operationalizing strategy, the executive owner of each IBP stage (beginning with portfolio, demand and supply) is responsible for ensuring it effectively deploys the operational plan and delivers the company strategy through well-defined projects and initiatives.

The Portfolio Review considers the market and decides which products and projects to introduce or retire to shape the product portfolio. Its job is to ensure there is sufficient volume, revenue and margin within each business case to maintain or enhance the organization’s market position.

The Demand Review analyzes customer behaviors and develops an unconstrained demand plan to deliver the volume of products the customer needs, when and where they need them, within the operational constraints of costs and service levels.

The Supply Review evaluates the portfolio and demand plans to determine what it will take from a manufacturing, labor, input material, distribution, logistics, and inventory perspective to “say yes” to the plan.

The Integrated Reconciliation Review (IRR) is where the portfolio, demand, and supply teams come together with the financial team to ensure the functional plans (volumetric and financial) collectively achieve budgetary and strategic objectives. At this stage of the IBP process, any changes needed to ensure plans remain aligned are reviewed, and decisions that need to be escalated to management are identified. These are forwarded to the next stage of the process.

The Management Business Review is the final stage in the monthly IBP process. It is where important business decisions are brought to management to ensure all the functional and financial plans remain aligned with the business strategy to drive improved performance.

While on the surface, changes at each stage seem subtle, the cumulative effect is transformative because, rather than just checking to strategy, each step is responsible for implementing strategy.

Bridging strategy, planning, and execution

According to a study by The Economist, 61% of respondents acknowledge that their firms often struggle to bridge the gap between strategy formulation and its day-to-day implementation. It’s true that while many organizations invest heavily in strategy development, most of them fail to deploy it. In our experience, this is typically due to an ineffective Integrated Business Planning capability whose role should be consistently driving execution to transform strategic aspirations into measurable outcomes.

Many companies utilize their budgeting process to increase next year’s plan to operationalize strategy. However, Oliver Wight’s position is that any credible plan to deliver the strategy requires time-phasing and planning assumptions that align with strategic intent (represented in volume, value, investments, and resources) over the full strategic horizon (see Figure 1).

Operationalizing strategy with Ollie Accelerator

As the innovator of Integrated Business Planning and with more than 55 years of experience helping businesses across the globe transform their planning processes, Oliver Wight has now developed an insight-driven technology solution to support the IBP process. Ollie Accelerator provides the essential big-picture visibility executives, and other key high-level stakeholders need to operationalize strategy on a functional and day-to-day level. It helps leaders improve communication across disparate business units, achieve alignment between financial, operational, and strategic goals, and accelerate their organization’s progress toward results.

Ollie Accelerator enables the implementation of IBP best practices quickly and more efficiently. It generates actionable insights forming the backbone of viable strategies, with clearly identifiable goals to produce tangible long-term results.

Case Study: Aligning corporate and business unit strategies

Background Jack is the president of a manufacturing company, an actual but anonymous client of Oliver Wight. Jack observed recurring strategic failures in the business owing to disconnected planning, investment, and chasing last year’s budget through management-by-objective rather than strategy execution. When Jack assessed why strategies failed to achieve expectations, he found three flaws in the company’s past approach:

1. The corporate strategy and business unit strategies diverged over time.

2. Relying on financial goals and annually delegated functional objectives meant there was no formal way to monitor the execution of strategy at the business unit level and within the functions of each business unit.

3. There was no formal way to create a credible plan over the strategic planning horizon.

Implementation Unwilling to continue poor historical performance, Jack adopted the Oliver Wight IBP model and introduced what he called Integrated Strategy Management (ISM) to align corporate and business unit strategies. This process ensured functional strategies translated into actionable goals, enabling consistent performance measurement.

Proactively, Jack and his team implemented a new approach to creating and deploying the strategies to profitably grow the business, instituting the following changes to operationalize strategy:

1. A robust strategic plan, not just an aspirational plan, with targets and a way to get there.
2. Market segmentation to target profitable growth and make investments proportionally.
3. Portfolio roles for each portfolio of products and services.
4. Portfolio growth targets for revenue and margin to ensure leaders understand their opportunity and are accountable for their targets.
5. Ensured sufficiency and health of all business funnels required to achieve the growth game plan.
6. Requiring portfolio/marketing teams to develop a time-phased plan (marketing 4Ps, capital, productivity, strategy master plan projects) to deliver their portfolio targets.
7. A make-the-number mindset to hold key individuals accountable for their plans.
8. Strategy integrated with the IBP process to manage the gaps, make necessary decisions, and deliver the strategy targets.

As a result, each business unit had greater clarity around its role in developing a growth game plan that aligned with corporate strategies and goals.

Read the full story in part one of this white paper series, “Connecting Strategy to Execution.”

Figure 2: Alignment of corporate and business unit strategies

Frameworks and tools for strategy development and deployment

Strategic planning

Defined as a roadmap for achieving a desired future state, a strategic plan must consolidate perspectives on financials, customer insights, processes, people, and culture. Each stage of the IBP process uses management-by-exception to review key strategic initiatives that aren’t on track to achieve their goals and take actions to correct them.

One of the most underappreciated capabilities necessary for effectively executing business strategy is the management of business funnels – specifically, the growth strategy, capital allocation, productivity, and innovation. This involves the selection, funding, and execution of prioritized initiatives that align with and support the company’s formalized strategy.

For many companies, funnel and project management is resourced through existing roles within functional priorities or organizational silos. Furthermore, with the pressures of achieving annual performance objectives (and incentives), strategic objectives become secondary. Consequently, investments do not align with the most important priorities for long-term growth and performance. This is why most organizations have not right-sized their business to deploy projects effectively.

An organization’s strategy should strongly consider and provide the resources required to do one of the most important jobs required to deliver consistently sustained growth objectives – deploying the strategy projects. Developing the strategy is necessary to provide direction, but leaders in the business must provide the organizational capability to execute it. Many companies live primarily from the “sales opportunity” funnel as the source to close gaps in their business. If they want more tools in the arsenal, they should work to drive sufficiency, health and execution of “business” funnels instead.

Do you have a good funnel development and project management capability to deploy the strategy and utilize all business levers to manage your business?

Figure 3: Business funnel

1. Introduction to Integrated Business Planning

IBP is a monthly decision-making process aligning strategy, portfolio, demand, supply, and financials over a rolling 24+ month horizon. It provides a structured approach to operationalize strategy while enhancing accountability. The emerging best practice is to extend the planning horizon to cover your strategy horizon, typically three to five years.

IBP connects corporate and business unit strategies with tactical execution through a structured process that integrates financial, operational, and strategic planning. This alignment ensures that every level of the organization works collaboratively towards common objectives. IBP is not just a planning tool but a comprehensive approach to managing a business effectively in dynamic markets.

Figure 4: The Integrated Business Model

2. The Portfolio Review

The Portfolio Review is the foundation of IBP, linking the organization’s product and service offerings with its strategic ambitions. It ensures that portfolio decisions are informed by market opportunities, resource availability, and financial goals.

To effectively deploy strategy, tactics, and plans, within its Portfolio Review, every company needs a robust funnel/project prioritization capability. When operationalizing strategy, leaders must ensure that prioritized projects align and support their assigned role within the portfolio and their overall effect on the profit and loss; in many instances this requires the creation of a “portfolio master plan” comprising the following funnels/project types:

Strategy master plan: strategic initiatives that alter the company’s structure to improve competitiveness.
Marketing master plan: promotional, pricing, product, and placement programs that are aligned to the portfolio role and maintain or enhance the position of the organization within the market.
Capital master plan: a list of “projects” intended to maintain existing assets and grow the business.
Productivity master plan: a list of “projects” intended to lower cost and either offset inflation and/or provide rocket fuel to grow the business.

A valid plan exists when all the funnels/project types have verifiable assumptions, confirmed resource levels supported by business cases, time-phased launch plans, and acceptable returns. A sufficient plan is created when the funnels/projects (including assumptions of attrition or foreseeable change) have been prioritized to meet the business’s strategic goals.

How to select winning initiatives

Superior portfolio leaders know that business cases and plans do not always materialize. They conduct rigorous post-mortems to root out bias in business cases and launch plans. The ex-post learnings are fed back into the portfolio management process to improve the validity of future business cases and launch plans. This is often paired with a Shark Tank type of panel that approves projects after challenging business cases and assumptions, ensuring strategic alignment, to further enhance the likelihood that only high-quality projects receive resources.

These are the questions we are trying to answer through the Portfolio Review (PR):

Are the assumptions and building blocks behind the forward-looking PR plans valid and credible?
Are business cases evaluated effectively (assumptions/hurdle rates)?
Have the right projects been identified?
Is our Portfolio health/mix aligned to the Growth and Innovation aspect of the strategy?
Will the resulting financials achieve the business growth ambitions? If not:

– Are the PR performance measures improving?
– Has bias in the PR performance measures been eliminated?
– What are the planned corrective actions that will enable improved future performance versus past performance (sometimes referred to as the path to green)?

Figure 5 below shows how Ollie Accelerator provides an integrated view of all business funnel projects with common prioritization criteria, financialized and ready for cut-line conversations once a check for resource availability has been completed.

Figure 5: The Portfolio Review storyboard in Ollie Accelerator

3. The Demand Review

The Demand Review is the second step in the Integrated Business Planning process, following the Portfolio Review. It focuses on understanding and influencing customer demand to meet strategic goals.

The Demand Review is where the commercial management team (sales, marketing, and product management) reaches a consensus on the time-phased actions that will be taken to influence and generate demand. Importantly, it is a to-do list rather than just a set of numbers.

The Demand Review also serves as a forum for deciding which commercial actions are the right actions to take and invest in to achieve the company’s goals (revenue, margin, profit, market share, etc.) and strategies, such as growing in a particular channel or segment. The right actions may well change over time and must be evaluated and adjusted in response to changes in the internal and external business environments.

How does the Demand Review operationalize the company strategy?

The portfolio strategy and time-phased plan are executed by the sales team once the portfolio plan of projects has been deployed. The marketing and sales team’s responsibility is to execute the portfolio plan and realize value in the marketplace in line with achieving the company targets. Ollie Accelerator provides an integrated IBP dashboard with strategy, allowing the Demand Review leader to monitor the progress of the strategy and budget in a digital storyboard that provides a standard way for everyone to tell their story of the business (see Figure 6).

This process emphasizes the importance of:

The make-the-number mindset to achieve the revenue, margin, and volume/mix budget.
Understanding and appropriating the challenge of the portfolio plan assumptions for execution to customers in the field.
Time-phased account plans to execute the portfolio plan.
Making decisions to close financial gaps to targets.
Managing the risk and opportunity funnel to mitigate risks and seize opportunities.
Accurate forecasting – developing unbiased, reality-based demand plans.
Engaging sales, marketing, and product teams through cross-functional collaboration.
Scenario planning to anticipate changes in customer behavior and adjust plans accordingly.

Figure 6: The Demand Review storyboard in Ollie Accelerator

4. The Supply Review

The Supply Review aligns supply chain capabilities with business objectives, emphasizing cost efficiency, inventories and customer satisfaction.

The Supply Review is the third step in the monthly Integrated Business Planning process. It is where the supply chain articulates its response in a forward-looking, time-phased plan within the context of well-defined tactics and strategies. The Supply Review seeks to provide insight on performance to budget, both past and (most importantly) projected modeling the impact of tactics within manufacturing, sourcing, distribution, and logistics, including the documentation of assumptions, opportunities, and vulnerabilities around the forward plans, as well as the risks from commodities and FX.

Strategy doesn’t just happen; operationalization requires turning the strategy into very specific actions and defining where to start to accomplish the goals. It is all too common in organizations for there to be no clearly defined supply chain strategy. The supply chain strategy is linked to the corporate strategy via the strategies for the individual business units that it is designed to support.

At Oliver Wight, we believe the definition of supply chain encompasses all elements of delivering the product or service to the customer and should be as follows:

1. Sourcing (materials and components)
2. Manufacturing (in-house and outsourced)
3. Distribution (finished product)
4. Logistics (inbound, outbound, reverse)
5. Customer

There are several levers available to supply that need to be aligned with the business unit and corporate strategies. Decisions must be made around the portfolio about where to meet the customer – with inventory, capacity, or a combination of the two – and this will be determined by the type of manufacturing to be undertaken: make-to-stock, assemble-to-order, purchase-to-order, engineer-to-order, or design-to-order. Service expectations will be different for each, and each has its own trade-offs.

The digital Supply Review dashboard in Ollie Accelerator (Figure 7) provides the supply team with the necessary information to tell the story of the supply plan in a consistent and comprehensive manner.

Figure 7: The Supply Review storyboard in Ollie Accelerator

Key elements of the Supply Review include:

Executing the supply chain strategy – achieving supply-related strategic initiatives.
The make-the-number mindset – COGS delivery, absorption management and other cost levers.
Valid supply plans – basis of capacity, removal of supply plan bias.
Strategic trade-offs – balancing cost, flexibility, inventory and service levels.
Risk management – addressing vulnerabilities in sourcing, manufacturing, and logistics.
Capacity planning – ensuring supply readiness for anticipated demand.
Inventory planning – balancing inventories with service level expectations and affordability.
Capital planning – managing/deploying capital projects assigned to supply.
Productivity planning – managing/deploying productivity projects assigned to supply.
Strategic initiatives – managing/deploying strategic initiative projects assigned to supply.
KPIs – management of critical KPIs for supply, i.e., fill rate, production to plan, COGS, waste/scrap, safety, quality, etc.

5. The Integrated Reconciliation Review

The Integrated Reconciliation Review (IRR) consolidates inputs from the Portfolio, Demand, and Supply Reviews, resolving discrepancies and aligning operational plans with strategic goals. In the IRR, the unresolved issues from the previous three steps are filtered and, where they cannot be addressed, prepared for escalation to the MBR.

The IRR is also where the comprehensive operational plan is financialized and compared to appropriate commitments, e.g. annual operating plans or strategic plans, to identify gaps. Identified gaps and recommended actions to close them are also escalated for decision by the executives in the MBR.

The Integrated Reconciliation Review is also a natural point during the IBP cycle to test the alignment of the IBP plan with the strategy. It is an opportunity to review the delivery of strategic milestones and verify that once the milestones are hit, they have the desired effect and move the organization closer to its long-term goals. While the business strategy should be durable (i.e., not changed every month or quarter), it should be consistently tested against information from different business areas to ensure validity and be revised as needed.

Questions leadership should ask in the IRR:

Is the product portfolio evolving in line with strategy targets and growth arenas?
Are the strategy, capital, productivity and growth projects delivering the anticipated results on time?
Are gaps in the financial plan addressed with gap-closing recommendations?
Are demand resources focused on the markets, regions, channels, and customers identified as strategically important?
Are capital investments aligned with strategic choices and developing capacity to support future product and geographic aspirations?
Is an external perspective being brought into the MBR to test strategic assumptions – market trends, regulatory changes, competitive actions?

In every review in the IBP cycle, plans should be tested against and aligned with the overall business strategy. Everyone in the business should have a line of sight between their role and the strategy, at least at their functional level. A well-defined and clearly communicated strategy alleviates leadership from having to get involved in every decision. The IRR provides a last chance to ensure the alignment between execution and strategy has been considered in each conversation before reaching the Management Business Review (MBR).

Ollie Accelerator’s IRR storyboard (see Figure 8) provides executive summaries for all previous IBP steps, decision dockets, and financial and strategic plan performance to targets.

Figure 8: The Integrated Reconciliation Review storyboard in Ollie Accelerator

Key elements of the IRR:

Financial Appraisal – reviews key assumptions that drive revenue, margin, cost, etc. to develop the latest financial views for the product/loss and balance sheet.
Strategic validation – ensuring all plans support long-term corporate objectives.
Gap identification – highlighting variances between plans and strategic objectives.
Cross-functional resolution – facilitating collaboration to address unresolved issues.
Scenario Planning – evaluating upside and downside scenarios with key actions to mitigate risks and seize opportunities.
Setting the MBR Agenda – establish the monthly agenda for the MBR based on the priorities in the business.

6. The Management Business Review

The Management Business Review (MBR) is the final stage in the IBP process and is the point in the monthly IBP cycle where the leadership team comes together to approve the plans from the preceding review steps and chart the business’s future trajectory. It identifies gaps that must be resolved and determines actions to ensure the business remains on target to achieve its strategies and goals.

Figure 9: The Management Business Review storyboard in Ollie Accelerator

Key elements of the MBR include:

1. Empowering leaders to make crucial decisions about resources, investments, and priorities.
2. Approving consolidated plans from prior reviews.
3. Identifying and resolving critical gaps.
4. Setting the direction for future business priorities. The MBR ensures that all strategic and operational decisions align with corporate objectives, fostering accountability and agility.
5. Ensuring a unified and integrated plan where:

Priorities are clear, and plans are resourced realistically. The plans do not include words like “hope it works.”
Strategy is executed through a regular disciplined process, with regular checks – to ensure that plans are on track to meet the strategic objectives.
Issues facing the business are solved proactively vs being reactive.
Leadership is in alignment and agreement.
An updated rolling 24-month plan is approved.
The direction for the future of the business and its priorities are set.

Integration of strategy, planning, and decisions

IBP storyboards incorporate digital dashboards generated in Ollie Accelerator for the latest performance visualization, aiding in identifying and addressing gaps.

Many companies unknowingly disconnect strategy from integrated planning and decision-making. The funnels are disconnected, there is no plan to deliver the strategy, and to make sure assumptions are valid. Capital, productivity, new products, and strategic projects tend to be managed separately without understanding which projects impact the strategy goals the most. Fully operationalizing and integrating strategy with Ollie Accelerator’s digital dashboards, fed by best practice processes and behaviors, ensures all investments are properly evaluated and priorities aligned, with limited resources to create valid plans.

Summary

Benefits of strategy integration with IBP

Dependability and credibility Integrated strategy ensures consistent delivery of financial goals, fostering stakeholder trust.
A credible plan to deliver your strategy targets Requiring time-phased assumption-based planning allows the leadership team a way to challenge the assumptions, ensure they are reasonable, and size the business to deliver the strategy.
Business unit growth game plans Each business unit aligns its growth strategy with corporate objectives, defining roles across core functions such as marketing, sales, and supply chain.
Functional strategy development Functional strategies focus on sharp investment choices and market-driven growth plans, avoiding the inefficiencies of uniform resource allocation.
Decision-making efficiency Executives gain a clear view of gaps between projections and goals, facilitating timely adjustments.
Cultural transformation Employees develop strategic planning skills, fostering a culture of continuous improvement and alignment.

Challenges in operationalizing strategy

Barriers to success

Organizations often fail due to:

1. Unclear vision.
2. Misaligned management incentives.
3. Disjointed planning processes.
4. Insufficient strategy monitoring.
5. Disconnected strategy from planning.
6. Ineffective funnel and project management.
7. Lack of clarity over actionable targets to align accountability at the right levels.

Solutions

IBP supported by Ollie Accelerator addresses these issues by:

Promoting alignment across all organizational levels.
Providing a structured framework for continuous review and adaptation.
Operationalizing strategy with planning to ensure there are valid plans to deliver the strategic goals and targets.
Providing fully integrated digital storyboards, providing an effective means to manage gaps to target by exception and consistently telling the story of your business.

Monitoring and adjusting strategy execution

Regular reviews

The IBP process involves monthly reviews to:

Monitor performance.
Adjust strategies based on real-time insights.
Take actions to ensure execution of the strategy projects are delivered on time

Gap analysis

Organizations adapt swiftly to changing market conditions, ensuring strategic goals remain achievable through gap identification and resolution.

Key takeaways

1. Integrated planning enhances performance: Companies with mature IBP processes consistently outperform peers by aligning strategy with execution.
2. Cultural impact: Embedding strategy into daily operations cultivates a proactive, goal-oriented workforce.
3. Continuous improvement: Regular strategy reviews ensure relevance and adaptability in dynamic markets.

The principles outlined in this white paper illustrate how businesses can transform strategic aspirations into operational realities. By leveraging the IBP framework and Ollie Accelerator, organizations can achieve sustainable growth, stakeholder trust, and a culture of excellence.