Top 5 Trends in Strategic Planning for 2016With 2015 rapidly coming a close, many organizations are wrapping up their strategic plans for the upcoming year. With this in mind, we thought it would be an opportune time to take a look at some of the trends in strategic planning that we anticipate for 2016. With customers across numerous verticals, and thousands of active plans in AchieveIt, we have noticed a few commonalities in how our customers are approaching planning for their organizations and the types of initiatives they are tackling. With that, here are your top 5 trends in strategic planning for 2016:
- Prioritizing Short-Term Goals over Long-Term Objectives Traditionally, strategic planning has always had longer time horizons. Plans were often structured to be forward looking, 3 to 5 years in the future. But given the rapid advance of technology disruption, the widening competitive landscape, and resulting downward pressure on margins across industries, longer term strategic plans are starting to hold less weight within organizations. Leaders are now encouraged to plan with agility in mind, which leaves little room for concrete long-term focus.We aren’t sure if this is good or bad in the grand scheme of things. However, we are certain that this paradigm shift has caused a fundamental change in how companies approach strategic planning. Instead of annual goals and planning periods, companies are setting quarterly strategic targets more frequently. Quarterly planning allows leaders to keep a better pulse on business success, and course-correct strategy when necessary.
- Increased Strategic Focus on Mergers and Acquisitions Activities We are seeing mergers and acquisitions planning surfacing with more frequency with our clients as they prepare to enter 2016. Though we are not certain of the impetus behind the increase in M+A, we hypothesize that a significant factor is the current economic climate. A couple indicators we have isolated are the price of oil and the anticipated belt-tightening of venture money for startups.Plummeting oil prices have put the oil and gas industry in a precarious position, needing to consolidate operations to ensure a better cost structure. One of the easiest ways to do this is acquire smaller market players to increase economies of scale and market share (just as Walgreens and CVS are doing in the pharmacy sector). On the flip side of this equation, lower oil prices have left many businesses with excess capital due to a lower cost structure. We anticipate these companies to put this capital to work through acquisitions that will expand their service offerings and capabilities.The ripple effect of the anticipated venture capital funding crunch in 2016 will certainly be interesting to watch in the upcoming year. Much has been made of the dying ‘unicorn’ startups, and how venture capital is refocusing more on revenue numbers in valuation, rather than user growth. With this in mind, there will be a lot of technology companies seeking follow-on rounds that will be faced with a tough decision if their revenue numbers do not match their desired valuations. The options seem to be take a down round, or shop your company to as a potential acquisition to bigger players. We think the latter is more likely, as VCs will get their money and get out in this new liquidity crunch. Companies should plan for this reality accordingly – On both sides of the coin.
- Increased Focus on Strategic Technology Investments As more and more businesses transition to the cloud, the days of legacy systems and manual processes are rapidly coming to a close. A significant portion of strategic planning time will be allocated to collaboration with the IT department around technology upgrades across departments. As more and more departments turn to software solutions to help increase productivity, and decrease overall costs, the creation of an integrated technology ecosystem within the organization will become strategically paramount. Look for IT to become more heavily involved in both short and long term strategic planning exercises.
- Increased Focus on the Mobile Ecosystem With millennials becoming a larger percentage of the consumer market every year, companies are having to alter marketing and operational processes to fit this generation’s buying behaviors. As recent studies show, 86% of millennials own a smartphone, using it to browse social media and access business websites on mobile browsers. With mobile search traffic eclipsing desktop search traffic as of May 2015 (announced in a press release from Google), it is imperative for companies to involve mobile strategy in all upcoming strategic planning meetings for 2016. If organizations don’t, they’ll risk leaving a sizable portion of the market outside their reach.
- All Strategy Will be Informed by Data Big data is more than just a buzzword today. Companies have unparalleled access to data, all housed in their CRM, ERP, Marketing Automation, or similar software platform. There is also a proliferation of third party data sources. Not to mention enterprise level Business Intelligence tools that help individuals make sense of all the information. Strategic planning of the future will no longer rely on gut feeling or conjecture, but rather will be backed by empirical data that supports the decision making process. Companies will probably be hiring more data scientists to help the strategic planning leadership determine the best future course for the organization, but the cost will be worth it given the sheer amount of information available to strategists to inform their opinions of the future.
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