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Blog 01: From Planning and Control to iPM
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Blog 01: From Planning and Control to iPM

It is almost impossible to imagine, but organizations such as Microsoft, Apple and Philips also arose from a few people. The founders, who had an idea, a lot of passion and energy, wanted to make the best of it. And they succeeded.

Every organization starts small and grows if it is successful.

This growth goes through different phases, and at a certain size, the need for information arises. After all, it is no longer possible to walk down the corridor, look everyone in the eye and ask whether it will turn out all right today. Contact with employees becomes less frequent. Employees are on different floors, buildings or locations. Even with employees sitting on the same floor, we see that the approach of “visiting each other” is decreasing within organizations. But how do we know if things are going well? Information becomes important. Information that indicates whether the strategy is being executed. Performance Management is gaining ground, in many organizations shaped by the Planning and Control cycle. 

This Planning and Control cycle contains various steering processes such as strategy formation, budgeting, forecasting, review and remuneration. Where founding fathers enthused their first employees with a lot of passion, now rigorous processes are set up to keep a grip on the implementation of the strategy. Processes with which these founders often have little affinity. After all, they are entrepreneurs who are only too happy to leave the organization of these management processes to their right-hand man: the financial director. The current popularity of storytelling in strategy communication is undoubtedly the result of nostalgia for the passionate stories of the founders of the past.

Island thinking is fueled and the focus on the common objectives disappears.

Peter Geelen – iPM Partners

Learning capability

Large organizations draw up extensive roadmaps to enable these P&C processes to function. Strategy formation before the summer, then going on holiday and from September onwards starting the budgeting process to make sure it is ready before the new year. On top of that, there are three rolling forecasts and twelve monthly reviews in between to make sure the budget is realized. The organizational strategy is translated into departmental plans and budgets. Followed by bottom-up accountability during the review to ensure that the budget is achieved. Does this accountability mode stimulate the learning capacity of the organization? The learning capacity that is so relevant to be agile and to be able to respond quickly to changes. Changes that are always there (and not just before the summer), because the strategic plan is only an estimate of the future.

It is also the process where organizational objectives are translated into departmental objectives. A mountain of objectives arises at various levels, as a result of which the focus disappears. The departmental objectives take precedence over the organizational objectives. Not because we necessarily want it that way, but because it is stimulated from personal reward, which finds its centre of gravity in the departmental results. Island thinking is stimulated and the focus on the common objective disappears.

It is also the process where organizational objectives are translated into departmental objectives. A mountain of objectives arises at various levels, as a result of which the focus disappears. The departmental objectives take precedence over the organizational objectives. Not because we necessarily want it that way, but because it is stimulated from personal reward, which finds its centre of gravity in the departmental results. Island thinking is stimulated and the focus on the common objective disappears.

We see that things are not much better in smaller organizations. The same mistakes are made there that cause the above statement to become a bitter truth in the face of successful growth. Take, for example, the scale-up method that many companies with growth ambitions embrace to guide them through this process. This method has the MT in their meeting-rhythm inform each other every day about their contribution to the goals. So first Marketing, then Sales, then Operations and so on. Accountable to your colleagues every day whether you are achieving your departmental targets. Great to be accountable, but what is actually being learned? The reason for Scale-up Netherlands to replace this part of the program with the iPM method is to prevent future compartmentalization within these organizations.

Strategy

Preventing compartmentalization: how does iPM do it? We remove the most important structural error from the traditional Planning and Control cycle. Instead of the organization chart, we put customer chains at the centre of the management structure. After all, value is created in customer chains by having all the links in the chain work well together. Organizations that apply iPM form their strategy around a limited number of objectives (max. 4 is our advice). In article 3 we will elaborate on this. These organizations translate their strategy (strategic objectives) into a future vision of the desired structure of each customer chain. A chain vision that involves employees, challenges them and stimulates cooperation. This clearly states which values the organization can create for customers and what it yields for itself. It also determines which performance indicators (KPIs) are needed to measure success and what performance is expected. And for each chain, there is an action plan to exploit opportunities for performance improvement.

What a beautiful prospect: departments working together and linked by a common goal: the customer. We call this chain cooperation. Chain cooperation is stimulated because it is agreed with all the links in the chain when the total chain is successful. That success is a (chain) team responsibility, so that we really feel and experience that we are in this together. Departmental interests are made subordinate to the interests of the chain.

By organizing the performance review – we prefer to call it the performance dialogue – in a playful and dynamic way, cooperation really takes off. We no longer talk about each other but with each other about performance. We are no longer I-lands, but We-lands. It is not the Planning and Control cycle that determines the frequency of the consultations (often linked to the monthly reports), but the heartbeat of each chain. Weekly chain consultation is normal for high-frequency processes. By asking the right business-relevant questions during the performance dialogue, the team will develop further. Room is created for sharing insights, reflection and learning. That is the basis for improving every day as a chain team and as an organization, on the way to realizing the strategic ambitions or dreams.

The iPM implementation approach

In the coming weeks, we would like to take you through the questions and changes that we encounter in practice during the implementation of iPM at our clients. Questions about the design and set-up of iPM, but also about the best implementation approach. The following topics will be discussed:

Introduction of iPM

  1. From planning & control to iPM
  2. Ready for take-off
  3. Setting the right targets
  4. Which customer chains does my organisation have?
  5. Division of roles: hierarchy versus chain
  6. Tactics of the chain in focus
  7. Customer journey versus customer chains
  8. How to determine the right KPIs
  9. Getting your KPIs right in 10 days
  10. Consultation structure in iPM organisation
  11. Effective performance dialogue and the usefulness of BRV
  12. Leader and team development
  13. Encouragement as a style to get more out of teams
  14. iPM in complex organizations
  15. Tips for implementation

Curious? Get in touch with us!

We outline what we often see in the traditionally controlled organization and indicate what that looks like when you apply iPM. Want to know more about healthy performance management? We illustrate this with situations and examples we encounter in daily practice. Contact us and we will help your organization move forward!

Back to the overview

Winning with the right KPIs

From strategy to execution: how performance indicators can help your company.

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