Strategic PlanCascading Strategic Plans during Policy Deployment

The strategic planning process can sometimes get really complicated. Especially when it comes to large enterprises with multiple lines of business, where each of the lines of business are unique and have nothing common between them.

The objective of this article is not to give prescriptive advise on what will work for particular situation, but restrict to introducing the various levels of strategic plans as one chooses to cascade them. Arriving at an apt solution for a particular situation would require me to know about your organization and its current practices.

Broadly the strategic plans are classified into 3 levels based Hoshin Kanri Policy Deployment Framework:

Enterprise Strategic Plan

A strategic plan drawn at this level will be owned by the group chief executive or president. Two scenarios are likely First, the enterprise operates in different geographies and so each geography is a separate legal entity and operates independently. Second, the enterprise could be a conglomerate having multiple lines of business such as retail, telecom, mining, hospitality, etc. In either of these cases, the divisional strategies would be vastly different from each other. These types of organizations are usually referred as M-form (Multi-divisional form). It is very difficult to have a holistic strategic plan at this level for whole enterprise. The strategic plan at this level is more about goals and broad overarching strategies of the enterprise. Overarching strategies are closely linked to the enterprise’s values and guiding principles such as agility, vibrancy, sporty, caring, economical, etc.,

Broadly, the enterprise level strategic plans includes 3-5 goals of the enterprise for next 3 years, 1 ~3 overarching strategies and owners for each goal.

However if the enterprise, isn’t that diverse, then its enterprise level strategic plan resembles divisional strategic plans in form, structure and construction.

Divisional Strategic Plan

Divisional strategic plans are owned by the divisional business heads. They include 3-5 goals, 5~6 strategies specific to the division, derived based on the division’s internal and external environment conditions (SWOT), ownership assigned for each goal and specific strategic projects (initiatives) that will help to achieve the goals. The entire leadership team of the division is involved in creating this strategic plan. If there is a enterprise level strategic plan, then the goals of the divisional plan align to the enterprise’s. With regard to the strategies, while divisional strategies would be more specific, there will be alignment to enterprise strategies.

There would be as many divisional strategic plans as the number of divisions in the enterprise.

Functional Strategic Plan

A functional strategic plan is created for each unique function of a division. It is owned by the respective functional heads. The main purpose of the functional strategic plan is to align the functional goals to the divisional (and enterprise) strategic plans. The goals are directly derived from the divisional plan. Usually there isn’t much emphasis on the functional strategies. Instead functional strategic plans are more tactical in nature. Functions will have to own and contribute to divisional strategic projects as well as drive function level strategic projects. For example, a HR department may own a divisional strategic project to bring employee attrition below certain level, but they also want to drive function level strategic project to improve HR staff efficiency. Thus functional strategic plans are more about resource ownership, alignment between divisional and functional strategic plans, managing the utilization of resources between divisional and functional priorities, etc.,

There are as many functional strategic plans as the number of functions in the division.

In large enterprises, the functional strategic plans also need to have alignment to enterprises like functional strategies. For example, the HR functional strategic plan needs to be aligned to respective divisional strategic plan as well as enterprise level HR Strategic plan.

In cascading functional strategic plans from enterprise and divisional strategic plans, the role played by the facilitator is very important. He/She should diligently map the enterprise and divisional priorities, interview all concerned, understand ground realities and above all, stay neutral.

About the Author:

Nilakantasrinivasan aka Neil helps a range of large enterprises in services and manufacturing, with particular emphasis on execution of business & functional strategies. He can be contacted at

If you are new to Strategic Planning and want to familiarize yourself on what a strategic plan is and how to go about preparing one, then this article will be useful.

Strategic plans are prepared at different levels using different approaches, but the ones mentioned below are 5 important elements of a good strategic plan. The framework of Hoshin Kanri Policy Deployment aptly covers these 5 elements.

Traditionally strategic plans are considered to be complex and bulky reports that runs to pages. But that isn’t necessary true. However, it is true that there is lot of work that goes into creating an organization’s strategic plan. But a good strategic plan can just be a one-document containing the following elements :

Business Goals

Business goals are the organizational level goals that are closely tied to the organization’s vision and mission. It reflects the aspirations of the organization and their commitment to their customers, shareholders and employees. Usually the organizational goals are restricted to not more than 5 and preferably just 3. Each of these goals are quantifiable measures with agreed targets for next 3 years. Not all goals are equally important, so it would be a good idea to arrange them in the order of importance.

If your organization feels that all the goals are equally important, then there is no need to prioritize them.

Measures of Success

As mentioned earlier, it is important to quantify all goals. So there is a clear difference between vision and goals. ‘To be market leader in next 3 years’ isn’t a goal. For some goals, there may be more than one measure of success. It’s a good idea to include all of them, but they can be carefully screened before inclusion.

Organizational Strategies

Organizational Strategy is the most misused management term. Goals and strategies are interchangeability used and they are thoroughly confused. As Michel Porter puts it, strategies represent the ‘How’ part of achieving the goal, not the ‘What’. Strategies are arrived based on internal and external environments. Number of strategies to be no more than 7 but preferably just 5. I’m not covering the details of the how organizational strategies are arrived here, but you will find information regarding this in other articles. Most times, a given strategy can be helpful in achieving more than one goal.

Like goals, strategies have to be prioritized as well. Some organizations consider inorganic growth as a strategy and include it as the last strategy. But it isn’t mandatory to include acquisition as a strategy by default.

Ownership for Goals

Goals without individual ownership will never be accomplished. Hence each of the goals at the organizational level are owned by individual leaders. Just to reiterate, I used the word ‘Owned’ not ‘Assigned’. Hence the individual leaders of the organization engage in a discussion and agree to own goals rather than being assigned by the Chief Executive. In achieving some of these goals, there will be inter-dependencies. That’s where joint accountability comes into play.

Strategic Projects (Initiatives)

Strategic Initiatives are strategic thrust areas where the leadership believes the organization has to do something different in order to achieve 1 or more goals. Few synonyms for Strategic Projects are Strategic Initiatives, Critical Strategic Projects, etc. There is no restriction on the number of strategic projects, but should be limited based how much an organization can manage concurrently. Most organizations falter here. Similar to goals and strategies, strategic projects are also prioritized. In order to ensure a strategic project is successful, there needs to be a robust project plan, cross-functional teams and rigor.

Once created, a strategic plan is a live document and needs to be reviewed and updated every month.

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