Can COBIT 5 principles and enablers be applied to support strategic planning exercises?
Two years ago in Mexico City, work was underway at an organization that offers managed print services and document solutions. This organization decided to start an effort to reinforce its governance and management model, starting with strategic planning. For this organization, planning and strategic alignment, among their many different aspects, were something relatively new and out of practice, but necessary in order to continue organizational growth (which was greater than 10-12 percent annually during the preceding 5 years).
Even when the organization started this effort, with the support of a specialized consulting firm, the executive group and the organizational culture were not yet ready to adopt and adapt to these new concepts. Prior to this engagement, the organization’s strategic planning was basically a document defined by the owner and president of the company.
Given this scenario and the organization’s desire to run a new, practical, short, participative and renewed exercise, the decision was made, with the help of a consultant, to create a whole new approach to review and adjust the strategic plan.
The initial idea was to choose an alternative way to run the exercise; learning from previous mistakes, revising the original approach and strategies, and combining different techniques and methods, applied in an integrated and simple way, to generate the company’s updated strategic planning. But this time, the exercise would add a particular variant: concepts from COBIT 5, specifically, 2 of the 5 principles and the 7 enablers, in order to reinforce important concepts among the executive group and other organizational areas. The organization would adopt from COBIT 5 its:
- Holistic approach
- End-to-end vision
- Relevant enablers (from the 7) that apply to the executive strategies and tactics for the company and employees
Methods and Techniques Applied to the Strategic Planning Exercise
After the initial idea, the next step in this effort was to document the full strategy (methods and techniques integrated), together with the development of all the necessary materials and documents. Then, upcoming activities such as the number of sessions and the type of deliveries in which they will be requested to participate were communicated to the commercial, operations, finance and human resources areas, among others (e.g., the executive group). They were also asked to prepare some other information and data related to the strengths, weaknesses, opportunities and threats (SWOT) matrix; statistics; history; and trends.
The documented strategy to undertake the strategic planning exercise was integrated using methods and techniques including:
- Parts of the general method:
- Hoshin Kanri planning to guide the whole planning exercise
- SWOT matrix to generate strategies and tactics among the executive group
- Balanced scorecard (BSC) methodology to classify the indicators and strike a balance between hard and soft aspects
- Boston Consulting Group (BCG) matrix to analyze the organization’s current situation in the market, according to its product and service portfolio
- General planning principles:
- Governance and management based in COBIT 5 to define specific principles for the executive group to orient, increase and clarify the vision to create and align strategies with tactics
- Indicator system to define the 4 basic elements that at least all key performance indicators (KPIs) must integrate in the scorecard (purpose, formula, source of data and frequency)
- Information Mapping to set some specific principles for the executive group in order to limit or restrict the number of strategies and tactics generated
- General planning information:
- Strategic plan for the period from 2013-17
- Sales forecast for the period from 2013-18
- Market study from a research firm in Mexico
Additionally, some other techniques were considered. These techniques included:
- Strategic cascading—Part of the Hoshin Kanri method and consisting of splitting from the vision down to the objectives and business goals. Both aspects are defined by the president of the organization and then from the objectives and goals, continuing down to the strategies and KPIs.
- SWOT crossing—Part of the SWOT analysis and the Hoshin Kanri method. It consists of generating strategies and KPIs, then tactics and indicators (cascading), both based on the SWOT matrix and other data/information elaborated on or gathered by the executive group.
Principles and/or Enablers Used When Planning in an Organization
Once all the methods and techniques to be used in the strategic planning exercise were established, the next step was to establish the guiding principles for the generation of strategies and tactics, with the support of the executive group. These principles, based on COBIT 5, were established as follows:
- Principle 1: Adoption of an end-to-end approach or an approach to thinking throughout the whole organization. The executive group was asked to take into consideration all the internal and external aspects, elements, areas and stakeholders relevant for the achievement of the strategies and tactics.
- Principle 2: Implementation of a holistic thought process considering all areas and their interrelationships. The executive group was tasked with taking into consideration the organizational aspects of the customer (the 7 enablers) in order to define good, complete and integrated strategies and tactics. COBIT 5’s 7 enablers are:
- Principles, Policies and Frameworks
- Organizational Structures
- Culture, Ethics and Behavior
- Services, Infrastructure and Applications
- People, Skills and Competencies
- Principle 3: Generation of 5 to 9 objectives, strategies or tactics as a maximum at each respective cascading level. With this principle, the idea among the executive group was to set a parameter for brainstorming or idea generation, in order to limit or restrict the size and complexity of the strategic plan.
The Result When Combining COBIT 5 With the Strategic Planning Exercise
After taking on this exercise through 2014, the final result achieved by combining these techniques, methods and principles for strategic planning was a complete, integrated, participative and aligned plan that set the foundations for a directed, controlled and efficient operation.
Now, when this exercise is repeated with the same formula, the planning sessions with executives are shorter; the executive group is more proactive and more focused on business goals—armed with a clear understanding of a holistic and end-to-end approach. Another benefit to the organization is an understanding of what elements to consider while thinking or generating strategies and tactics. Over and above these benefits, the organization saw great results in 2014, indicating that almost 90 percent of its areas achieved nearly 80 percent of their objectives and goals set forth in the strategic plan. As a result, the expectations for 2015 are high.
One final lesson learned from this case is the fact that now the organization has a clear idea of the responsibilities of the president and the board, as well as the responsibilities of the management body. This simple change improves the organization with regard to governance and management.
David Mondragon Tapia, COBIT Foundation, ITIL Expert, ISO/IEC 20000, PRINCE2
Is an industrial engineer of systems at the Technologic Institute of Monterrey, Mexico. He has more than 12 years of experience working as a consultant, trainer, writer and lecturer in the areas of technological best practices and process management. He can be reached at [email protected].