The season is back. In about every organisation, leaders are busy turning their strategies into plans and budgets. They spend hours cascading objectives and aligning their activities with strategy. Moreover, they fight for higher budgets in line with higher targets. It’s a ritual in a theatre that has passed its time.
In a dynamic market context, changes are faster than plans can handle, performance targets are outdated the moment they have been agreed upon, and budgets miss valuable opportunities. Here is why:
- Traditional strategy, planning and budgeting focuses on measurable factors. But, 90% of the capabilities in organizations are invisible. It leaves what truly matters untapped.
- Traditional strategy, planning and budgeting is driven by an annual top-down approach But, 90% of the knowledge resides with employees. It ignores the creative and innovative part of the entire organisation.
- Traditional strategy, planning and budgeting aligns resources to annual targets. But, market changes are faster than plans can handle. Opportunities don’t follow an annual schedule. As a result, leaders and employees are in constant target setting mode, missing out on opportunities.
- Traditional top-down strategy, planning and budgeting determines performance targets. But, self-responsible employees know that targets have little to do with what they need to perform at their peak. As a result, target setting averages in on mediocrity rather than superior value.
It is time we rethink what we have always done in management and believe was right. The time has come for the agile paradigm shift – a new play in a different setting.
Since 2002, we create twins of organizations with the AI-based operating system for dynamic leadership.
Management Insights is an independent and privately owned company with headquarters in Zuoz, Switzerland.
For more information, contact Lukas Michel, founder and author, or our partners across the world.
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