Navigating the Rising Cost of Business: Part 3

By Rich Daum, CJ Grasso & Cody Rothwell

If you haven't already, read part 1 and part 2 of this 3 part series.

Sustaining results over the long term with your team

In the first two articles of this series, we focused on team dynamics and processes to help business leaders navigate the complexities of the current economy. From aligning teams around the priorities and resources to deliver the bottom line, to driving cross-team collaboration that enables effective execution, we discussed how leaders set up their teams for success and avoid missteps.

But how do you ensure your teams are playing the long game? That current execution is linked to your long-term strategy and consistently delivers results for your stakeholders?

In this article we focus on how to sustain gains over the long term. We challenge the efficacy of the traditional annual planning cycle and offer an alternative with a longer planning horizon that identifies resource and execution requirements in advance, so your strategic priorities remain on track and you avoid costly mistakes.

Forward-looking business reviews link current execution with the long-term strategy and ensure resources are in place at the right time to maximize productivity

Planning and alignment are ongoing, iterative processes that can easily break down if leaders fixate on the rearview mirror. Retrospective business reviews that assess whether initiatives are on track are critical but fail to provide up-to-date clarity on where the business needs to go. The most effective business reviews answer “where are we now?” within the context of “where do we go from here?” Balancing these questions with equal weight allows leaders to keep teams aligned and provide actionable guidance to execute effectively over the long-term.

Most companies have multi-year strategies or vision statements that describe what they seek to accomplish over periods of usually 3-5 years. But they tend to execute against the strategy incrementally in annual plans—documents too narrowly focused on the outcomes of a single planning year that simply pick up where the previous year’s results left off with a new plan to advance the goal further in the coming year.

This static method of planning for and reviewing performance fails to link current execution to the objectives of the multi-year strategy, nor does it forecast resources and execution requirements that should be synchronized over multiple years to ensure the company achieves its long-term objectives. This heightens the risk of resource misalignment over time and the potential for wasted effort and unnecessary costs.

McChrystal Group research indicates companies who can balance short- and long-term objectives had 160% greater median income growth 12 months later than companies that struggle to balance current execution with long-term objectives.

How can leaders tackle long-term resource planning in a high-cost environment that presents far more questions than answers?

A quarterly rolling operational plan review (ROPR) provides both a critical review of the previous quarter’s performance as well as a forward-looking assessment of the execution requirements and resources needed to keep the company’s strategic priorities on track. For most companies, a 6-quarter forward view is appropriate, but some may consider an 8-quarter view more relevant, particularly companies with long research and development pipelines or long lead time seasonality trends like apparel.

During a ROPR-style business review, each team with responsibility for a strategic initiative begins with a detailed performance review of the latest quarter and the status of associated actions, financials, and resources. The focus is to determine what is working and what is not. For actions off track, the question becomes “why?” Is it a performance issue or a resource issue? Corrective actions are discussed and decisions made to fix what is not working.

In some cases, particularly for failures in back-to-back quarters, a more impactful discussion and decision should center on whether the initiative is actually a viable effort. It might have been a “bad bet” from the outset and the right decision is to discontinue it without allocating more resources to a failed initiative.

The team then transitions to the actions, timelines, and resources required in the upcoming quarters to advance the initiative toward delivering results that support the company’s long-term objectives. If your company is already executing a ROPR, the team updates the next five quarters that were briefed at the previous review with updated, tighter information. The sixth quarter out is additive with a rough view of the execution timelines and resources required.

Leaders should expect to allocate 1-2 days to accomplish a comprehensive review of the company’s highest priority initiatives, but the investment is time well spent.

The advantages of the ROPR are several. Not only does it continuously align teams across the company to focus on the long-term strategy, but it also provides a complete picture of how the various strategic initiatives relate to one another over time and where there are conflicts to resolve before they become problems.

It allows CFOs and CHROs to plan for critical resources like financing and talent acquisition 18 months in advance and for executives to succinctly articulate long-term efforts to stakeholders with a level of detail and confidence usually lacking in annual planning cycles. And in cases where an annual plan is still a requirement, the planning process is much simpler and faster because the plan is writing itself in advance during each quarterly review.

More importantly, the ROPR provides greater visibility for leaders to control costs over the multi-year strategy by synchronizing and optimizing resources for the initiatives that really matter to the bottom line. By extension, it almost guarantees higher productivity for your strategic initiatives. And it allows leaders to mitigate risk to the long-term strategy by identifying problems early in the pipeline and making timely decisions to alter paths before it is too late to impact the outcomes.

Take for instance the case of a rapidly growing sports apparel company challenged by complexity at scale. As the company passed $1 billion in revenue, it discovered teams across its value chain were operating on their own timelines, despite their inherent interdependence. Business reviews too frequently were filled with teams providing retrospective updates on unforeseen conditions that led to missed deadlines and poor order fill rates. Potential revenue was left on the table because the teams did not have a structure in place to align their forecasts and regularly review if the right resources were in place.

The company implemented a rolling operational planning review so that each team would provide a review of what had happened and what would be needed in the quarters looking forward. Through six-quarter planning and a series of more frequent forums, the company increased on-time delivery of its product specifications to factories from 50 – 85% meaning the right products were “buy-ready” when they were needed. Asked how he would describe the positive change, the Chief Supply Chain Officer noted, “I can’t remember the last buy-ready debate [the supply chain team] had.”

This case study is a good example of how the ROPR business review allocates equal time to assessing what happened and why with a forward-looking view of what needs to happen next and the resources required to deliver the company’s long-term objectives. Linking current execution to the long-term strategy is fundamental to consistently meeting your goals and stakeholder expectations over the long run.

Practical steps for senior leaders to do now:

1. Consider how your current annual planning process affects business continuity

  • Is there a break in continuity between your fiscal year Q4 and Q1 that requires the roll out of a new annual plan instead of a continuous focus on the long-term strategy?
  • Does it effectively link quarterly execution goals and allocate resources to deliver your multi-year strategy or simply manage a proportional representation of the strategy?

2. Assess the effectiveness of your business reviews

  • Do they focus too much on what happened and why at the expense of which adjustments must be made in the coming periods?
  • Do they provide insight into future execution and resource requirements with sufficient time for the team to adequately coordinate and prepare?

After reflection, if your sense is that you often see a break in business continuity between annual plans, always seem to rush to get the next plan rolled out, or your team is waiting on resources, then consider transitioning to a 6-Quarter Rolling Operational Plan Review to get ahead of the curve.

Series Conclusion: Your team is the key to navigating the rising cost of business

Though we’ve discussed at length the challenge of dealing with back-to-back economic disruptions, success in today’s operating environment requires leaders to deal with complexity at scale. Making sure your teams are aligned on what is most important to the company will maximize their productivity and enable more informed cost and pricing decisions. Implementing information sharing and cross-team collaboration that enables extreme transparency, even to the point where it’s a bit uncomfortable, allows leaders at every level to understand how their actions impact the organization and vice versa. Finally, a rolling operational planning review (ROPR) connects current execution to long-term goals and ensures the right resources are in the right place at the right time to deliver your company’s objectives.

Taken together, these imperatives allow organizations to take a multi-year approach in a high-cost environment that is increasingly dominated by near-term challenges. When circumstances inevitably shift or opportunities emerge, leaders who have the right people and processes aligned around a common strategy will thrive amidst complexity and outpace their competition.

Click to read part 1 and part 2 of the 3 part series, Navigating the Rising Cost of Business.

Rich Daum

Senior Principal

Rich Daum is a Senior Principal and leads client engagements in the industrial and manufacturing, aerospace, and financial services sectors. He is an expert in strategy formation and translating strategy to action to realize corporate objectives.

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CJ Grasso


CJ Grasso is an Implementation Associate currently advising a technology company on strategy alignment and overcoming operational challenges.

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Cody Rothwell


Cody Rothwell is an Implementation Associate, where he leverages his past experiences as an investment analyst to assess organizations, uncover areas for improvement, and implement solutions to address their most pressing challenges.

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