15 Common Pitfalls of Long Range Planning

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The Most Common Pitfalls of Long Range Planning and the Solutions to Address Them

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15 Common Pitfalls of Long Range Planning

  1. 1. 15 Common Pitfalls of Long Range Planning Most Common Pitfalls of Long Range Planning And the Solutions to Address Them By: Madison Laird
  2. 2. 15 Common Pitfalls of Long Range PlanningThis presentation Most common pitfalls Pitfalls with greatest impactfocuses on thosecommon pitfalls atthe “sweet spot…” Easiest to solve pitfalls
  3. 3. 15 Common Pitfalls of Long Range Planning Pitfall #4: “Risk Homogenization ” (ho•mo•ge•ni•za•shuhn – noun. Formed by blending unlike elements.) How is risk being treated in the planning process?
  4. 4. 15 Common Pitfalls of Long Range Planning Pitfall #4: “Risk Homogenization ” (ho•mo•ge•ni•za•shuhn – noun. Formed by blending unlike elements.) “Not all forms of risk are created equal.” Companies that consolidate risk scores equally or do not differentiate between different types of risk may unintentionally direct risk to their most vulnerable areas.
  5. 5. 15 Common Pitfalls of Long Range Planning Pitfall #4: “Risk Homogenization ” (ho•mo•ge•ni•za•shuhn – noun. Formed by blending unlike elements.) Companies that do not adequately differentiate between different types of risk usually find themselves exposed to unanticipated internal or market forces without an adequate response.
  6. 6. 15 Common Pitfalls of Long Range Planning Pitfall #4: “Risk Homogenization ” (ho•mo•ge•ni•za•shuhn – noun. Formed by blending unlike elements.) Solution – • Adequately balance and prepare for different types of risk – capture and understand risks at the project level: – Competitive risk, technology risk, execution risk, and demand risk must be recognized, treated differently, and balanced across a portfolio.
  7. 7. 15 Common Pitfalls of Long Range Planning Pitfall #4: “Risk Homogenization ” (ho•mo•ge•ni•za•shuhn – noun. Formed by blending unlike elements.) Planview solutions provide a mechanism for capturing answers about different kinds of risk at the project level.
  8. 8. 15 Common Pitfalls of Long Range Planning Pitfall #5: “Manual Manipulation” (ma•nip•u•la•shuhn – noun. The act of adapting or changing.) Is your company still using multiple spreadsheets to support extended long range planning cycles?
  9. 9. 15 Common Pitfalls of Long Range Planning Pitfall #5: “Manual Manipulation” (ma•nip•u•la•shuhn – noun. The act of adapting or changing.) Many companies continue to use spreadsheets for long range planning even though manual consolidation is resource-intensive, time consuming and encourages human error.
  10. 10. 15 Common Pitfalls of Long Range Planning Pitfall #5: “Manual Manipulation” (ma•nip•u•la•shuhn – noun. The act of adapting or changing.) Companies that rely on manual processes for long range planning usually make planning more about process and less about decision-ready, quality output.
  11. 11. 15 Common Pitfalls of Long Range Planning Pitfall #5: “Manual Manipulation” (ma•nip•u•la•shuhn – noun. The act of adapting or changing.) Solution – • Create a centralized Single-Source-of-Truth for storing, viewing, editing, and analyzing data. • Use compatible spreadsheets as templates to ease constituents into system use.
  12. 12. 15 Common Pitfalls of Long Range Planning Pitfall #6: Tool Misapplication (mis•ap•li•kay•shuhn – noun. Making incorrect use of.) Some companies try to use existing tools to handle the long range planning process. This is usually worse than a manual approach.
  13. 13. 15 Common Pitfalls of Long Range Planning Pitfall #6: Tool Misapplication (mis•ap•li•kay•shuhn – noun. Making incorrect use of.) Do the tools you rely on for your planning automation really put square pegs in round holes?
  14. 14. 15 Common Pitfalls of Long Range Planning Pitfall #6: Tool Misapplication (mis•ap•li•kay•shuhn – noun. Making incorrect use of.) Solution – • Use the right tools to drive alignment and quality output. • Train financial resources to use tools to support their analytical approaches.
  15. 15. 15 Common Pitfalls of Long Range Planning Pitfall #8: “Premature Destination” (des•ti•na•shun – noun. The end point of a journey.) Does your planning process solicit strategic input, or does it essentially use narrow guidance to predefine the outcome?
  16. 16. 15 Common Pitfalls of Long Range Planning Pitfall #8: “Premature Destination” (des•ti•na•shun – noun. The end point of a journey.) Many companies start their long-range planning process by issuing detailed targets… essentially conflating the planning and budgeting process – losing a chance to gain valuable strategic insight.
  17. 17. 15 Common Pitfalls of Long Range Planning Pitfall #8: “Premature Destination” (des•ti•na•shun – noun. The end point of a journey.) Companies who define their planning process using their base forecast usually experience a gap between business strategy and execution. They find that they can’t achieve their aspirations.
  18. 18. 15 Common Pitfalls of Long Range Planning Pitfall #8: “Premature Destination” (des•ti•na•shun – noun. The end point of a journey.) Solution – Allow business owners to reflect strategy in their own portfolio optimizations.
  19. 19. 15 Common Pitfalls of Long Range Planning Pitfall #10: “Data Inequality” (in•ee•qual•i•tee – noun. The condition of being unequal.) Does your planning process ensure that all stakeholders use the same input assumptions?
  20. 20. 15 Common Pitfalls of Long Range Planning Pitfall #10: “Data Inequality” (in•ee•qual•i•tee – noun. The condition of being unequal.) In many companies different business units answer the same questions with different assumptions.
  21. 21. 15 Common Pitfalls of Long Range Planning Pitfall #10: “Data Inequality” (in•ee•qual•i•tee – noun. The condition of being unequal.) Decision making is only as good as the data. When data is not reliable, constructs are skewed and bad decisions result.
  22. 22. 15 Common Pitfalls of Long Range Planning Pitfall #10: “Data Inequality” (in•ee•qual•i•tee – noun. The condition of being unequal.) Solution – • Provide guidance to calibrate assumptions and answers. • Design “calibration sessions” to brief constituents and have them share answers and perspectives.
  23. 23. 15 Common Pitfalls of Long Range Planning Complimentary White Paper 15 Common Pitfalls of Long Range Planning This white paper will: • Help you identify pitfalls • Diagnose their business impact • Find solutions to improve your long range planning process Download your copy at www.planview.com/15pitfalls

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