A well-constructed AOP (Annual Operating Plan) has 6 major components, all which must be linked, in order for any organization to focus upon an AOP’s successful outcome.
The major components, in priority order, and their basic definitions are:
- Destination: The Look (picture) of Success
- Strategy: The work we will do and will not do. (In CPG/FMCG retail, strategy begins with DSMPQ.)
- Structure: How we are organized to complete the work / strategy.
- Capability: The skills, knowledge, experience(s) needed to confidently accomplish the work (e.g. strategy).
- Management Routines: How, when and whom will measure the progress of the work (e.g. strategy).
- Reward & Recognition Systems: Aligned incentives we provide the organization for work / strategy execution.
Throughout our history, in working with our global clients, we find a preference to prioritize changes in “structure” (e.g. our functional organizations and teammates that occupy the jobs) rather than to finalize the harder components: Destination and Strategy. Rarely does any business simply adjust its human capital structure (without addressing the other 5 components) and successfully achieve their AOP. Another component often overlooked is Capability. Given the need for businesses to be nimble and flexible, any new skills identified as necessary to achieve AOP are often assumed to be resident within our legacy organization, when this is often not the case.
As we’ve worked with multinational and new-to-market, entrepreneurial companies around the globe, we’ve established templates which are as user-friendly at the Board level as they are at All-Company results sharing sessions. The orange button on the right links to a Powerpoint that illustrates a few of these templates.
What is important to note is that every companies situation is unique. Therefore, our approach is to establish with senior leadership an AOP model which fits each companies unique needs. Our role in working within your planning process is less about the framework / template and more about ensuring that we’ve carefully considered the important pillars and strategic corridors of growth, to include addressing measurement scorecards and needed capability to achieve the finalized AOP. Chances are good that we’ve encountered the same challenges your team is facing and can give you a starting point for solution development.
Talk with us about how we can add value to your existing AOP development / process. We have deep, global, multi-category experience which can be leveraged. We are also deeply experienced in any of the 6 plan building components, all of which will provide your company leaders confidence, a focused roadmap and scorecards for AOP success!
