Strategic Planning and Performance Management

Strategic planning and performance management together are defined as the process of setting goals, defining actions to achieve the goals, allocating and motivating resources to execute the actions and directing and monitoring performance to ensure successful execution. The strategic part describes which goals are set and how they are to be achieved, while the performance management part ensures that resources are allocated and used effectively in reaching the goals. This chapter begins by describing the typical strategic planning and performance management processes. The generic strategic planning and performance management process is an annual process comprising four steps and involving different protagonists within the company: strategic direction setting; bottom-up planning; dialog and budgeting; and business performance monitoring and management. The chapter illustrates why does strategic planning fails and explains what can be done about it. It then discusses what a corporate strategy might look like and some considerations for defining it.