By Amy Gee

In 2014, carbonated soft drink sales had been in decline for more than a decade. The public was increasingly concerned about high sugar consumption, shunning a flavor profile that had powered The Coca-Cola Company’s flagship product line for nearly 130 years. The company – like many of its legacy competitors – was feeling the strain. Soft drink sales were down across North America, ultimately reaching levels that hadn’t been seen since 2003, and Coca-Cola had fallen “particularly behind the curve in addressing the challenge,” analysts from BMI Research wrote in November 2014.

To reverse the steady decline in sales, Coca-Cola’s executives needed to revisit their expansive roadmap, 2020 Vision, and revise it to reflect changes in the market. Coca-Cola had unveiled the multi-year plan in 2009, with a stated goal of doubling Coca-Cola's system-wide revenue by the year 2020. What it was lacking, however, was shorter-term execution points that would allow the Atlanta-based beverage maker to adjust mid-course.

In what executives said amounted to “evolving” the 2020 Vision, the $46-billion company identified five key initiatives designed to drive revenue growth through segmented market roles, make disciplined brand and growth investments, drive productivity and continuous improvement, streamline and simplify, and focus on the core business model. The results were promising: Its North America division delivered its strongest annual performance in three years, with 4 percent organic revenue growth.

We recognize we still have much work to do, but we have a clear path to transform the company,” Chairman and CEO Muhtar Kent told Food Business News in early 2016.  

What Coca-Cola realized was that a multi-year plan on its own isn’t enough to guide the company toward its goals. In order to react and adjust to a changing marketplace, a multi-year plan needs to be dynamic, with structure and rigor in place to allow the organization to review and execute upon it.

Multi-year planning frequently comes under attack because of the time and discipline it involves. It can often be a barrier to good decision-making or have little influence over a company’s strategy, according to research by Marakon Associates in collaboration with the Economist Intelligence Unit. In fact, 70 percent of senior executives make decisions issue by issue rather than consulting a long-term plan for direction. 

Multi-year planning doesn’t have to be ineffective. The secret to success lies in its execution. Too many companies approach multi-year planning without a clear understanding of how much elbow grease will be required in the implementation. While the planning may feel more creative and inspirational, the implementation requires structure and oversight. It requires discipline at all levels of the company.

The best multi-year plans are also dynamic and agile, able to accommodate course corrections based on new information. Because of the length of time covered in the plan, companies need to ensure that the plan itself can account for fluctuations in the market, changes in technology and shifts in customer base. What shouldn’t change is the overall corporate goal. The goal should continue to drive the direction of the organization, acting as a signpost or a rudder to help the organization stay on course regardless of changing conditions.

Boeing Commercial Airplanes (BCA) is a case in point. Boeing’s largest business unit, BCA has had a long-range business plan (LRBP) process for many years due to the protracted cycles of commercial aircraft production. The team pairs a long-term view with weekly strategy meetings to identify market changes and needs, and the long-range business plan is updated within a week of a shift in strategy being identified. Managers believe that the new process is at least partially responsible for the sharp turnaround in Boeing’s performance since 2001, according to the Harvard Business Review.

A rigorous approach to multi-year planning allows today’s organization to realize four key benefits:

1. Attain clarity into where the organization is headed: In reality, different teams and divisions are often driving toward different goals – or are interpreting a shared goal in different ways – and that disconnect isn’t clear until the organization begins to clearly state its goals. By writing down its goals and mapping out a visionary path, the multi-year plan can align the organization and its activities.

2. Achieve transparency within the organization: A multi-year plan helps communicate the leadership team’s expectations and allows the organization to identify (and perhaps abandon) ideas that are not aligned with them.

3. Move toward greater agility: Interim checkpoints allow the organization to adapt and revise its course based on current or new information.

4. Drive efficiency: Without a clear goal, resources are often wasted on initiatives that aren’t aligned with the organization’s direction. Dynamic planning allows leadership to align the company’s resources against specific activities and benchmarks, ensuring a more efficient, nimble operation.  

Multi-year planning is like an architectural blueprint, the value of which is not fully realized until the structure is erected. It requires upfront planning, an understanding of the big picture and the ability to execute, taking stock of progress at interim checkpoints along the way. The organization that is willing to commit to the discipline and rigor required, however, can reap the benefits of a streamlined organization in which all activities and resources are focused on its overarching goals.


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The moment of transition holds both fascination and opportunity for Amy Gee.  She has a history of producing results in especially complex transitions. She oversaw the Y2K implementation for Household International (a project that involved running over 10 million lines of code); ran the multi-million-dollar IT portfolio management practice and department operations function for HSBC Holdings; and rolled out University of Wisconsin-Madison's new portfolio management system. She holds a master’s degree in Counseling Psychology from John F. Kennedy University and a bachelor’s degree from Marquette University.

 

 

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