Emerging markets are fundamentally different from mature markets; should the strategic planning process be different as well?
Strategic planning season is in full swing for senior executives all over the world. The current post-downturn environment poses unique challenges that should encourage re-evaluation of your organization’s approach to this yearly ritual, specifically in emerging markets. Based on our experience working with senior executives responsible for emerging market regions, there are three key questions that Frontier Strategy Group believes every executive should be asking before submitting strategic plans for 2012.
Today’s post will be the first of a three part series to touch on each of these critical questions.
Is the current planning process putting my career at risk by relying on faulty assumptions or incomplete data?
It was not so long ago that even the most multinational of multinational companies relied upon North America and Western Europe for the vast majority of revenues and growth. Today, it is no secret that these traditional markets have lost their luster relative to the plentiful opportunities available in emerging markets. Given the heightened priority assigned to emerging markets operations, CEOs and shareholders are holding emerging markets operations executives personally accountable for laying out corporate roadmaps for capturing growth and market share.
However, when it comes to planning, emerging markets cannot be treated in the same manner as mature markets. Reliably accurate and highly granular data often does not exist, and volatility is an order of magnitude higher in emerging markets. One of the most common missteps that executives make is to treat strategic planning as a “once and done” process, closing the book on the plan until it is time to revisit and refresh the following year. Instead, leading companies have put in place the mechanisms for tracking the plan and refreshing it on an on-going basis to ensure that it reflects rapidly evolving realities on the ground.
Many companies have formed cross-functional and cross-geographic committees to develop their strategic plans, but one of Frontier Strategy Group’s clients in the medical devices space took the additional step of creating a separate group charged with tracking performance and holding front-line managers accountable for execution of the plan. This ensures that even mid- and low-level managers contribute the necessary time and energy to the planning process and understand their role in executing on the plan once it is in place.
In my next post, we will take a closer look at the next key question: Is our planning process putting the business at risk of being blindsided by unforeseen external events and volatility?
No related posts.
Chris, some executives rely too heavily on “copy and paste” models that have succeeded in developed economies and “transfer” these to assist them in conducting business in emerging markets, which often leads to failure.
While technology and other factors have led to a “global village”, it is crucial that decision makers take realistic, unique, and local approaches while tackling common problems that they encounter as they expand into global markets.
Cultural differences, levels of real exposure and geographical proximity, education levels, etc all contribute to the success or failure of businesses as they expand beyond their traditional borders.