The four D’s of better strategic planning

Instead of approaching business as a series of problems to be solved—say, how to cut down on spending, or how to keep employees from getting bored at work—organizations should take a more appreciative look at themselves.

That’s the aim of appreciative inquiry, a change method that consultant Bill Swedish thinks can help businesses get out of a negative rut.

The problem-oriented approach limits business thinking, and companies end up being reactive instead of proactive. “We limit the scope of what we consider as real possibilities for our organizations,” said Swedish, who led a workshop on strategic planning at the AICPA CFO Conference in May. “Appreciative inquiry doesn’t ignore problems, but it intends to look at problems from the other side, that side being opportunity. And it intends to take the organization out of the realm of negative thinking—thinking of scarcity, thinking of lack, thinking of problems—and move the organization into thinking about capabilities, strengths, and opportunities. And that shift—that does magic.”

Here are the four D’s of appreciative inquiry, with explanation from Swedish:

Discovery. This phase is characterized by discipline and rigor, designed to define the “positive core” of the organization. What are the values? What do we do when we’re at our best? Organizations must avoid looking at questions such as, “What’s wrong with us?” Swedish said. It’s not about fixing but about identifying what doesn’t need fixing and can be improved.

Dream. In this phase, organizations explore their possibilities. “How can we create the biggest, wildest, happiest, most fulfilling future, and not just in terms of profit?” The dream phase involves thinking beyond customary boundaries. “We take the limits off and identify what these pictures of the future could be,” Swedish said. An example of a company dreaming of a new strategy: Netflix, the movie rental and streaming company that evolved from delivering DVDs to creating original content.

Design. This is a practical phase, where the ideas and energy of the first two phases are prioritized. “What has the highest value? What is the most important thing for us to do?” This is where organizations take a focused look at systems and structures, decision-making processes, and overall market strategies, Swedish said. Companies should take the best of their past, the positive core from the discovery phase, and align it with what’s possible, the dream phase, and, then, in the design phase, develop a plan.

Destiny. This phase is “a series of inspired actions,” Swedish said. The phase is ongoing, where the emphasis on thinking beyond boundaries repeats itself. In the destiny phase, an organization “lives its dream and its design and executes on that design to mold its future.”

The process then can repeat itself. Companies can go back and “rediscover”—expanding or sharpening their core. “The destiny phase is really about specific commitments that the organization makes and that the personnel in the organization make regarding this path forward, and that’s where the change actually happens,” Swedish said.

One reason strategic planning processes fail, Swedish said, is that organizations view them as an add-on. Employees think of time spent on strategic planning as something they muddle through so they can get back to their real jobs.

“The mentality that you have to go into this with is, ‘We are changing the way we think about the way we plan and execute in this organization,’ ” he said. “It takes leadership and commitment. It takes some education. People have to understand the what and the why as well as the how about appreciative inquiry. But for it to work, the organization needs to embrace this as the way forward, and not as a separate, side project.”

The original version of this article, “The Four D’s of Better Strategic Planning,” by Neil Amato, is available at tinyurl.com/mlrwcnp.

—Jack Hagel, editorial director
CGMA Magazine

Also at cgmamagazine.org

Analytics Underused as Anti-Fraud Tool
Many organizations are failing to effectively use data analytics to thwart fraud.

Almost two-thirds (63%) of 466 senior executives at leading companies around the world say they need to do more to improve their anti-fraud and anti-bribery procedures, including the use of forensic data analytics, according to a recent EY survey.

And despite the proliferation of uses for Big Data in recent years, 21% of 2,100 professionals taking part in a recent Deloitte webcast survey said their organizations have no plans to use Big Data to manage the risk of financial crimes including bribery, corruption, and money laundering.

“Today, regulators expect organizations to have holistic enterprise fraud and misuse management programs spanning all business units and international borders,” Tony DeSantis, a principal in the Deloitte Transactions and Business Analytics LLP data analytics practice, said in a news release. “However, many organizations are unsure where to begin and how to effectively apply analytics.”

The full article, “Data Analytics Underused as Anti-Fraud Tool,” by Ken Tysiac, is available at tinyurl.com/lzc4mqr.

Payments Fraud Persists
The majority of organizations continue to be affected by payments fraud, according to an annual survey by the Association for Financial Professionals.

Sixty percent of respondents said their organizations were exposed to actual or attempted payments fraud in 2013, down from 61% in 2012.

Meanwhile, 63% have either adopted additional security measures or are planning to do so in the near future. The increased security comes in the wake of several high-profile breaches of customer data, according to the survey of 449 financial professionals.

Compared with last year, fraud involving credit or debit cards has risen sharply. Forty-three percent of those exposed to fraud attacks reported that credit or debit cards were targeted, up from 29% in 2012.

“It is evident that those committing fraud are continuously adopting unique methods with far-reaching effects,” the report said. “The challenge for organizations and the financial professionals who work for them will be to stay ahead of the game.”

The full article, “Organisations Take Preventive Steps, but Payments Fraud Still Persists,” by Neil Amato, is available at tinyurl.com/qyhnvyv.

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CGMA Magazine is published in conjunction with the Chartered Global Management Accountant designation, which was created through a partnership between the AICPA and CIMA. The magazine offers news and feature articles focused on elevating and emphasizing management accounting issues.