Learn what driving forces are shaping strategic planning and how to prepare your organization to be more resilient in the face of future changes in the operational landscape.
In January 2024, I posted a Medium article with my thoughts on the trends in strategic planning we expect to see this year and how they differ from those of the previous decade. Below, you will find a more detailed analysis of the trends, focusing on both:
- Trends in strategic planning as a discipline
- Trends in the application areas of strategic planning
I plan to update this trend analysis annually, adding some minor insights monthly.
Trend 1: AI. Governance for AI; Exploring Applications in Strategic Planning
In the Medium article, the title for this section was “GenAI Won’t Replace Strategists.” This remains relevant, as AI is still in the early stages of development and is far from being able to manage the complexity of the real world.
We are seeing an increase in practical applications of AI in strategic planning:
- AI in scenario planning
- AI for validating existing controls against new regulations
- AI for generating a draft strategy and conducting analysis of existing strategy
With significant investments in AI, we can expect to see more advancements soon, including in applications for strategic planning.
In the enterprise world, one of the main concerns remains the loss of control over data once it is passed to external AI. In response to this risk, we will see more AI models deployed and trained on-premises, isolated from the external environment.
The two key focuses in strategic planning now are:
- AI governance, particularly in relation to compliance and risk management
- Preparing strategic planning for a more active use of AI in the future
Trend 2: GRC. More Internal Controls; Focus on Stakeholder and Risk Management
GRC is a rebranding of established concepts in performance management, governance, risk management, and regulatory compliance.
With the increasing number of regulations, this trend is gaining momentum. Just look at the number of conferences held on GRC and RegTech globally to see what I mean.
One of the driving forces behind GRC is the introduction of new regulations, such as the latest sustainability reporting. While each new regulation adds a layer of complexity to regulatory environment, there are some shared requirements that I believe will shape the GRC trend:
- The requirements for more transparent stakeholder management and strategy planning in general
- The requirements for a better risk management
- The requirement for alignment between the subject of regulation and other parts of strategy
Trend 3. Effects of Climate Change on Supply Chain and Business Continuity
My initial prediction about supply chain and business continuity was related to extreme weather events, which still holds true. Just to mention a few recent headlines:
- Heatwaves in India
- Extreme floods in Brazil, UAE, and South China
In some cases, climate change affects only specific industries; for example, the increasing number of severe turbulence impacts the aviation industry. In other cases, it can lead to temporary disruptions in entire regions, such as when extreme floods affect a hub like Dubai.
The main implication for strategic planning is:
- Revising the impact and probability of such events and adjusting business continuity plans accordingly.
Not all organizations may have the budget to tackle this problem fundamentally, as the UAE government did with their flood defense plan, but more serious scenario planning could help reduce potential damage.
Trend 4: Cybersecurity. Vendor Risk Management
At the beginning of 2024, I predicted that cybersecurity would become a major trend. This opinion was somewhat biased, as I was preparing for my talk on “Change Management in Cybersecurity.”
Among the cases I reviewed were the supply chain vulnerabilities:
- The SolarWinds 2020 case (called “the biggest cybersecurity breach of the 21st century” before the CrowdStrike outage in July 2024)
- A backdoor in the xz Project affecting SSHD (which could have become a huge issue if it hadn’t been detected accidentally in the early stages)
With more breaches occurring in 2024, the cybersecurity trend is expected to strengthen.
How does this affect strategic planning?
- We will see even more internal controls dedicated to cybersecurity.
- There will be a greater focus on vendor risk management (we saw a spike right after the CrowdStrike incident).
- We will see more active use of cybersecurity scorecards and deeper alignment with strategy.
Trend 5. Strategic Alignment. Demonstrating the Relationship Between Strategies
In practice, strategic alignment is about connecting a strategy with the strategies of others or with one’s own sub-strategies.
From the vendor perspective, we hear from customers that they “need to show how their strategy supports an overall strategy” or “show how their strategy aligns with the strategies of partners, investors, etc.”
- In general, this interest is reflected in alignment with Sustainable Development Goals 2030.
- It is more specific in domains that involve deep relationships with a wider range of stakeholders, such as nonprofits, startups, and educational organizations.
- In the enterprise segment, we observe increasing interest in strategic or consultative sales, with in-depth strategy analysis and alignment at their core.
Trend 6. Strategy Automation. Transparency in AI Practices; Consultancy from Vendors
Finally, let’s review the changes in the domain of strategy automation, which is our core expertise.
On the marketing level, we see vendors of goal tracking tools trying to position themselves within the strategic planning domain. This is somewhat confusing for end users, as goal tracking software is more suitable for a stable project management environment rather than for dealing with validating hypotheses within strategic planning.
On the technical level, what we see in the RFPs is that the requirements for traditional strategic planning or Balanced Scorecard software have evolved. Here are the trends we observe now and expect to continue through 2025.
Projection of AI trend:
- The requirement for AI in software, primarily for horizon scanning and trend analysis.
- Requirements for greater transparency regarding how the software uses AI (if not 100% transparent, it will be a red flag during vendor validation).
- Software vendors will need to adapt their platforms to connect to multiple AI models. For example, one model could be a public one, like ChatGPT, used for scanning the external environment, while another could be a proprietary model trained for handling more sensitive data.
The role of software vendors is changing:
- The need for implementation consulting is rising. We started seeing this trend back in 2023, with more clients asking not just for software, but also for managerial experience in deploying and scaling strategy.
The role of business frameworks is evolving:
- From “one framework for all challenges” to
- Using a “combination of frameworks.”
We consider this a positive signal, as the deployment of a complex strategy naturally requires various decomposition methods and, respectively, various frameworks.
- The K&N Balanced Scorecard, OKRs, and Hoshin Kanri are among the preferred frameworks for strategy execution.
- PESTEL and SWOT are leading tools for strategic analysis.
Deglobalization trend:
- We see an increasing interest in deploying our platform on private cloud solutions. This trend appears to be driven by the reassessment of supply chain and cybersecurity risks, along with regulatory requirements for data localization.
Finally, following the GRC trend, we observe a growing interest in functionality related to:
- Internal controls
- Stakeholder management
- Strategy cascading
- Ownership and accountability
Feel free to share your thoughts on the trends in strategic planning in your industry in the comments below. If you want to understand how these trends affect strategic planning in your organization, consider conducting a strategy audit.
Alexis is a Senior Strategy Consultant and CEO at BSC Designer, with over 20 years of experience in strategic planning. Alexis developed the “5 Step Strategy Implementation System” that helps companies with the practical implementation of their strategies. He is a regular speaker at industry conferences and has published over 100 articles on strategy and performance management, including the book “10 Step KPI System”. His work is frequently cited in academic research.
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