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How will robo advice enhance strategic planning?

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Strategic Planning has evolved as a practice over many decades since its origins in the 1960s. Adaptations over time have kept it relevant and many organisations undertake it as a process because they see the benefits it brings. These include a consistency of strategy and approach over different time horizons, the identification and management of risks, as well as the focus on objective setting. It now stands poised to adapt to the advances brought about by the digital era.

Despite the benefits, Strategic Planning today remains a time-consuming process for organisations to follow and is often supported by external strategic consultants. Consultants are usually the ones who have the time to collate the necessary inputs, both external and internal and sift them into the format needed for management to then work (or be guided) through the process.

The downsides of employing external consultants

There are downsides to employing external consultants in terms of cost, time and disruption. Cost is driven to a large extent by the size of the consultant team needed to assimilate the necessary inputs and the time then taken by this team to get to their reports. There will be juniors employed to scan the market, collate internal and external performance metrics and interview employees to identify the organisation’s strengths and weaknesses. This process will take many weeks, even months. Once complete, more experienced consultants are then paid to work through the results with management teams and bring the strategic plan together.

The internal disruption caused by the strategic planning process should not be underestimated either. No matter how positive the senior management are or how engaging the consultants, there is always a tension when consultants are in the building. They are often set up in offices away from employees with their plans and charts on the walls. Tension is especially evident if they are conducting internal interviews. Which employees are asked to be involved, why them, what should people say in response?

Enter Robotic Process Automation

Enter the Digital Era, poised to cause disruption to many existing markets and processes. Gartner predicts that we are at the beginning of a 75-year technology cycle while a Harvard Business Review (HBR) article sets out that ‘Knowingly or not, corporate leaders are on the cusp of major disruption in their sources of advice and information’.

Key elements of this disruption are the emergence of more widely available technologies to support Robotic Process Automation, Robo Advice and Artificial Intelligence (AI). There are several factors coming together that will hurry this automation of business advice with undoubted knock on effects for Strategic Planning. In a second HBR article, the increase in available data is held up as a key determiner.

The explosion of corporate data

There is an explosion in the amount of corporate data. In fact, it is doubling every 14 months and it will reach 10.5 ZB by 2020. This data is both financial (revenues, profits, growth) and non-financial (customer sentiment, employee engagement, marketing effectiveness, product feedback, and partner ecosystems). The availability of this data creates fertile ground for robots to provide algorithmic insights and recommendations that deliver highly predictive, error-proof, and low-cost advising.

In addition, we see the drive to use AI coming from major companies. Internally, many businesses are already investing in AI and those at the forefront of AI, such as Google and Microsoft are both investors and operators, investing $billions annually.

Investment in Automation and Robo Advice

The venture capital market recognises the value of investing in automation too. According to research from KPMG in January 2018, venture capital investment hit a decade high in 2017 at $155bn of which investment in artificial intelligence and machine learning increased from $6bn in 2016 to over $12bn a year later – a 100% increase.

Within the Strategic Planning process, there will be clear ways to cut the time, cost and disruption of existing processes using automation, advanced analytics and Robo Advice. Organisations are already seeking to cut the effort involved in collating disparate internal performance data sources and realise the benefits that automated cross-analysis will bring. These include a higher level of detail and insight achievable, increased speed and reduced human bias.

Clients are also likely to demand that consultancies put their energies into developing automated ways to scan their external markets. If they themselves have invested in automating their internal sources of data, they will be less inclined to pay for teams of consultants to manually scan their competitive landscapes.

How companies will benefit from Robo Advice

This leaves the internal qualitative input into Strategic Planning around an organisation’s strengths, weaknesses and ability to deliver change. How will companies benefit from advances in automation and Robo Advice in this area, such as are being seen for more tangible quantitative performance metrics? And how will the resulting insight be used within the Strategic Planning Process?

Robo Advice about an organisation’s internal culture, alignment, performance capability and readiness to deliver change could influence four key stages of the Strategic Planning process:

1. During the initial inputs-gathering phase when the internal review is carried out of strengths and weaknesses

2. As a sense-check that any proposed strategy is deliverable within the existing organisation, or to identify what interventions would be needed within the internal culture and performance to deliver it.

3. If acquisition activity is planned, it can also assess the potential for the existing organisation to cope with taking on new initiatives. More generally, Robo Advice can also assess the viability of any possible acquisition or merger and the culture of the target organisation.

4. As part of a balanced scorecard to monitor that interventions put in place to deliver the strategy are on track, helping enable the organisation deliver against its vision statement and objectives

Investing in your Organisational Health

Investing energy in this side of Strategic Planning isn’t just a nice to do. Consultants McKinsey say focusing on Organisational Health (OH) demonstrably brings performance advantage. They have been benchmarking companies in this area for 10 years and in a recent publication they set out that the central idea underlying their organisational work has been that the best way to run a business is to balance short-term performance and long-term health.

They now see new, longitudinal evidence that redoubles their conviction that companies that work on their health, not only achieve measurable improvements in their organisational well-being but demonstrate tangible performance gains in as little as 6 to 12 months. This holds true for companies across sectors and regions, as well as in contexts ranging from turnarounds to good-to-great initiatives.

Let the robots do the heavy lifting

For companies involved in Strategic Planning that accept McKinsey’s study and advice, robots are already poised to replace consultants in doing the heavy lifting of almost all data collection and analysis in the field of OH. Advances in understanding how the brain makes sense of data and applying this understanding to software models, means that Robo Advice can already enhance the Strategic Planning process.

On top of the ultimate goal of enhancing performance, on the way towards it and specifically during Strategic Planning activities, Robo Advice will ensure quicker, neutral inputs with higher accuracy, lower levels of disruption and all at a far lower cost to deliver than today’s consultant teams. The robots aren’t on their way – they’re already here…

Footdown is the first Robo Adviser for rapid, non-disruptive organisational health analysis, insight and action planning. Contact us today on 01225 465 640

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