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The idea of strategy formulation has become fatally entangled with the process of formal planning. This is where we get the term "strategic planning". Of course, there are alternatives to this heavily formalized approach toward strategic pursuits. (Adhocracy) The irony here is that it is precisely the formalized aspect of the process, which often kills the effectiveness of our business strategies. Strategic planning is supposed to be the choice of an integrated course of action at some time in advance of that action. This requires nothing less than clairvoyance. |
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While no planner will tell you that they can foresee tomorrow, putting a plan on a piece of paper, and then saying that it is an important document for the future is the same thing. The intricate dynamics of complex, non-linear systems are beyond our ability to effectively plan for them. That is life. To engage in formalized planning about the future is to deny this fact of life. |
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There are many in business who would disagree with this point of view. They do so simply because they feel that their planning procedures have helped them. But of course, they can feel this way, because they are still in business. Those who have had somewhat less success always have good explanations for what went wrong, and it usually pertains to something that they could not or did not plan for. They blame the factor that was not in their plans, rather than the planning process itself. That is why this myth still persists today. |
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Consider for a moment what a good strategic planning process is supposed to be like. The first step is to gather data. The second step is to determine what the data are saying. The third step is to draw out conclusions based on the data. The fourth step is to apply these conclusions to the strategic context of the organization. The fifth step is to develop an integrated course of action (a plan) that seeks to maximize opportunities and minimize threats, within this strategic context. |
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Sounds good. But there are problems at every step. First, you cannot gather all the data, not unless you have spies in every corner of the world. Second, even if you could gather all the data, different people would disagree about their meaning. Which brings us to the third problem – we would all come to different conclusions about the data. Fourth, given our different understandings about the data and the conclusions, we would also have different understandings about the strategic context of the organization. All of this renders our "integrated course of action" meaningless and worthless. Not to mention that this activity is very costly in terms of time, money, brain power and other resources. |
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Making matters worse, most people in the organizations that buy into this myth are entirely left out of the planning process. As a result, commitment for the plans when they are handed down is low. In fact, some people in the lower ranks actually take a perverse pleasure when the plans hatched by top management fail. They get to say; "I knew better than that." Because even the most insightful plans are heavily dependent on the commitment of people to implement them, the formalized strategic planning model is woefully inadequate. |
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On top of all of this, we must remember that our customers could not care less about our plans. All they care about is results. For most companies, formalized strategic planning is a very complicated chore. This can easily distract managerial attention away from delivering the results that customers deserve and expect. |
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Planning then, is non value-adding work (read overhead), that when complete, is far more effective at alienating the vast majority of people in your organization, than it is at developing a "recipe for success". |
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Of course, formalized strategic planning is not the only way for companies to clarify their strategic imperatives. |
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