In a recent discussion one of my favorite CEOs of a non-profit service provider organization made an interesting and somewhat off-base comment. He said that he still “did” strategic planning but that it had “fallen out of favor” among his non-profit CEO colleagues. When I asked why, he said they thought the market was just too volatile to successfully create strategy, and they were “responding to opportunities” instead.
The statement gave me a start. Is strategic planning passé? I view the business world as two phases – planning and execution. I view the strategic plan as the shared vision document for boards, managers, and staff – and the basis for making investments, making acquisitions, and setting a course. But, perhaps the market has shifted.
So, I did some research and sought out the arguments for bypassing strategic planning. The best, a 1994 Harvard Business Review article, The Fall and Rise of Strategic Planning, said:
…strategic planning has long since fallen from its pedestal. But even now, few people fully understand the reason: strategic planning is not strategic thinking. Indeed, strategic planning often spoils strategic thinking, causing managers to confuse real vision with the manipulation of numbers.
I do agree with the authors that executives can’t let the process of strategic planning (the meetings, the market research, the document) interfere with an adaptable strategy. And, the more turbulent the market, the more “adaptable” your strategies need to be (see Get Ready For The New Normal all members). This was quite aptly stated by Dana O’Donovan and Noah Rimland Flower in their Stanford Social Innovation Review article, The Strategic Plan is Dead. Long Live Strategy.:
…what is necessary today is a strategy that breaks free of static plans to be adaptive and directive, [one] that emphasizes learning and control, and that reclaims the value of strategic thinking for the world that now surrounds us. [Strategist Roger] Martin acknowledged this point at the Skoll World Forum in 2010 when he said: “Every model is wrong and every strategy is wrong. Strategy in a way helps you learn what is ‘righter’. People think you can prove a strategy in advance. You can’t.”
In the same way that a great strategy on paper is only as successful as its effective implementation, a great strategy is only as useful as its adaptability. As soon as strategic planning has become simply, “the plan”, it loses the necessary flexibility required to succeed in a complex, changing market.
I think a fluid market isn’t an excuse not to plan (and I think executives who equate responding to opportunity for strategy can make some very costly mistakes). Rather, a fluid market is a reason to plan even more. Or, to quote Winston Churchill, “Plans are of little importance, but planning is essential….”
For another free resource, see: The Evolution Of The Strategic Plan all members
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