– Thoughts on Strategy and Management

Strategic Planning Meetings

Strategic planning meetings are a very controversial thing. They have a bit of a reputation to be just another fancy management trend. I have to admit that I, too, have my doubts if all of these meetings are worth the efforts. My experience tells me that there is much truth in Brian Quinn’s famous quote:

“A good deal of corporate planning … is like a ritual rain dance. It has no effect on the weather that follows, but those who engage in it think it does. … Moreover, much of the advice related to corporate planning is directed at improving the dancing, not the weather.”

However, despite all problems, pitfalls and disappointing results, I am convinced that these meetings do have a value. Even if they won’t lead to a groundbreaking new strategy, such meetings can do some good for the company:

  • For many businesses, a formal strategic planning meeting forces upper and middle management to systematically think and talk about strategic issues for the first time.
  • If halfway properly planned, the preparation for this meeting encourages middle managers to put away their daily business for some quite hours and to think about the bigger picture. How many of them are so busy with their day-to-day workload that they hardly take the time to think about the long-term prospects of their field of responsibility in the larger context – even if they would like to do that.
  • The meeting normally brings together the whole top management team and more or less members of the middle management. This might be an excellent opportunity to bring some ideas or problems to the attention of the whole management team and even to get some immediate attention, discussion and response.
  • I once met a CEO who deliberately used the annual strategy meetings to do some sort of evaluation of his middle managers. He could see them all in a very similar situation and thus could easily compare how seriously they take this, what strategic capabilities they have, how good they are at recognising and solving problems …

So why are so many people disappointed with strategic planning meetings? I can think of a lot of problems – some of them can be solved / reduced and some not. So I will just limit myself to some issues I have experienced myself.

First, you need a critical mass of people involved with at least a basic understanding of strategy and strategic thinking. It is unrealistic to expect that the whole management team consists of experienced strategists. However, some of them (preferably the more senior ones) should have a clear idea about what is subject of a strategy meeting and what not and about how these issues should be addressed. Otherwise you risk to end up with a discussion about almost anything widely related with the future of the company, but not necessarily of strategic importance.

It is no rocket-science: good preparation is key. I have made the experience that it is more than recommended to talk to the top management about their expectations at first. Good communication is important too. It is essential that everybody involved knows the overall picture and how he fits into it, what he is supposed to do and by when he is supposed to do it. To point is to make busy managers to buy into something that takes away their time from their other duties and that potentially leads them onto unfamiliar of even threatening grounds. This is a very important part of the preparation. I found it beneficial to offer the managers that were asked to do advance preparations (almost) any help they might need in a very informal way. Typical obstacles where a little help can make a big difference are

  • to be available for questions (‘What do you actually mean by …?’)
  • to sort out the interfaces with other departments (e.g. to check with controlling which figures to use)
  • to be available as some sort of sparring partner and plausibility check

I prefer some consistency in the way strategic analyses are done and strategies are presented – both over time and across the organisation (i.e. across all business units, region or whatever planning units there are). This helps to achieve a certain level of quality and makes results more comparable. The downside is, however, that this sort of consistency tends to even out the differences between the several business units. The more diverse your organisation is, the more resistance you will meet with a standardized strategy presentation of the one-size-fits-all type. There is no one right answer to this issue. The solution depends on the type of the organization and top management’s expectations. In any case, it is helpful to think about this question in advance.

This leads to the question of complexity. In large and complex organizations it is important to determine the level at which you want to discuss strategy. If a large organization really intends to discuss strategy at the level of each product line, it may easily end up with a whole week of strategy meeting. The preparation of a complete set of files for all participants alone can become a major challenge in such cases.

Last but not least – routine. The problem of routine brings us back to the above quote which compares strategy meetings with rain dances. I almost never experienced such a rain dance- attitude in first-time strategy meetings. The problem arises if companies exercise one and the same type of meeting year after year. After a few years, everybody knows what he is expected to do and everybody has learned how to prepare a presentations that meets the CEOs likings and avoids critical questions. Moreover, it is complete nonsense to expect groundbreaking new strategic ideas every year. In the end, a strategy should be a bit more long-term. A company I worked with solved this problem by shifting focus every year. One year they focused, for instance, on their options to improve their position in Asia, and next year they focused on technology.

To be continued with some thoughts about what happens after the strategy meeting.

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  2. I agree very much with your overall assessment that many strategic planning meetings are less than satisfactory.

    I do believe, however, that both Michael Porter’s corporate planning methodology and his five forces industry analysis methodology are amazingly suitable for any type of industry. They provide the right process and level for planning, although everyone needs to be clear about the differences among corporate planning, group planning, business unit planning (including product planning) and cost center planning (also called departmental planning).

    In the past, it had also been hard for corporate and business unit planners because of a lack of vendor-provided information at the Porter level.

    Now that companies can access objective industry information at the correct (Porter) level for line-of-business analyses, strategic planning in practice should become much more productive at every level.

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