– Thoughts on Strategy and Management

“De-Stranding” the Strategic Planning Process

I borrowed this headline from the A.T. Kearney article I will write about. This is an article of the kind I like. You may have noticed that I am really fond of strategic planning. All the more I regret that the strategic planning process so often does not deliver the expected results and, hence, seems to have a poor reputation. This article addresses exactly that issue.

The article starts with a summary, why good strategic planning is extremely important today. This part is not overly exciting to me, since it is common sense nowadays, that our business environment has become more volatile and unpredictable than ever. Accordingly it requires improved and adapted strategic planning processes that are capable to deliver meaningful results in this situation. However, I like the wording that probably tries to create a sense of urgency: ‘The idea of negotiating unarmed the oncoming period of disruptive and potentially discontinuous political, social, economic, and commercial change is simply unthinkable.’

After that the authors describe what they call ‘stranded strategies’: ‘strategic planning all too often becomes an occasional function rather than an integral exercise.

Over the years, we have seen it time and again: At some quiet part of the planning cycle, a firm elects to hold an offsite meeting of its senior leaders so they can agree on a common vision for the future, along with policies to achieve that vision. The result, more often than not, is what we characterize as a stranded strategy—the development of a number of shorter-term business ideas (often more tactical than strategic) that by their very nature are highly perishable and that soon become subordinated to the relentless day-to-day rigors of business operations.’

I can completely agree to this statement. I have made the same observation: A company calls a big strategic planning meeting or workshop and all senior managers are asked to propose a strategy for their area of responsibility. So they feel forced to come up with a strategy, which is ideally new, although they don’t have much experience in strategic planning and don’t have much time for this besides their day-to-day business. So they come up with all sorts of things that may or may not be a strategy – often not much more than plans for new marketing activities or investments.

As a conclusion, the authors present seven ways to improve the strategic planning process, which I briefly repeat here:

  1. Systematically look at various drivers for change, their interrelations and implications
  2. Stress-test your current strategic understanding with these drivers for change
  3. Reassess prevailing assumptions, continually
  4. In your monitoring and analysis, look beyond your well-known ruts
  5. Develop a set of early warning signals (Well, this advice really is not new. We were already trying to develop a set of early indicators when I was working for a major automotive supplier ten years ago.)
  6. Institutionalize, enliven, and integrate the planning process
  7. Invest in the process. You get what you pay for (An advice I completely agree with. It seems like common sense and may companies may have made a different experience. If you take the issue seriously and are willing to invest what it takes, your chances for useful outcomes dramatically increase. However, don’t make the mistake to expect a linear relationship be-tween input in terms of time and manpower and output. It is always possible to spend a lot of time doing the wrong things wrongly.)

So all in all, this article is not rocket-science. It is, however, an interesting piece of reading if you are looking for some fresh brain-food on strategic planning. It gave me a nice impetus think deeper about some of it’s statements – so you can expect another blog post here soon.