Strategic Planning is Dead

A simple Internet search will produce dozens of comments bashing strategic planning. Some claim that the gold-plated fad of the 1980s and 1990s is severely tarnished; the offsite conferences have become more of an expensive social event than a strategy session. Others suggest that most strategic plans are at the bottoms of desk drawers, evidence of time wasted. Yet there is considerable information that strongly supports one of the most widely utilized management concepts of recent history.

Part of the controversy has to do with semantics. Strategic and planning are alleged to be in conflict; the former implies thinking out of the box, while the latter suggests simply continuing in the direction indicated by recent trends. Since planning is easier to accomplish with far less risk, it has supposedly become the main strategic activity in most companies. Others say true planning is not meant to occur during a strategic planning process, thus strategic planning is misleading and should be replaced by strategic thinking.

Unfortunately the ongoing debate masks the real issue. Current economic conditions are dramatically different compared to the 1980s. The impact of technology on communication and competitiveness has significantly increased the daily pace of business operations. Major decisions must be made quickly with considerable emphasis on risk mitigation. It is questionable that the traditional annual planning retreat, even with reasonable follow up, can effectively comprehend those characteristics of today’s rapidly changing business environment.

The basic concept of strategic planning is as important as it ever was, maybe more important. But the process must be modified to accommodate a significantly different business climate. The fundamental need is for a planning capability that supports effective real time decision-making. An annual retreat marking the starting point of a practice that takes a year to mature will no longer adequately prepare a business to quickly capitalize on lucrative opportunities. Perhaps strategic urgency is a more appropriate expression.

Creating and maintaining a competitive decision making advantage means reducing planning cycle times and encouraging company-wide participation in the collection and exchange of relevant information. Businesses of any size can become more competitively nimble by performing the following steps:

  • Develop an information system that allows real time company-wide updating and what-if analysis by managers, teams and individuals.
  • Implement a training and development program that results in effective and productive maintenance and usage of the information system.
  • Revise company policy and the performance management system to focus attention on accurate and timely decision-making.
Modifying the original strategic planning process requires a fairly major cultural change. The transformation will take time, but survival is a powerful incentive. A rapid and controlled response to change is the objective, with the annual retreat becoming a progress review instead of a process initialization. Strategic planning is definitely alive and certainly necessary; it merely needs to be adjusted to fit current business conditions.

- Russ Simpson, Highland Community College
   SBDC Counselor
   Instructor, ICPM Program
   Small Business & Management Consultant

Sources:

“Enterprise Planning: Linking Strategies, Plans and Resources for Competitive Advantage.” Hyperion. 2005. 6 July 2006. www.hyperion.com

O’Neal, D. (2003). Managing Strategically For Superior Performance. Massachusetts: American Press


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The Institute of Certified Professional Managers Program is a professional, comprehensive training program that develops and enhances management skills. Existing managers and supervisors as well as those new to management will benefit from the case studies and skills developed during the program.

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7:00 a.m.-9:00 a.m. or 4:30 p.m.-6:30 p.m.


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AUGUST 2006