It may sound controversial, but I think strategic planning is overrated.
Most businesses will have a long-term strategic plan in place. The timescales can vary but typically they can be anything up to 10 years. In my experience, around 5 years seems to be the most common timeframe. It has been a staple of business management thinking for decades, such that it is barely questioned. For without a strategic plan in place, how on earth do we know our direction of travel and what the destination looks like?
The conventional wisdom behind strategic planning is logical, having a long-term strategic plan means we have a clear sense of our goals and where we are heading as an organisation.
It provides a roadmap for people in the organisation to follow so that they align their behaviours and energies behind the priorities determined in the strategic plan. It allows us to hold people accountable by implementing a range of metrics and KPIs to ensure that the priorities in the strategic plan are adhered to.
That all sounds fine in principle. However, the reality for anyone who has been responsible for executing strategic plans can be different. Why would this be and what are the underlying factors at play? Here are my main concerns regarding the value of strategic planning
- None of us can predict the future. To suggest that we can project the ideal future state of an organisation in 5, or 10 years’ time is sheer folly. In a highly disrupted and unpredictable world, mapping out priorities and goals over such a lengthy timescale risks limiting adaptability and flexibility to meet changing circumstances. It would be difficult to argue that any of us can plan beyond the next six months if we’re being realistic.
- Organisations do not follow linear pathways from A – B. There are too many variables and complexities in place regarding structure and culture which are often ignored when devising strategic plans. The plans themselves are often predicated on compliance and come with mechanisms to ensure that compliance through metrics and objectives cascaded through the levels in the organisation by line managers. However, we know that organisations are made up of people and relationships. They can be messy. Rather than a straightforward sequential step from A – B the pathway often diverts via other destinations due to people’s interpretation of the plan itself. Strategic plans often lack an appreciation of people’s behavioural patterns and their level of connection with the organisation and what it is trying to achieve.
- Strategic plans are often prepared by the C Suite, then cascaded for implementation. The planning process can be very costly when calculating the senior manager time. Often consultants are also engaged to help shape and define strategic plans. Many strategic plans I have seen have been well-intentioned, but then ‘complexity creep’ occurs and what started out as a simple concept with simple deliverables becomes overcomplicated. Moreover, often the very people responsible for implementation of the strategic plan objectives can not state confidently what those strategic plan objectives are. These objectives are not lived and breathed continuously as part of normal conversations. This means people are not connected to an overarching sense of purpose which they can both understand and recognise their own role in making it happen
- Organisations can feel compelled to follow the plan, even when circumstances change. This if often linked to executive remuneration systems that are premised on achieving the plan’s objectives. Our world is incredibly fast-changing, our internal systems need to be nimble enough the change and adapt with them. Yet often cumbersome performance management and remuneration systems in larger organisations make this extremely difficult.
- Strategic plans are most often formulated at the C Suite level. It presumes these are the people that know best. This is a risky assumption to make, and there remains a level of overconfidence in many organisations that positional power at the executive level equals better decision making. This is not necessarily the case. Despite efforts to diversify, many C Suites remain underrepresented when it comes to certain minority groups. Too many C Suites remain predominantly male. This limits the cognitive and diverse thinking that can enrich approaches to organisational challenges and priorities. Strategic plans can end up being developed within an ‘echo chamber’ where they are not scrutinised and challenged in a constructive way. Plans formulated by C Suites who are not diverse and inclusive can mean important assumptions and factors are overlooked, which weakens the whole plan going forward
- Strategic plans are often prepared and developed in the complete absence of those who are responsible for executing the plan. From the outset, this means that commitment and buy-in from the very people responsible for the plan is going to be difficult. It represents a classic of ‘top-down’ decision making. The strategic plan is worked on, considered, drafted, possibly consulted [although in my experience this is often a validation of what the plan is rather than genuine consultation which challenges and critiques what has been produced] and then rolled out. We have avoided listening to the views of the people who are going to be tasked with delivery. It is cascaded as something that is being ‘done’ to people in the organisation rather than ‘with’ people. The hard work of building trust and understanding has not happened, and yet the expectation will be that people in the organisation take full ownership for doing their part to deliver the strategic plan’s targets and objectives once it is rolled out.
I see these common issues occurring in many of the strategic planning documents I have encountered. An element of perspective is required here. I am certainly not suggesting organisations and leaders stop scanning the horizon and planning for the future. What I am questioning is the mechanism and method of doing this via a traditional strategic planning approach.
So, what is a better approach?
There are many different approaches to strategic planning. The best option always needs to be context-specific. You cannot pull off a strategic planning framework ‘off the shelf’ or follow a strategic planning model and always expect it to work.
I believe in doing the simple things consistently well in organisations. This all starts with listening. Listening helps us to understand context. Context is key. By inculcating a culture of listening in an organisation new insights and priorities naturally emerge. We need to develop the systems and trust for this to happen and for people to be trusted to do the right thing for the customer and organisation. It starts with leaders modelling this behaviour consistently themselves. Rather than spending significant amounts of money developing elaborate strategic planning frameworks and documentation, a period of deep listening to all people and stakeholders impacted by the organisation will be far more effective.
The deep and attentive listening needs to lead to something tangible, however. A fundamental question is whether managers have the skills to do this effectively? When listening openly and deeply a wide variety of feedback will be returned, some of which may feel uncomfortable and at worst hurtful to those running the organisation. Such a process needs to be handled honestly, and with sensitivity and care. If the approach does not mobilise action in the right areas for the right reasons it will be meaningless.
There are huge benefits to be realised from such an approach. The mere act of genuinely listening and valuing people’s perspectives is hugely positive. It builds the foundation for trust and co-operation which will be needed in terms of delivery of outcomes. It builds connection between people and between teams. It means people feel a sense of connection to the plan they are expected to deliver. Managers need to be prepared to go the extra mile to do this and be equipped with the skills to handle objectively and dispassionately the range of feedback that will be expressed.
The next article will explore what we can do with the feedback collated from the listening that has taken place. What do we do with this deeper understanding of context? Our next article will explore a more human-centred and participative approach to strategic planning, the foundation for which a different mindset is developed, which we call ‘Listening Plus’.
There is Strategic Thinking and a strategic plan.
It makes for “due diligence” to do a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis with regular intervals. That would pick up the changing environment, technology, and new players in the market – but not necessarily come to the correct conclusions as to the size of the threats or potentials. That is where the “what if” scenarios can tell us the enormity of what would happen if the threat scenario is to take place vs the best outcomes, if the opportunity scenario is acted upon.
You are spot on, Kevin, observing that the management may have too much of a vested interest in outcomes that are not necessarily the most likely. Kodak famously ignored the threat from digital photography because they were so heavily invested in producing film and the rest of the existing ecosystem.
When we ignore a threat, we can’t make contingency plans. One approach I heard mentioned was “When 10 years from now our company has gone bankrupt, what were the events leading to that outcome?” Once the scenario is set up, it is so much easier to see the vulnerabilities than if we have to penetrate the mental shield that assumes that “naturally we will still be around in 10 years.”
Excellent article Kevin. I grew up in the era of the 10 year plan in the high tech world. Never made sense to me since technology changed so fast. I always found it better to create a collaborate culture based on trust, respect and deep listening which attracts high performers and leads to innovation. If we kept the core values of the culture in place, it enabled us to quickly make adjustment to our strategy and tactics rather than trying to follow and justify and outdated plan.
Thank you for proposing this interesting and very timely topic. Just as I agree with the approach you propose. The involvement of the ideas of the operational base is fundamental, but a culture of the company management in this sense is also crucial to give substance to the involvement and achieve the benefits that you describe in detail.
History has shown us that the business world is not monolithic and imperturbable. In fact, everything has changed. Today things are different from a few years ago. It is certainly important to establish business objectives, but it is essential for a company to be able to react quickly to market changes.
In the past, the strategy was handled by a team close to the management or even by the entrepreneur and his most trusted collaborators. Closed-door meetings and secrecy were the basic rules during the analysis, planning and scheduling phases. Once the company strategy was defined, it was communicated to the network and to the employees, dictating the rules to them and making them see the future objectives to be achieved.
Today this methodology is outdated.
We are in the era of sharing, of speed, of information that travels freely. Leaders now need to engage employees and ensure that business strategies are shared. The co-creation of strategic planning immediately motivates all collaborators and makes them responsible.
Today it is essential to find forms of involvement, mobilization and collaboration with people, what I call the company “community”, to identify and share those objectives and actions in which the strategic sense is expressed of corporate action.