I recently read an article by Roger Martin titled “The Big Lie of Strategic Planning” in January/February 2014 issue of HBR. It really got me thinking about the state of strategic planning and why some companies seem to believe strategic planning is a waste of time.
Having gone through many strategy sessions (with great results) in my career, as well as speaking to many CEO’s about their strategy planning, it really got me thinking as to why strategic planning these days often comes up short of expectations. And why some CEO’s believe that strategic planning is irrelevant and a relic of the post-World War II era. Is it because we now live in a fast and furious environment where planning for the future is simply not possible?
Is Strategic Planning a Relic of the Industrial Age?
The answer is unequivocally no! The reason it may seem irrelevant to many CEO’s and senior leaders is that they are confusing strategic “thinking” with planning – they are not the same, though both are required in executing a mission.
Yet most strategy making (the process of creating a winning and executable strategy) ends up being nothing much more than a yearly operational and budget plan. As a result, companies end up with good incremental operational plans. Safe, predictable and frankly not inspiring enough to get the team motivated to do great things.
Fear and discomfort are an essential part of strategy making
The fact of the matter is, when it comes to creating a bold strategy, you need to be uncomfortable and apprehensive. If your are entirely comfortable with your strategy, there’s a strong chance it isn’t very good – it won’t help much in shaping a viable future worth fighting for.
Roger Martin put it this way when it comes to creating strategy: “You need to be uncomfortable and apprehensive [with your strategy]: True strategy is about placing bets and making hard choices. The objective is not to eliminate risk but increase the odds of success.”
Martin goes on to say that in an effort to reduce the uncertainty associated with strategy, managers spend countless hours on creating detailed plans that project revenue into the future. While these plans may make managers feel good, more often than not they matter little to performance.
Instead of the old detailed plans with detailed numbers, Martin suggest a simple “rough-and-ready” process of thinking through “what it would take to achieve what you want and then assessing whether it’s realistic to try.” Martin goes on to say if executives adopt this strategy process, they can keep strategy where it should be: outside the comfort zone.
Strategic planning isn’t strategic thinking
Martin acknowledges much of his thinking on strategy is influenced by the work of Henry Mintzberg. In his seminal article on strategy – “The Fall and Rise of Strategic Planning” HBR January-February 1994 – Mintzberg makes a clear distinction between strategy making and planning …
“Strategic planning isn’t strategic thinking. One is analysis, and the other is synthesis.”
According to Mintzberg
“… Planning has always been about analysis – about breaking down a goal or set of intentions into steps, formalizing those steps so that they can be implemented almost automatically, and articulating the anticipated consequences or results of each step…”
“Strategic thinking, in contrast, is about synthesis. It involves intuition and creativity. The outcome of strategic thinking is an integrated perspective of the enterprise, a not-too-precisely articulated vision of direction …”
Think about strategy from an innovator’s perspective
As I read through both Martin’s article and Mintzberg’s article published 20 years earlier, it became very clear to me that strategy is about being innovative – thinking about the future in creative new ways and acting on the insights discovered in the strategy making process. In essence, we can say the process of innovating and thinking strategically are the same.
Mintzberg goes on to say:
“…. strategies often cannot be developed on schedule and immaculately conceived. They must be free to appear at any time and at any place in the organization, typically through messy processes of informal learning that must necessarily be carried out by people at various levels who are deeply involved with the specific issues at hand.”
Just like the innovation process, strategy “…. is a messy process of informal learning.” (That does not imply there is no structure by the way.) And that learning has to be carried out by people who are close to the action – for example designers who are trying to help people get important jobs done faster, better and cheaper.
Thinking strategically leads to novel and bold strategies
Perhaps it’s time to drop the word “planning” from “strategic planning” process and replace it with “strategy making” or perhaps “strategy trekking” to uncouple the two very distinct activities of thinking strategically and execution planning.
Just like innovation, strategy making needs to function beyond the boxes, to encourage the informal learning that produces new perspectives and new combinations. And given viable strategies (a.k.a. business and new product concepts), planning is used to make these concepts operational.
If you want to innovate your way into a desirable future where you can successfully compete and win, then it’s time to think strategically about what that future looks like and how you will create it. And then put your plans and executions systems together and just do it!
Be bold – think strategically!