The Wall Street Journal published an interesting article called, “Strategic Plans Lose Favor“. This article highlighted the fact that many companies are abandoning strategic planning in light of today’s rapidly-changing business climate and conditions. It goes on to say that companies are starting to value flexibility over strategic planning. Is this really the case? Is it wise to abandon strategic planning now?

Tracking the chatter on Twitter, most (myself included) focused on an Accenture manager comment that “strategy was dead”. If you read it yourself though, you can see that he actually says “strategy, as we know it, is dead”. What really caught my eye is that strategy was boiled down to “predicting the future”.

Is Strategy as Simple as Predicting the Future?

The short answer is no. Or at least, it shouldn’t be. Planning is partially pointing the ship in the right direction in response to industry trends and conditions, but its useless if there aren’t concrete steps to implement the strategic plan. I believe this is oftentimes where plans fall short, when upper management communicates (and translates) the messages they receive from executive management down to middle management, who then communicate and translate them further down the line, until the message gets too scrambled to understand (remember the game operator).

Quick, name me a single company that doesn’t use strategic planning and is successful

I don’t think its possible to be successful just by simply being flexible and responding to conditions as they arise. Companies in this cycle are simply playing an elaborate game of whack-a-mole, reacting to things that are happening to them. A person or company that is reactive, instead of proactive, loses out on a ton of opportunity. An easy example is the Apple iPad. Although people have been speculating that Apple would create a tablet computer next, Apple had the plan in the pipeline for a long time. Who else had something even close in terms of a tablet computer? Microsoft had their Windows tablet environment, but had all but abandoned it.

Look how quickly after the announcement Dell, Sony, and HP beat the drum on their rival offerings. Although some of these announcements came before the iPad, in light of Apple’s more clear timeline and specifications, the press will be framing these products as “reactions” or “answers” to Apple’s iPad. Now they get to define the market (blue ocean strategy), and set the rules of the game. Would Windows 7 be appropriate for these tablets, or should the tablet OS be revived?

Apple exists in a crowded and competitive marketplace, but still succeeds not only because they have an excellent strategic plan, but also because they have the ability to execute on these strategic plans. If they had simply reacted to marketplace conditions, HP/Sony/Dell would have taken their time on the tablet at introduced it at their leisure, now they are on their heels.

What Can We Do In Today’s Age?

No question, communications and collaboration technologies and other advancements have made it able to shorten go to market strategies, product development timelines, making it critical for companies to “think on their feet” and be flexible and reactive. However, getting rid of strategic planning is the wrong thing to do.

When I think of strategic planning, I think of my time spent at Kraft Food’s strategy department, helping them put together their strategic plan presentations, a collection of industry trends and predictions, and how they should react. These were annual things. Annual is no longer good enough. The Wall Street Journal article pointed to companies reviewing their budget monthly rather than annually, which is a step in the right direction. My other suggestions to improve strategic planning include:

• shortening the strategic planning “cycle” – reduce the steps needed to develop and implement a strategic plan. consider communicating it further down the line, rather than making management translate it
• allowing smaller circles farther down the ladder to develop their own plans – this is not only good practice, it can help underscore some of the challenges associated with strategic planning. Do all strategic plans have to come down from “on high”?
• go iterative – a strategic plan shouldn’t be a “3-year plan” in my opinion. Why can’t you make an open-ended plan, which you continue to work on an focus on, dropping parts and adding to parts as you go along? Look at print marketing versus web marketing today. In the “old days” of print marketing, everything had to get approved and go through the proper channels, while today’s web marketing aims to say more of “its good enough for now, at least better than it was before, and we can continue to improve upon it”
• trust your employees – what does it say when all ideas or plans or projects have to get approved 2-3 levels up the ladder, to make sure this is priority and fits in with the “plan”? It makes it awfully tough to execute, and sucks a lot of wind out of enthusiastic employees who may have some great ideas. Is your workforce that terrible, that you can’t trust your people to make smart decisions at least most of the time? If you don’t, maybe you need to have a long talk with your HR department about the recruiting and hiring process.
• grant decision-making and purchasing power further down the ladder – it seems like these days, smaller and smaller purchases need to go through lengthy and complicated approval processes. The same goes for other minor decisions. Is this all in the name of “risk management” or “fiscal discipline”? What’s the risk of failure, is it really worth the risk of encouraging employees to continue to do things the old way, and not even try to think about new solutions to problems, and ways to react to unique opportunities?