Debunking the Myths of Strategic Planning
Gooderham, Gay, CMA - the Management Accounting Magazine
Much of the conventional wisdom about what strategic planning is, and does, is misplaced and inconsistent with what really happens. Here are some insights on recent trends in expectations, and myths - not to present the definitive "how-to" manual of strategic planning, but rather to help generate an understanding as to why such a manual does not exist.
Strategic planning is attracting renewed interest among leading organizations. According to Bain & Company's fourth annual survey of management tools and techniques, 89 per cent of the 870 international managers surveyed use strategic planning to drive success through their organizations.
Members of the board of the Toronto chapter of the Strategic Leadership Forum have seen strategic planning fluctuate and evolve for years now. Several volunteers, both past and present board members, recently joined me in a discussion of strategic planning. We reviewed recent trends in expectations and myths with respect to strategy. Our purpose here is not to present the "how-to" manual of strategic planning, but rather to help generate an understanding as to why the definitive "how-to" manual does not exist.
In recent years there has been a wide spread shift from centralized planning departments to decentralized, shared responsibility for strategy across the senior management team. Our gurus of contemporary wisdom promised that, by opening strategy development up to the entire management team, it would no longer be a black box, beyond the comprehension of 95 per cent of the organization. The Strategic Leadership Forum, anticipating this trend, changed its name from The Planning Forum and advocated the learning and use of best practices in strategic management throughout organizations. We viewed this trend as a positive acknowledgment that strategy had to be integrated with daily management decision making and cross-functional team problem solving in order to be successful.
But this positive change had some less than desirable impacts. In some organizations, the strategic planners, who had been schooled in the tools and techniques for facilitating strategy development, ended up being downsized. At the same time, senior managers, who had focused primarily on operational decisions, were asked to take full responsibility for strategy development. For many executives, the demands of today's decisions just didn't allow for big picture, "what-if?" type discussions. As a result, strategic planning seemed to hit a lull for awhile. After sampling many management tools and techniques - some appropriately, others misplaced or poorly applied - organizations are once again turning to strategic planning as an additional robust approach to pull the organizational efforts together into a co-ordinated unit with a common focus and direction.
Understanding the nature of strategic planning better
Now that strategy is experiencing a rebirth, we think a few myths about strategic planning need to be examined. The emphasis on what strategic planning is, and does, is misplaced. The biggest contributions that planning makes to an organization are not the tangible ones that have been traditionally described. Many of the practices that are proposed by various practitioners are inconsistent with the way that planning really occurs. In our discussions, we identified eight myths (among others) that we feel need to be examined under the light of day. We do so herein, and include a suggested reading list (see sidebar) that can provide helpful explorations, and some possible new directions.
The eight myths
1. You need a documented plan. We started our discussion by asking, "What is the value of strategy?" In our collective experience, the strategic plan itself is not where the value lies, though it is often the most visible, tangible output. Rather, it is the development of the plan that provides the value-added. In other words, "it's not the breath but the breathing that's important. …