Strategic Plans Lose Favor
This Wall Street Journal article on strategic planning recycles a recurrent theme: when the economy is down, or when there is high volatility, media stories will quote people making rash statements like strategic planning is dead. (the lead-in paragraph ends with the statement “…executives discovered that strategic planning doesn’t always work.”
Danger. Warning. Do not take this stuff too literally. Unfortunately, many people will do just that. If the read nothing further, and take away only that nugget, they may decide to toss strategic planning overboard.
I remember hearing a lot of that stuff in the late 1990’s. It was often stated after the pronouncement that “the Internet changes everything.” Or “things are happening so quickly, that strategic planning is now irrelevant.” Hah! Even venerable Michael Porter, the Harvard Business School professor considered one of strategy’s greatest luminaries — a rock star — was considered by many who drank that cultural Kool-Aid as no longer relevant.
While Porter felt challenged for a while, his strategy guru reputation was vindicated and remains quite intact (unlike the flag bearers for such notions, like Webvan).
Unfortunately for Walter Shill, head of the North American management consulting practice for Accenture, he was quoted in this article as saying “Strategy as we knew it, is dead.” Well, as who knew it? He then goes on to say “Corporate clients decided that increased flexibility and accelerated decision making are much more important than simply predicting the future.” Well, OK, sure — especially in times like these. Or wait, wouldn’t that be the case even in stable, growing times? Sure, it would.
I am sure that if Shill had more ink with which to explain his thoughts, he probably would have made it clear that strategy itself is still very important, however shorter feedback loops to update that which needs to be updated regularly are critical. He might have emphasized how important it is for companies to compress their planning cycles to ensure greater responsiveness to current conditions. And, to consider more alternative scenario analysis to contemplate different outcomes.
At least, that’s what more sophisticated companies do, and they have been moving that direction for years. Further compression of the plan>evaluate>re-plan feedback loop in today’s uncertain environment makes plenty of sense. The article cites a few companies whose ability to ride out this economic storm has been aided by such advice.
Only unsophisticated and/or desperate to survive companies will toss planning out the window entirely.