Pitfalls of strategic planning

Strategic Planning

Strategic planning[1] is a management tool that helps organizations to perform well, and concentrate its energy and resources towards a commonly shared goal, to act as a light- house to track and adjust the direction in which the organization is moving in response to changing times. It is a disciplined exercise to formulate the roadmap which decides what organization is and what it will be. What it does and what it will do.

He who fails to plan, plans to fail. But what when the planning fails!

It has been found in many a times that in spite of the intellectual and operational effort put in the strategic planning fails. There are various reasons this failure can be attributed to a few of which are illustrated in this blog.

Lack of motivation and commitment [2]: Success of any venture presupposes commitment and faith, both from top and grass-roots as well. Strategic planning is not different. Lack of inspiration to strive towards the goal turns planning to shambles. Lack of communication and unidirectional mandates of planning on employees takes its toll.
It is true to say that “To accomplish great things, we must not only act, but also dream; not only plan but also believe”[6].

Delegation Error: Wrong Planners cannot do right planning. More often strategic planning fails due to selection of wrong people to plan. Wrong people need not mean in-competent or less skilled people, it means people not best to undertake the activity on account of either their too close association with the present state of affairs which bars them from seeing a different perspective or due to their absolute un-awareness about the crux of matter.

Strategic Stubbornness[3]: In presence of anti-change stubbornness in the self-infatuated organization either at management level or at executive or employee level, any planning process is destined to fail. If the organization is fool-hardily clung to its present strategy which seems to be a mis-fit with its overall vision and changing environment, the strategic plan will surely fail.
The key is “Expect the best, plan for the worst, and prepare to be surprised”[6]

Garbage In; Garbage Out: if the resources and effort fed into the planning system is no good, the output can be no better. If the organizational know-how, the understanding of its mission and vision, assessment of its present state of health and its environment are not garbled to start with, the same can be expected for the outcome of strategic planning. Basing strategies on flawed assumption will prove the theorem wrong.


Myopic Opportunism: Strategic opportunism[3] is to be extremely focused towards present on the premise that environment is too dynamic to plan for the future. This is not bad. But too much attention to the “is” makes the planning myopic of what “will be” or “can be”.

Lack of Structure and control[4]: Lack of proper guidelines for implementation and operations of the plan results in poor understanding and operational hazards in execution. Unrealistic goals and unsupportive implementation mechanisms result in poor strategic planning.

Apart from these pitfalls there can be reasons like lack of foresight of multiple probable futures, one dimensional strategy, arbitrary goals and failure of using plans as a measure of performance management.

Though the pitfalls are numerous, but sure they are curable and avoidable. To start with a proper leadership support, with un-restricted two-way communication of information, can produce shared vision of the future. “Cathedral thinking”[5] can ensure the commitment to perform, to strive towards a clear goal, will ensure that mechanisms work and outlook is far into the horizon.

References:
1. What is strategic planning? Frequently asked questions, retrieved September 8th 2008, from http://www.allianceonline.org/FAQ/strategic_planning/what_is_strategic_planning.faq
2. Picken, J. C. and Dess, G. G. (1996). Mission critical: The 7 strategic traps that derail even the smartest companies. Irwin Professional Publishing
3. Wiley, John (2005). Creating Advantage – Synergy and vision versus Opportunism, p 8-15
4. Mintzberg, H. (1994). The rise and fall of strategic planning. New York: Free Press
5. What is cathedral Thinking?, retrieved September 8th 2008, from http://www.wisegeek.com/what-is-cathedral-thinking.htm
6. Planning quotes, retrieved September 8th 2008, from http://thinkexist.com/quotations/planning/3.html

Strategic Drift ... Is it always bad ?

Strategic Drift “To be in hell is to drift: to be in heaven is to steer.” – George Bernard Shaw Is the strategic drift always bad? Strategic drift can be defined as the cleavage from the planned strategy or more precisely steps taken to change the goals and vision in order to the match the unplanned outcomes success or failure. Strategic drifts occur as a result of weak planning, poor goal setting and performance system. It is a general mis-fit between the strategy, in-congruence between the vision and operations of the organization when it stops walking its talks. In fact it changes its talk to match the way it walks. The term was first defined by Charles Handy in 1989, as a gradual change in strategy[1], a drift from vision that occurs so subtly that it is not noticed until it is too late. I would illustrate the concept with the example portrayed in the article “The Vision Trap”[2] by Gerard H. Langeler. The article talks about a start-up company called Mentor Graphics founded by a few enthusiastic and self-confident MBAs having a background in computer graphics and computer aided engineering. With the agenda of catering to the demand for product, the primary motive to have fun, Mentor Graphics embarked its journey with a simple unarticulated vision to “Build something that people will buy”. After a few initial hurdles it got business and started doing good and in some time was faced with competition from Daisy Systems. Their unarticulated corporate vision changed to “Beat Daisy”. Their vision was simple, black and white, with Daisy’s bad as their good! After eventually beating Daisy the employees urged for a more concretely defined vision for the company and the leaders came up with the vision of “Six Boxes” denoting striving for excellence in six lines of business the company was into. But this vision was less quantifiable and lacked sense of urgency yet easy to understand. Their strategy drifted from overall success of company to sub-system optimization as each of the six boxes had its demands for resources. With the un-viability of some businesses they were reduced to “Five boxes” and less! They went up to a more customer focused vision of “10X Imperative” which was to make external customers 10 times more productive. But this too failed as neither they nor their customers were clear on what productivity is. The company progressed on account of its products, though the vision was unclear and strategy mis-fit. Subsequently it had visions like “Providing the Bleeding Edge technology” and “Changing the way the world designs. Together”. The company soon realized that they were not generating products but poetry. With the grandiose vision of changing the world it was high time that they realized to be engulfed in what is called “Vision Trap”. They realized that their visions have out grown them and their strategy and vision were having a rough marriage. They came back to basics with the short, medium and long-term vision of “Build something that people will buy”. This had always been their primary strategy. Nothing suited their strategy better than having fun in building something that people will buy. It captured the entire essence. The above article clearly explains that the strategic drift occurs when the original goals become vague and impertinent. Then the strategies can no longer uphold the vision and consequently the vision needs to be changed to suit the strategy for good or bad. A robust strategy presupposes a well thought out vision. If the vision mis-matches with the ad-hoc strategy, decisions are made incrementally to fuel present strategy and not as a part of vision. To conclude, Strategic Drift is not necessarily bad. If faced with strategic drift, it is pertinent to the organization to correct its basics and identify whether it has fallen into vision trap or is actually striving the wrong path. Putting a square peg in a round hole will not help. “Do not quench your inspiration and your imagination; do not become the slave of your model.” - Vincent van Gogh, Painter References [1] Strategic Management, Wikipedia, retrieved September 6th, from http://en.wikipedia.org/wiki/Strategic_management [2] Langeler, Gerard H. “The Vision Trap”, Harvard Business Review, Mar/Apr92, Vol. 70 Issue 2, p46-54

First Blog ever

This is my first blogging experience. Though this blog is created as a medium to share the concepts and understanding of corporate planning, I hope it will eventually become a channel of expression.