10 rules for effective strategic planning PLUS one more

Yesterday, today, tomorrowStrategic planning is becoming the corporate buzzword again. Over the past ten years companies have been obssessed with short-termism and strategic planning was largely ignored for tactical activities based around improving sales and cutting costs for the next quarter or year at most. Many critics of strategic planning suggested that the ideas of Michael Porter and other business gurus, who developed theories/models on strategic planning and strategic analysis in the 80’s and 90’s, were now obsolete. Companies dropped strategic planning in favour of short term returns. With the current economic downturn companies are clambering to rethink their 5 and even 10 year plans.

Last year we worked with The Scout Association to develop their ten year strategic plan and assist them in obtaining buy-in. They have a rolling 10 year plan that they revisit every year. We began working with them on their strategy a month before the global financial crash and I recall thinking how amazing it was that the Scouts had a ten year plan taking them to 2018, when most corporates didin’t even know what their plan was 12 months down the line.


This week we met with a large pharmaceutical company who we have recently done some work for. They have identified the importance of revising their strategic plans but their greatest challenges is convincing members of the management team not that they now need a strategy, but that the strategy needs to be flexible or what we call an emergent strategy – a strategy that is allowed to flex with changing market conditions. Back in the 1980 and 90’s companies could have a set 3-5 year strategy, but today this is no longer possible for two reasons. Volatility and pace of change. No one can clearly identify what will be happening in a year let alone 3 years time. When we asked why members of the management team wanted a set strategy it became clear that during turbulent times people want something they can hold onto, something that gives them a sense of comfort. A strategy that is continuously morphing and adapting is unsettling not comforting. And here is the crux, as companies return to strategic planning process table they need to be careful not to fall into the trap of creating strategic plans that are cast in stone. Rather they need to build one very crucial element into the strategy plan – flexibility. Strategies need to be emergent rather than one set path.

I came across these ten effective rules for strategic planning today on a great site called bnet. I’ve copied and pasted their list below and I think it’s a pretty good list to follow if you are rethinking your strategy, but please add one more rule to it:

Build flexibility into the strategy: Allow for emergent strategy to be part of the accepted process and outcome. It is impossible to identify all the outcomes no matter how good you are at scenario planning. Have an end goal in sight but accept that getting there may require several abrupt turns and even a u-turn or two. so Rule Eleven is get your management team to buy into an emergent strategy.

Here are the other ten rules:

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4 thoughts on “10 rules for effective strategic planning PLUS one more”

  1. hamza davis says:

    I was once reminded that the most effective/productive employee is the one that actually takes a vacation. During vacation they aren’t tied to their iPhones/Blackberries. Once their mind is at rest, they can think strategically instead of always “putting out fires” tactically. So much for “short-termism.”

  2. Dion Forster says:

    Thanks for this great post Dean. I served first as a Methodist Minister for some 15 years, then a University lecturer for some years after that. Now, I work in a large corporate environment trying to help them to reshape themselves to be more socially responsible, discovering ways to move from mere profitability to longer term significance, from simply keeping the share holders happy to leaving a lasting legacy – this is no small task!

    So, after completing a string of degrees over the years I had thought that my learning was done when I got a PhD some years ago… Now, however, I am discovering that I know nothing! I recently enrolled at the Stellenbosch Business school to get a bit of ‘business sense’! Among the modules is one in strategic management. Most of the students (some of whom are the MBA class) have taken on ‘regular’ strategic management processes for their assignments (what you rightly point to as ‘short termism’ and simply improving productivity towards the bottom line. I have however tried to do something a little more daring by trying to find ways of helping one of the large organizations to become much more effective in their ‘social investment’ activities (they have two trusts that disburse approximately R15 million). It has been something of a challenge to convince some of the leaders that even such activities are a significant investment that require significant strategic processes!

    So, thanks for your clear, succinct, and helpful post.

    Best regards,

    Dion

    1. Hi Dion

      Thank you for your comments, you raise some excellent points. With forward looking managers like yourself, companies will be dragged into the New World of Work, even if it is done kicking and screaming! The key thing for social investments is to make the work for the business. Most customers dont even know what the company has done. As a result a lot of goodwill that could be generated is lost. Actually most staff don’t even know what the company is doing with its social investment. People want to feel that they make a contribution to society. But in business, because of the “production line” and functional approach to doing business, it’s not always easy to see the end result from your hard days work. I think companies need to actively communicate their social responsibility activities to their staff and get them involved. Social investment doesn’t always have to be a monetary investment. A half day off work to contribute to a charity/good cause of your choice each month is an example of a non-monetary investment that a company can make and create a sense of involvement and significance amongst its staff.

      Good luck with your MBA project, I’d be happy for you to contribute ideas and would be interested in reading your final submission. Dean

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