strategic planning

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Strategic planning, in most of its various forms, tends to do just what the name implies - plan a strategy. The point being, the strategy is assumed to either be preexistent or materialize spontaneously during the planning process. Often this absence of the creation of strategy is not explicitly recognized by those using the typical strategic planning processes though it is implicit in the planning processes.

Typical strategic planning process --
There are hundreds of variations of strategic planning processes. Typically, they follow the same general process that is something like the one following --

  1. Define the mission
  2. Establish objectives
  3. External and internal analysis
  4. Strategic choice
  5. The planning steps are then followed by strategy implementation.

Note that there is no place where novelty is explicitly generated and that the objectives precede the strategic choice, sometimes called strategy formulation. This model does not allow for the possibility for a new identity to form.

The three fallacies of strategic planning as a means to create strategy (Mintzberg) --

  • the fallacy of predetermination -- the expectation that the future unfolds as forecast and foreseen by management. The failure to foresee discontinuities.
  • strategists can be detached from the operations of the organization -- those not engaged in the daily operations of the organization depend on abstractions to in data and information that aggregates into a meaning that is neither rich or true. Effective strategists immerse themselves in daily detail and abstract the relevant messages from it.
  • The fallacy of formalization -- formalization ignores the role of learning from unexpected events and the apprehension of unanticipated patterns in developing novel strategies. Formalizing activities works against the insight, creativity, and synthesis needed for novel emergent strategy.

What strategic planning is good for -- strategic planning is good for formalizing the implications of strategies constructed by other means.

Comparison of strategic planning to strategic intent --
One thing that effective strategic management processes have in common is they embrace exploration, the creative side of strategy, as much as exploitation, the planning and deployment of strategy. The effective approaches have some form of motivating ""guiding light"" that attracts and pulls the organization in the right direction - vision, BHAGs, Hedgehog Concept, strategic intent, theory of business, strategic focus -- which inspires creativity, gives this creativity a direction, and provides a touch stone for all decisions made on an ongoing basis.

Organization decision makers, whether deploying strategies or making daily operational decisions, should ideally be responsive to the events and situations they are encountering in real-time while making those decisions in pursuit of the strategic intent. With a strong statement of strategic intent, it is this intent which aligns actions, not a comprehensive strategic plan with objectives down to the last person in the organization. The comprehensive plan is out-of-date the day it is put in place and gets further out of date with every passing day.

Strategic intent vs. planning trade-off --
An essential aspect of organizations with a competitive advantage is that decisions made are in line with the strategic direction of the organization and opportunity focused as much as problem solving focused. In an organization with a clearly articulated and understood strategic intent, daily decisions align with the intent. Without an explicit intent in an organization, plans and objectives must be cascaded throughout the organization to align decision making with a strategic direction. This is better than unaligned decision making, but is less than optimal due to the ""half-life"" of a decision. The quality of a decision deteriorates over time due to the continually changing environment. By the time it is cascaded throughout the organization, it is further out of date. The organization is aligned, but less responsive that is could otherwise be.

The case for strategic planning -- The need for an rigor of a strategic plan varies based on many factors, such as leadership competency, culture, and vision. The more an organization needs prioritization of objectives, alignment of activities and alignment of resources to the activities, the more dramatic results will be of a well planned and executed strategic plan. But by itself, without the strategic intent or focus, it is largely an optimization exercise, i.e. and exploitation exercise. The organization will most likely perform better, but will have done little to secure its future competitive advantage.