Strategic 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: