Strategic DirectionBetter strategic planning: Managing change and planning for the future require both vision and strategy

Article information:To cite this document:, (2012),"Better strategic planning", Strategic Direction, Vol. 29 Iss 1 pp. 30 - 32Permanent link to this document:http://dx.doi.org/10.1108/02580541311285410

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Better strategic planning

Managing change and planning for the future require both vision and strategy

Introduction

It would be very difficult to find a company CEO or a department manager who did not

acknowledge the need for strategic planning when making major decisions about company

policies or when contemplating large-scale directional change. However, the problem with

strategic planning is that it is not always very effective. The reasons for this range from the

fact that sometimes it is not strategic enough, or robust enough, to the use of strategies

developed to meet the needs of very different industries.

Different strokes for different folks

Reeves et al. (2012) compare the oil industry, which changes in a fairly predictable manner

to the highly volatile internet software industry. They point out that very different types of

strategic planning are needed in such dissimilar industries and that the mistake planners

often make is to adopt strategies that are not specifically designed for their industry’s

requirements.

So how can businesses ensure that they have effective strategic planning in place? Parke

(2012) suggests that what he terms ‘‘brutal’’ honesty is needed before any strategies are

selected. This means that companies need to clearly identify their strengths and

weaknesses, and also that they make a realistic assessment of the market. A strategy that

works well in times of financial ease may not be as effective during a recession, for example.

Another piece of good advice is to limit areas for strategic planning. As planning on this level

requires time and resources, it is not efficient use of either to attempt to fix everything at

once. Therefore, companies that focus on the key areas for change and continue to manage

other aspects of their business will be more likely to succeed.

Knowing your strengths and weaknesses

Identifying strengths and weaknesses will help managers to identify the type of strategy they

require. Reeves et al. (2012) divide strategic planning into four broad categories: classical,

adaptive, shaping and visionary. The classical strategic style is the one most often taught in

business schools so it is familiar to most managers. This style depends on stability because

it makes long-term predictions designed to optimize efficiency. The gas and oil industry is an

example of an industry that uses classical strategic planning effectively. However, industries

experiencing rapid changes, such as the fashion industry, need to use an adaptive style of

strategic planning that builds in flexibility and allows for short change cycles. If even greater

flexibility is required, such as in the internet software industry, a shaping strategy allows for

continual planning cycles while attempting to mold the unpredictable environment to the

PAGE 30 j STRATEGIC DIRECTION j VOL. 29 NO. 1 2013, pp. 30-32, Q Emerald Group Publishing Limited, ISSN 0258-0543 DOI 10.1108/02580541311285410

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company’s advantage. The final strategy style is visionary. This shares the goal of altering the

environment with the shaping model, however it otherwise has more in common with classic

management style because it plans for long-term goals. Visionary strategic planning

requires a clear picture of what the future could be like. UPS used this style of strategic

planning when top managers in the firm had a vision that they could become the enablers of

global e-commerce. UPS realized that e-commerce was the way products would be bought

and sold in the future and that their long-term development depended on being able to

provide a delivery service used by online retailers.

Strategy testing

Whatever strategic planning model is used, an important aspect of the planning process is

strategy testing. This involves trying out a strategy in a small area before using it to plan

major changes. Strategies can appear effective on paper but be tripped up by unexpected

pitfalls in practice. Testing the strategy can identify these problems and alter practice before

big losses are incurred. This may involve adapting the strategy, or even changing it

completely. However, if the strategy is seen to work well in small areas, this can be a powerful

tool to convince traditionalists that change is not only needed but will be effective.

Social strategy

This highlights the social aspects of strategic planning. Even the best plans can be inhibited

or even sabotaged if not accepted as beneficial by key players within an organization. Using

social strategy initiatives encourages collaborative strategic planning which can prevent

dissent when change is introduced.

Sibony (2012) suggests that part of the problem with strategic planning is that it is not

strategic enough. So-called strategic planning meetings are often taken up with issues such

as planning budgets rather than with real strategy development. This may be because

managers are concerned with issues such as confidentiality or because they have other

fears about opening up the strategic planning process to a wider group of employees. One

problem is how to generate genuine debate rather than slipping into a ‘‘groupthink’’

mentality that confirms the status quo rather than generating change. Managers need to

think carefully about what they are trying to achieve and facilitate the process effectively.

Realistic assessment of the business environment

In addition, effective strategic planning is dependent on being able to assess the

environment in which business is conducted. This has implications for the initial decision to

make changes, the type of strategy selected to drive the change, and the effectiveness of

change implementation. Assessing the business environment should be second nature to

executives. Their ability to do this is one of the factors justifying their high salaries. However

Reeves et al. (2012) state that 80 percent of executives in a recent study overestimated their

own ability to influence the environment in which their businesses were operating.

Furthermore many continued to rely on strategic planning styles that did not match the

‘‘ Testing the strategy can identify these problems and alterpractice before big losses are incurred. This may involveadapting the strategy, or even changing it completely.However, if the strategy is seen to work well in small areas,this can be a powerful tool to convince traditionalists thatchange is not only needed but will be effective. ’’

VOL. 29 NO. 1 2013 jSTRATEGIC DIRECTIONj PAGE 31

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needs of their industry. This wastes both time and money, which could be saved by adapting

strategic planning more closely to an industry’s requirements.

Auditing change

The final stage of any change cycle should be an audit of its effectiveness. This is the only

way to demonstrate whether strategic planning has been effective or not. Surprisingly,

closing the loop is often neglected by executives who are good at forecasting and less

effective at systematically reviewing the effectiveness of their predictions.

Conclusion

Strategic planning is the key to creating change efficiently and effectively. While strategic

planning is a skill taught in business schools perhaps too much emphasis is placed on

classic methods of planning change. Today’s executives must include adaptability and

flexibility to their change management tool kit. Executives also need to have the ability to

assess the business environment accurately and to be realistic about their own affect on this.

Gaining support from other managers and employees in their companies by developing

more collaborative change management strategies may also be an operational method for

creating lasting change.

Comment

The three articles listed in the references all make a substantial contribution to the discourse

on strategic planning. Reeves, Love and Tillmanns writing in the Harvard Business Review

provide a clear explanation of the most common strategic planning styles and discuss how

and where these should be used. Siboney, writing in The McKinsey Quarterly offers three

observations about strategic planning. Parke, writing in Industrial Engineer emphasizes that

those who do not plan for the future will not arrive there.

Keywords:

Vision,

Strategy,

Future,

Collaboration,

Flexibility,

Adaptability,

Strategic planning,

Organizational planning

References

Parke, C. (2012), ‘‘Preparation meets strategic planning: organizations without a vision for the future

won’t get there’’, Industrial Engineer, Vol. 44 No. 1, pp. 44-8.

Reeves, M., Love, C. and Tillmanns, P. (2012), ‘‘Your strategy needs a strategy’’, Harvard Business

Review, September.

Sibony, O. (2012), ‘‘Collaborative strategic planning: three observations’’, The McKinsey Quarterly,

No. 2, pp. 94-7.

PAGE 32 jSTRATEGIC DIRECTIONj VOL. 29 NO. 1 2013

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