Episode #120: Strategic Planning: Efficient, effective, neither?

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Five counterintuitive truths about strategic planning

  1. Profit is not an adequate foundation for a strategy
  2. We do not want for answers; we suffer from an inability to ask new and better questions
  3. The Mother of All strategic Questions does not come back to revenue
  4. Strategic planning is more creative than analytical
  5. Strategy is about effectiveness, not efficiency
As modified by Great Plains Software leadership, circa 1990

As modified by Great Plains Software leadership, circa 1990

Summary of The Rise and Fall of Strategic Planning, by Henry Mintzberg, 1994

Planning is future thinking, or controlling the future.

Planning = Latin = planum “meaning flat surface.” The word entered English language 17th century, referring principally to forms, such as maps or blueprints drawn on flat surfaces.

The squirrel plans (stores nuts): are they more sophisticated or is planning less so?

If only you dumbbells executed better!

If you so smart, why didn’t you take into account we are dumbbells?

To Michael Porter, strategy = position.

To Peter Drucker, strategy = perspective (the theory of thebusiness).

Fundamental fallacies of planning

  • Predetermination (predicting the future)
  • Detachment (from operations/managers
  • Formalization

All three = The Grand Fallacy: that analysis can produce synthesis.

Analysis ≠ Synthesis, and strategic planning is not strategy formulation, so the term is an oxymoron.

Strategic planning (SP) is less about creativity and more about rearranging established categories; stability over adaptability, or institutionalized incrementalism.

It’s more extrapolation than invention.

The quantification of SP is not much more than quantification of goals as a means of control.

Jack Welch dismantled GE’s SP; he wanted more judgment not data.

PPBS = Planning-Programming-Budgeting System. Robert McNamara, Secretary of Defense under President Johnson. Vietnam was USA’s most humiliating military defeat, ever. PPBS has failed everywhere and at all times.

But the planners will say, “Any plan is better than none at all. It’s the process that counts (SP is not Utopia, only the road to it).

But SP is a rain dance, and the process improves the dancing not the weather.

SP assumes there’s “the one best way” to formulate and implement strategy, inspired by Frederick W. Taylor.

SP is not defended for what it accomplishes but for what it symbolizes—rationality.

Henry Kissinger referred to planning as “a sop to administrative theory.”

Pseudo-scientific knowledge can be more dangerous than plain ignorance or common sense.

Americans get off on strategy like French get off on good food.

How do you make God laugh? Tell him your plans.

 

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Ed Kless

Ed Kless joined Sage in July of 2003 and is currently the senior director of partner development and strategy. He develops and delivers curriculum for Sage business partners on the art and practice of small business consulting. Courses include: Sage Consulting Academy, Business Strategy and Customer Experience Workshops. Ed is the author of The Soul of Enterprise: Dialogues on Business in the Knowledge Economy, a compendium of a few of the episodes of his VoiceAmerica talk-show The Soul of Enterprise: Business in the Knowledge Economy with Ron Baker, founder of the VeraSage Institute where Ed is also a senior fellow.