How strategic planning is changing

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There are some important changes in strategic planning and how organisations are approaching this. The ‘traditional’ approach to strategic planning – a one-off intensive project to produce and document a plan that the organisation then tries to implement, often as part of an annual planning cycle – is recognised as being no longer fit for purpose. Indeed, leading thinkers about strategy such as Henry Mintzberg have been arguing this for years – but maybe now the shock of the pandemic has been the tipping point that is leading organisations to adopt a more ongoing, dynamic approach to strategy.

My approach to strategic planning has always been to see it as a journey that each organisation takes, in which people make sense of, and develop a shared understanding about, where their organisation is heading and how it intends to  get there. Like any journey, this requires continually checking the route and making changes when appropriate – and scanning the horizon and choosing new destinations at times too.

So how is strategic planning changing? To start the discussion, here are four important developments:

  1. Organisations are recognising that they need to think differently about the future. A linear approach to projecting the market (with some best/worst case scenarios) is too narrow: there is a need for deeper, more creative thinking, considering possible and plausible futures (welcome and otherwise), and working back to the implications for the organisations now. The ability to contemplate this in a structured way needs to be learnt by the organisation – it’s a very different skill to what people are used to; and the willingness to accept uncertainty and deal with the consequent risks is a big leap
  2. Strengthening the organisation’s strategic capabilities. As I’ve written about in previous issues of Strategy Insights, there are three aspects of this: the ability of people in the organisation to think strategically; the strategic management of the organisation (creating and managing the opportunities for people to focus and engage in a structured way in deciding the organisation’s strategy); and strategic leadership, ensuring that the organisation has the capabilities to do this, and knows when to focus on this. Investing in developing those capabilities is vitally important if the organisation is to be able to adopt a dynamic approach to its strategy
  3. Processes and people are more important than sophisticated tools and techniques. Given my approach to strategy, this might seem a somewhat obvious statement! However, so much attention continues to be directed to strategic analysis and formulation; although these are important elements, it is at least as important to focus on how to engage people and the processes to enable this. Ultimately it is the degree to which people in the organisation understand and make sense of its strategy that will determine the organisation’s future
  4. Culture is a vital element in enabling effective strategic planning. If you want an organisation that is flexible and quick to adapt, and can cope with change and uncertainty, then you need to develop an organisational culture that can enable this. Culture change takes time and sustained effort (which is why it can prove so difficult to achieve). Arguably this is part of the strategic leadership capability of the organisation, to establish the internal environment in which the organisation can thrive as it embarks on its strategy journey, engaging people and making sense of its future collectively.

These four areas seem to me to be significant ways in which the approach to strategy is changing. They are important ‘building block’ elements that organisations should consider, assessing where they are now and what they need to address to develop a more dynamic approach to strategy. Organisations  are recognising that their strategy journeys to their futures are going to be more challenging, and they want to equip themselves better to be able to embark on these and survive and thrive whatever the uncertainties they encounter.

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