|Let’s consider three typical ‘traditional’ approaches to strategic planning:
- the ‘strategic plan project‘, where the organisation undertakes an intensive exercise over 2-3 months to produce a document for Board approval, followed by regular management reviews of progress on the objectives and initiatives in the plan
- the ‘annual planning cycle refresh‘, where the organisation checks its progress against its current strategic plan as part of the budgeting process for its next financial year
- the ‘fundamental strategy review‘, often led by an external management consultancy, and which leads to major organisational changes such as restructuring or mergers and acquisitions.
The first approach is what usually comes to mind when we use the term ‘strategic planning’, an initiative undertaken every 5 or so years that sets out the organisation’s aspirations for the next phase of its development and a roadmap for how it aims to achieve these. There is a project-style approach to this, and the effectiveness of the resulting plan hinges on the quality of the strategy formulation, the persistence in its implementation, and the extent of engagement and understanding within the organisation; it also depends on there being no game-changing developments that throw the strategy and its implementation off course.
In the second example, there’s a risk of not questioning the current strategy or considering possible futures beyond the assumptions (often implicit) and organisation’s worldview underpinning its strategic plan: the emphasis is likely to be on planning, deciding targets and allocating resources. Often the process consists of a Board workshop to set the priorities and parameters, followed by Departmental submissions to a timetable defined by the deadline for approval of the financial plan. Little emphasis is placed on re-examining the organisation’s strategy or developing the strategic thinking that would strengthen the organisation’s ability to adapt to unanticipated change.
In the third case, the rationale for bringing in an external resource is to provide an independent and objective assessment and a wider perspective about the organisation’s strategic situation, and to avoid the undue influence of internal vested interests. However, outsourcing the strategic thinking can result in a lack of ownership and a dissociation from the resulting strategy: the perception is that the new strategy has been delivered as a fait accompli to the people in the organisation, rather than developed with and by them. In this case too there is no strategic organisational learning nor development of its strategic capabilities.
These three approaches illustrate the way in which strategic planning happened in many organisations: develop a strategic plan every few years, then focus on implementing it with only occasional checking on the strategy, with a fundamental review and major change when the organisation is in danger of being left behind.
As the past 15 months has shown, organisations need a much more agile and responsive approach to strategy to be able to adapt quickly to rapidly changing situations and unexpected events. To use my ‘strategy journeys’ analogy, it’s no longer sufficient just to plan a destination and a route and expect to have mapped out the path fully: an organisation’s journey today it is much more like an adventure into new territory, exploring and adapting to what is encountered and discovering what paths might lie ahead.
To be able to adopt this more dynamic approach, organisations need to develop their strategic capabilities: the ability to think, talk and decide strategically on an ongoing basis. Strategising and organising are embedded as part of the culture; strategic thinking, questions and conversations happen naturally, not just periodically. Organisations are now investing in strengthening these capabilities, as surviving and thriving in today’s fast changing and uncertain world will depend on how well equipped they are for their strategy journey into the future.