The January 25, 2010, Wall Street Journal offered an article headlined "Strategic Plans Lose Favor" with a subhead of "Slump Showed Bosses Value of Flexibility, Quick Decisions."
I beg to differ with the basic premise of this article. The opening salvo in the article is:
"During the recession, as business forecasts based on seemingly plausible swings in sales smacked up against reality, executives discovered that strategic planning doesn’t really work."
By "work," they must mean it doesn’t take into account day-to-day, month-to-month, or quarter-to-quarter deviations from the plan or expectations. That isn’t the purpose of strategic planning.
Walt Shill, head of the North American management consulting practice for Accenture Ltd. offers the following thought in the article:
"Strategy, as we knew it, is dead. Corporate clients decided that increased flexibility and accelerated decision making are much more important than simply predicting the future."
The best companies in the world do not neglect or forget about strategy during normal, recurring economic events including a recession.
The lack of effective processes to support sales and operations planning and to look at investment opportunities identified within or even outside the strategic planning process does not mean that strategic planning should be abandoned in favor of short-term thinking and planning.
The best companies need to be able to walk (have an ever-evolving strategy) and chew gum (have a good handle on sales and operations planning as well as take advantage of serendipitous investment opportunities). The best companies can ill afford to neglect their strategy just as they can’t neglect sales and operations planning. This isn’t an "either/or" proposition—it’s an "and" proposition.
Strategic planning isn’t going away in spite of some things you may read. That’s my conclusion and the conclusion of the WSJ authors of this article.
Dave Gardner is a management consultant, speaker, author of Mass Customization: An Enterprise-Wide Business Strategy and blogger who resides in Silicon Valley. He helps his clients eliminate business execution issues that threaten profitable and sustainable growth. He can be reached through his website at www.gardnerandassoc.com.