“The Real Value of Strategic Planning” by Sarah Kaplan and Eric Beinhocker identifies the purpose, goals and obstacles to planning. The purpose of strategic planning is to create prepared minds. The goals are answered by several key questions - “Who should attend reviews”, “How long should the review process be”, “Where should a review be held”, “What should be discussed”, “How should the conversation be conducted” and “How much preparation is necessary”. These questions also expose obstacles particularly.
Strategic plannings greatest demand is in time for thinking and preparation. The approach is dependant on the culture of the firm that implements the plan. The authors also require that firms review their current processes so that they can be adjusted or enhanced. The ability to improve is always a goal, even if the good decisions from the plan don’t pan out. The process of preparation allows for better corrective ability if the original plan needs to be revised midstream.
The planning process inspires techniques that help managers to consider their options by thinking about alternatives. This issue is also addressed in “Eyes Wide Open: Embracing Uncertainty through Scenario Planning” from Knowledge@Wharton.
In this article, the authors ask firms to consider using scenario planning and to use it thoughtfully. They present “what if” conditions like - “What if the government of Iran is overthrown? How might our firm be effected and react?” This condition is not necessarily likely but it may happen and be of consequence.
The authors suggest 4 steps to plan through scenarios: 1) Create Options, 2) Think Differently, 3) Develop New Scenarios and 4) Plan for What’s hidden in Plain Sight. While these things are often thought of, they are attempted less often than expected because of the momentum of firm culture. However, deliberate preparation and consideration of alternative mitigate some of cultures resistance. This reinforces the message of Kaplan and Beinhocke. It is the preparation process that allows managers to forecast and react.
The Real Value of Strategic Planning - Sarah Kaplan and Eric Beinhocker, MIT Sloan Management Reveiw, Winter 2003 Vol44, #2
Eyes Wide Open: Embracing Uncertainty through Scenario Planning
Published: July 22, 2009 in Knowledge@Wharton