Wednesday, March 23, 2011

Some more insights into Strategic Planning...

The article found at reflects some of the concepts found in the ‘Real Value of Strategic Planning’ reading for this week.

The article first states the need for strategic planning. Many of the organizations today “fire” first and “aim” later in an attempt to find a foothold in the marketplace. Although this may prove beneficial in the short term it may have an adverse effect in the long term. Strategic planning thus plays an important role in an organization.

What is interesting and noteworthy is the definition and goal of strategic planning stated in the article. According to Peter Drucker, the country’s most influential thinkers and writers on management theory, “Strategic planning does not deal with future decisions. It deals with the futurity of present decisions. What we have to do today is to be ready for an uncertain tomorrow.” The goal of strategic planning is to get the organization’s leaders focused on the same priorities, equip the company to withstand changes in the marketplace by aiming first and firing second and inculcating a sense of ownership in the employees. ‘The Real Value of Strategic Planning’ article reflects these concepts by stating that “companies react poorly under pressure” because they are not ready to face “real time developments”. Strategic planning is thus necessary to create “prepared minds” – making the participants better informed which will enable the company to make real time strategic decisions.

The article also highlights some key steps in the strategic planning process. If the organization is conducting the process for the first time or earlier attempts have proved to be futile, engaging outside consultants or facilitators could be helpful. This is more likely to increase open participation and result in a fruitful discussion. Similar to what is mentioned in ‘The Real Value of Strategic Planning’, the formation of the right team for the planning process is very critical and should always involve the CEO and Chairman. This article however mentions that apart from the senior management it may be necessary to include employees who will actually implement the plan. This would also give the management an insight into the day to day issues while the employees can better understand the top level issues. Once a strategic plan has been formulated it is necessary to have an effective follow up. The reading states that the CEO involvement right from the beginning is critical. In companies that have succeeded in strategic planning, the CEO has taken down notes and sent a memo to the other leaders and also incorporated the goals into the compensation plans. This article further build up on the reading by stating that action plans must be developed along with regularly scheduled status checks to ensure that the documents do not just end up collecting dust.

If all organizations employed the ‘Ready, aim, fire’ methodology what impact would it have on corporate America? Could this have saved the big companies from sinking during the 2008 recession?

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