Wednesday, March 23, 2016

‘The Real Value of Strategic Planning Review’


“The Real Value of Strategic Planning” by Sarah Kaplan and Eric D. Beinhocker is an article which gives an in-depth analysis on the need for strategy by taking into account the planning processes of 30 large-scale organizations. The authors find that their research correlates with the management thinker Henry Mintzberg’s thoughts on ‘strategic planning’ where he mentions that real strategy is seldom made in a formal setting but instead formed most often in informal environments.
The real purpose of strategic planning as the article describes, is to create a set of prepared minds which would indulge in this process and then watching these prepared minds develop the right strategy eventually obtaining the right results.
Let us discuss the first aspect of the article, where the author mentions the need to create a set of prepared minds. Here, they answer several important questions mentioned as follows:
·  .      Who should attend these (strategy planning) reviews?
· .      How long should the review be?
· .      Where should they be held?
· .       What should be discussed?
· .       How much preparation is necessary?
· .       How much follow-up is needed?

By discussing the above mentioned questions within organizations, the authors emphasize the fact that various gaps can then be identified in the strategy planning process. These gaps would not have been even remotely visible had it not been for these questions. It is for this reason that the idea of ‘Challenging the Strategy’ is to be propagated. The authors believe that this is the most effective way of determining the scope and strength of any strategy plan.

In order to discuss the second aspect of the article where this set of prepared minds are put into action, the subsection ‘Changing the Process’ categorizes what companies need to do in order to obtain the ‘right’ strategy making process into 4 different tasks. Companies need to take these into serious account as failure to do so on any one stage would derail the entire process. These tasks are mentioned as below:
1 .      What is working? What isn’t?
2 .     Taking into account the conclusion of the above task, the company should then design the new process.
3 .     Once the new process is designed, it should be rolled out in a timely and orderly manner. An apt strategy to implementing this would be to select a business unit which could be the guinea pigs for such a test in exchange for extra resources. This way, more gaps could be identified and this would only help in developing the strategy planning process for the entire organization as a whole.
4 .    This task is to be done parallel to the above task. Here, along with the rollout, companies should set up special trainings in strategy development to the business-unit heads and other members who would in any way be related to the strategy planning method. This would reinforce the outlook of a good strategy for the company and better prepare the employees to pitch in more positively in the process.

An example we all can probably learn from in relation to this article is the strategy employed by Kodak during the advent of digital photography. This was a technology invented by the same company itself but its own film-based business model was deeply hurt by the lack of strategic preparation for the same technology. A major reason for this downfall was the fact that Kodak’s management did not completely understood the pace of changing technologies in the world at the time. They still felt they understood who were the consumers who took pictures and why. For this reason, they kept pushing the life of the film industry with numerous other smaller cameras and in this push, lost on the opportunity to move towards a more impactful strategy.

Concluding, it is the strategic planning process which would place their company either on the higher end or the absolute lowest of the market and should be taken with the utmost seriousness by the leaders of the company.







  
Reference:

The Real Value of Strategic Planning, Magazine: Winter 2003 by Sarah Kaplan and Eric D. Beinhocker

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