The McKinsey Quarterly (subscription required) just released the results of its latest survey on corporate strategic planning activities in an article entitled: Strategic Planning: Three tips for 2009.
Key results include:
- 47% of executives surveyed indicated that their strategic planning practices will be different this year than in prior years. 34% indicated that the activities would be “extremely different.”
- The differences tend to focus on increased emphasis on scenario planning, conducting a broader range of analyses, and as you might expect, focusing on more of a short time horizon.
- In what is likely good news for the malady that I described in my recent post, “Too many projects chasing too few resources,” one of the more widely reported changes for this period is an increase in the rigor of evaluating and approving capital projects.
- As for monitoring execution, 50% of respondents plan on scrutinizing their firm’s/unit’s performance against the plan somewhere between weekly and monthly.
The survey’s conclusion offers a cautionary tale on the potential for too much short-term focus, with the following:
“Important as these adjustments may be, their nature also raise a major question in the minds of many strategists: is the crisis atmosphere undermining focus on all but the immediate future? More than 50 percent of executives, in fact, express worry about not striking the right balance between near-term challenges and long-term strategic priorities. The perennial challenge of striking this balance has become particularly acute this year.”
From Planning to Conversations
You can set your watch by the fact that just as opening day in baseball rolls around, the articles on strategic planning start appearing. I continue to rail at the notion that this is a seasonal activity, and am actually encouraged by the large number of firms that are planning on evaluating performance against plan monthly. Hopefully, this evaluation is more than a distribution of reports, and involves opportunities to truly gauge progress, capture lessons-learned and make real-time adjustments.
While there is no doubt that strategic planning done right is a valuable management process and tool, in my opinion, we need to change both the vernacular and the approaches to move from strategic planning to conducting strategic conversations. Frankly, I want everyone in my firm thinking, talking and relating their work activities to the firm’s strategies for creating customer value and thumping competitors.
There are many potential pitfalls and poor practices that can derail even the best of intentions for strategic planning, and one of the most fatal is restricting the involvement in this process to a select few.
And while I am neither naïve enough or idealistic enough to think that it is practical to have everyone actively involved in all planning sessions, I do believe that good leadership practices open up multi-directional dialogue about strategy and performance.
The best run companies that I’ve worked around ensure that employees pass the “Walk In the Door” test…they can connect their priorities to the firm’s priorities every day that they walk in the door. They also ensure that there are ample opportunities for employees to share ideas, capture lessons-learned, reflect on Voice of Customer and suggest adjustments to execution or even to strategy.
The people in these environments engage in strategic conversations that ensure that the emperor knows if he has no clothes on and that challenge potentially bone-headed ideas or the poor execution practices that derail good ideas.
Charan and Bossidy call this Robust Dialogue. I describe it as a healthy feedback culture, filled with leaders at all levels that get the fact that their chances of success are enhanced if they park their egos at the door and promote and encourage widespread involvement.
Realizing a culture where strategic conversations are prevalent and effective takes hard work on the part of those that lead. Of course, no one said that being a good leader was easy.
How healthy and frequent are the strategic conversations in your firm?