As I read the article, I found that the authors pointed out many of the misconceptions of the strategic planning process more than the problems with the concept itself. People often mistakenly utilize the process as solely a financial review and confuse strategic planning with budgeting. The article mentioned several examples of companies that realized during the recession that they were not reviewing sales and spending numbers often enough to react to quick changes in their markets. By itself, this realization makes perfect sense as the last two years has been characterized as the worst since the Great Depression. With that said, however, the need to stay on top of budgets has nothing to do with the value of an effective strategic planning process.
Strategic Planning 101
Strategic planning is a process by which an organization defines its strategy to successfully achieve its fundamental purpose. The outputs of the process include high-level objectives (critical improvement areas) and initiatives (action plans to address the barriers that prevent achievement of the objectives). It is a valuable process to assure the organization understands its strategies to improve its competitive position and be successful for many years into the future.
Periodic review is required to (1) assure that the initiatives are progressing as intended; and (2) assure that the initiatives - if they are progressing - are actually resulting in achievement of the high-level objectives. For example, an organization may create an initiative to change its ERP system in order to support the objective of improving inventory management. If the new system is implemented but inventory turns do not improve and stock-outs continue to delay shipments, it may be that the ERP system was not the problem and, therefore, should not have been an initiative. The management team needs to revisit the inventory management system in order to determine how to improve the situation (e.g., identify other initiatives that will result in achieving the objective).
There is no single approach for strategic planning that will work for all organizations. The process must be tailored to the specific circumstances and culture of each company. The depth, frequency, and type of review will be different for everyone, but it must still be done if the organization is to become and remain successful.
Remember the Future
Eliminating the strategic planning process will only serve to increase the number of attention deficit disorder (ADD) companies that already exist. The short-term behavior that has severely weakened so much of western business will continue, resulting in a continuation of dramatic swings in earnings and share price.
Let's be clear - I am not discounting the value of quick decision-making to a business. Problems occur, though, when "quick" becomes "careless." A company can benefit from continually focusing on speeding up decision-making without sacrificing quality. Improving information systems and training can speed up decision-making without putting the company at risk. If this is what a company needs, though, it will become evident through the planning process. Those who believe that strategic planning is a slow process that does not add value are not doing it correctly. If the process is too slow and is not helping the business grow and succeed, it needs to change.
The leader is responsible for assuring that the organization survives the short-term so it can succeed in the long-term. Quick decision-making and frequent reviews can help take care of the short-term while effective planning (and successful implementation of the plans) is the key to taking care of the long-term. Stop strategic planning and you might as well forget about the future of the company.