Tweet

Strategic Planning Smothers Innovation

Guest post by: Jim Clemmer

Article Overview: From a standing start, a financial services company had two decades of very strong growth. They were entrepreneurial and opportunistic. New products, services, and distribution channels evolved and developed as the leaders passionately pulled the organization toward their vision. But its growth wasn't always a pretty sight.

Strategic Planning Smothers Innovation

"How far would Moses have gone if he had taken a poll in Egypt?" - Harry Truman, thirty-third American president From a standing start, a financial services company had two decades of very strong growth. They were entrepreneurial and opportunistic. New products, services, and distribution channels evolved and developed as the leaders passionately pulled the organization toward their vision. But its growth wasn't always a pretty sight.

Product and service ideas seemed to come from the wrong people, at the wrong time, in the wrong ways, and for all the wrong reasons. Often they had to be developed on a shoestring budget or using the philosophy of "make a little, sell a little, make a little more." However imperfectly, customers were well served, product leadership was established, and in key markets, dominance was achieved.

Then senior management changed. The original, fairly well balanced, senior management team was eventually replaced with Technomanagers (focused on management systems and technology). When they looked back at the twisting and turning paths left by product development and marketing, they were determined to "bring some order to this craziness." These were "processes out of control", management declared.

So a Strategic Planning Committee was formed. It consisted of fifteen senior managers and support staff from quality improvement, customer service, accounting, marketing, human resources, and planning. They surveyed, researched, collected data, discussed, analyzed, diagrammed, and planned marketing strategies and new products. They wrote a powerful vision, values, purpose, and strategic planning document that could have been a business school case study.

Each thoughtful new product and marketing campaign took off with a bang...and then slowly fizzled. None were outright failures. But the company's history of ever-rising sales success flattened out. Key people started leaving. Passion and energy levels slowly sank. Today, the company is struggling to catch up with its changing markets and ever-stronger competitors.

McGill University management professor, Henry Mintzberg has been extensively studying, teaching, writing, and consulting on management effectiveness, strategy formulation, and planning since 1968. His book, The Rise and Fall of Strategic Planning, reports on the exhaustive research and thinking he's been doing on this popular management technique.

In a passage on neurotic and compulsive management he writes, "above all, the machine organization (what I call Technomanagement)...is obsessed with control, first of the workers, but everyone else after that...all this is done to ensure the stability of the operations and the smooth functioning of the bureaucratic machine." He concludes that the biggest reason strategic planning doesn't work stems from "the planning school's grand fallacy: Because analysis is not synthesis, strategic planning is not strategy formulation (his emphasis)...ultimately the term strategic planning has proved to be an oxymoron."

The new senior managers at the - now mediocre - financial services company, proved to be caretaker or maintenance managers. They fell into these all too common strategic planning traps:

Strategy formulation was treated as a separate task. It isn't. No matter how much time and analysis we give it, no committee, staff support professional, consultants, or brilliant strategist can develop an effective strategic plan in isolation. Strategy is an interactive process. It might be separated from daily management, but it can't be separated from leadership. It is leadership.

Management committed the classic blunder of applying logical hindsight when they looked back at a series of opportunistic and serendipitous product and market innovations.

Adding up all the time the fifteen Strategic Planning Committee members spent in the market either finding or serving customers, produced a total of less than ten percent for the whole group. Theirs was an artificial world of budgets, plans, analysis, strategies, concepts, theories, and numbers. The valuable experience of the sales, service, and field support people who lived in the marketplace with customers, were reduced to aggregate data points, opinion survey categories, and disembodied quotations on questionnaires.

Senior managers lost the rich learning, opportunistic, and urgent nature of evolving their strategies "on the fly" in the market. Effective strategic opportunism, like effective servant-leadership, both leads and follows.

Effective planning is a critical success factor. But the focus and type of planning is what's critical. Two types are needed. First, personal, team, and organization planning should focus especially hard on improvement. This critical planning establishes systems and processes to continually build and improve understanding, skills, and competencies. So when those unexpected opportunities come along that fit your vision, values, and purpose, you're able to capitalize on them..

The second type of planning is implementation or action planning. It's disciplined, short term (today, any detailed action planning beyond two years is ludicrous) and centered on annual goals, monthly or weekly priorities.

Related Articles
  Five Resounding Reasons to Review Your Strategic Plan
  A Fresh Approach to Obtaining Global Perspectives on Corporate Strategic Planning
  “The Top Ten Reasons Strategic Planning Meetings Fail, According To Your Strategic Thinking Business Coach”
  “Eight Key Characteristics For A Strategic Planning Facilitator, According To Your Strategic Thinking Business Coach”
  Clearing Up The Myths About Strategic Thinking and Planning
  Strategic Thinking What Does It Really Mean
  More on Strategic Planning What Do You Think
  How to crystalize business growth options through Strategic Planning
  Year End Strategic Planning - To Plan or Not to Plan - That is the Question\"
  “A Major Communication Tip For Successful Strategic Planning – Provide Definitions of Major Strategic Planning Terms As You Begin”
  Innovation and Entrepreneurship
  “Ten More Benefits From Strategic Planning, According To Your Strategic Thinking Business Coach Ten More Benefits From Strategic Planning, According To Your Strategic Thinking Business Coach”
  How To Hone Your Strategic Thinking Skills To Plan For The New Business Year, According To Your Strategic Thinking Business Coach
  Strategic Planning
  More On Strategic Thinking
  20 Tips To Initiate & Inspire Innovation From Your Strategic Thinking Business Coach
  Spray and Pray The Substitute for Strategic Planning
  How to Avoid Business Failure
  Seven Benefits Of Strategic Thinking And Planning For A New Year According To Your Strategic Thinking Business Coach
  Strategic Thinking Planning for Nonprofit Organizations

Article Tags: leadership
Referred by: http://www.searchengineworkshops.com



Related Forum Posts
Different Hats - CEO Sales & Marketing & Leadership Development Company Strategic Vision 10 Alliances & Growth Strategies 10 Hiring & Managing People 8 Mentoring 8-9 Strategic Planning for Clients 10 Execution of Marketing Campaigns 9-10 (i have great people who do the nitty gritty) Financial Management 9 Bookkeeping 3 (outsourced as I really hate the fine details like GST0 Administrative Follow Up 6-7 (again have great staff) Writing & Publishing 9 (getting better all the time!) Speaking 10 (so I have been told) Self Promotion 9-10 Web development & Promotion 6-7 (learning more and have brought on players who are 10+) Babysitting Employees (1 - wont do it, that's why I work so hard to hire and motivate the people I have) Great topic Kevin!! Jude
Re: LEADERS - Nice post, i like the Doers and the listeners comments from my handbook 8.5 HOW MUCH DO YOU KNOW ABOUT LEADERSHIP? Planning Problem Solving Vision Innovation Leadership Emotional Intelligence Delegation Communication Self-Development Relationship Building Commercial Financial skills Personal Energy Ethics Transparency Even there I see that we are missing "PASSION"
HRPreneur - Hi everyone, I am new to the forum and I recently started my own Human Capital (HR) consulting firm called HRPreneur Inc. HRP focuses on making human capital a strategic differentiator for SME's. Below is a summary about HRP; Who We Are: HRP is a Human Capital consulting firm with 30 years of experience that becomes an extension of your company by providing a full array of services to help you create a highly engaged workforce focused on achieving strategic results in order to build a long lasting great company! Mission: HRP provides small and medium sized businesses a Strategic HR Business Partner to increase employee engagement, resulting in cost savings, increased productivity and results at an affordable rate! Vision: To inspire and warrant SME's reach their full competency! Cost Effectiveness: We provide over 30 years of experience at a fraction of the cost at a strategic executive HR business level You will save between 50% to 60% in costs per year on salary, bonus, benefits, training, office space alone We will provide you additional cost efficiencies through our services Services: • Strategic Human Resources Planning • Organizational Redesign • Change Management • Organizational Culture Development • Employee Engagement Programs • Leadership Assessment and Development • Compensation Design • Talent Acquisition • Assimilation and On-Boarding • Performance Management • Talent Management & Succession Planning • Human Resources Due Diligence • Human Resources Audit • Full Service HR Outsourcing
Re: How do you make the most of your day? - Planning, To Do lists, and deadlines all help me. Also being self critical of my own time management helps me raise the bar. I still check email too often though.
Re: Essential Leadership skills - Vision Values Mission Strategic Thinking Decision Making Communication Team Bonding People Development Coaching / Mentoring / Guiding / Grooming Presentation Thanks Robert


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Expanding Your Business By Franchising

Designing Employee-Enhancing Training Programs

Working Across Borders

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.