Culture eats strategy for breakfast,” said recent article in America’s iconic Wall Street Journal acknowledging the power of culture in today’s organisational thinking.
But as Peter Robinson, chief executive of Auckland-based strategy and leadership consultancy Team Management Services (TMS), points out, the essence of strategic planning is for successful organisations to ensure that they are internally aligned with key stakeholder groups in the pursuit of clear goals and values.
The strategic plan is to his mind more important than ever. “The complexity and fast-moving nature of the world heightens the need to plan,” he says. “And greater understanding of the need to better align employees with their jobs increases this importance.”
On the other hand, Robinson accepts that in the past strategic planning has focused more on the development of plan that is easily understood and inclusive – with ownership cascaded down the organisation. “This approach is still valid,” says Robinson, “but greater focus is required on the values and culture of the organisation and the [employees’] ability to undermine or deflect good strategic plan.”
ProjectPlus Group managing director Iain Fraser agrees “economic turmoil” has made the strategic plan more “vital” than ever. It is, he says, important for the board and executive leadership team to “monitor the environment more frequently” and, by using techniques such as scenario planning, identify change opportunities and new directions earlier.
Karen Clarke, president of New Zealand’s Project Management Institute (PMI), believes the strategic plan still holds critical place in the organisational performance armoury but should be regularly reviewed. “The time horizon is important,” she says. “Strategic planning is not operational or annual planning. Overall direction and goals won’t fundamentally change in the short to medium term. strategy that changes every year is not strategy – it’s reaction.”
The New Zealand Institute of Management’s Northern chief executive Kevin Gaunt sees the essence of the strategic plan as “helicopter view” of the (organisational) situation minus preconceptions. “The strategic plan provides leadership,” he adds. “If done well it gives real vision that empowers everyone in the organisation and that is as relevant today as ever.”
Fraser believes today’s strategic plan should focus on developing different levels of strategy, better execution planning, scorecard setting and performance tracking. “With better alignment, the board and executive team can more readily consider timely changes,” he adds.
Organisations are, Clarke says, focusing on their ability to adapt and succeed in constantly changing environment. Consequently, more organisations are “turning to project-based management approaches and structure to execute their strategy”. “These organisations will have enterprise portfolio or programme management offices that guide the processes, allocate resources efficiently and regularly report on progress,” she says.
Gaunt explains the shift in focus by suggesting that strategic planning has “almost become science” with management’s ability to produce vast amounts of data and analysis. “In some cases this seems to get out of hand,” he cautions.
Planners have traditionally concentrated on identifying the organisation’s strengths, weaknesses, opportunities and threats. “Although basic in concept, these four areas are as important today as in the past,” says Gaunt. “They provide focus for managers to discuss and learn about their present and future situation and to reach conclusions about where to head. The trick is not to get lost in the data.”
Is strategic planning timeless management discipline?
Fraser thinks so, but suggests there is often confusion over who owns organisational strategy. In his view, the board should own the strategy, albeit developed in conjunction with the executive leadership team. “There may be confusion over the type of strategic planning management gets involved with,” he explains. “The executive team should focus on short-term operational strategy planning from the organisational strategy and associated goals and objectives.”
What then, according to our experts, are the guiding principles of strategic planning? And, do those who claim to strategically plan, walk the talk?
Robinson is less concerned about the “differing choices” of available strategic planning theory. He wants clarity on who sets the strategy – board or executive – and clarity on who completes the plan and sets the job priorities in line with the plan.
“The strategic plan is road map that is regularly reviewed and refined and is the route to well-defined vision,” he says. “The plan will only succeed if the culture and value of the organisation exist to support the strategic plan.”
Clarke’s guiding principles include:
• Identifying the organisation’s core purpose – asking what the business is and what it will provide.
• Identifying what resources, competencies and skills are required to deliver this.
• Having the decision makers buy in to the strategic plan and commit to deliver it.
• Choosing the right measures to enable effective evaluation of the execution of the strategy.
“Until number one is nailed down, there’s no point in tackling the others,” she says.
Fraser believes the organisation must understand the purpose of the strategic plan and its different manifestations. “Then make sure the planning process cycle exists and the loop is closed,” he adds. “The business decision-making then needs to be focused on strategic goals and objectives and, finally, execution must be integrated across the organisation through matrix approach.
“Today’s needs are for nimbleness and an increased appetite for change,” he says. “Those involved in strategic planning must consider the execution far more than they currently do. Portfolio management anyone?” he quips.
Gaunt thinks New Zealand’s larger organisations take strategic planning seriously, but the vast majority still seem to operate reactively and would, he suggests, benefit from implementing good strategic planning processes.
To his mind, the development of strategic plan is the key role of the chief executive and senior management team. Each person in the team should have the skills and experience to develop strategy for their own area of accountability, be able to see the organisation as whole and contribute to the overall plan. “Carried out well, the strategic planning process builds an innovative and effective lead team in the organisation,” says Gaunt.
“The core elements of the plan are to identify the vision – where the organisation needs to go – and the changes needed to organise to get there,” he adds.
So is the world changing too rapidly to plan effectively?
Fraser agrees the world is changing constantly and faster than ever. “And our purest ways of strategic planning are no longer effective because of the time taken and the incompleteness of the approach.
“But the global market is here to stay and the current economic climate is calling for focus and adaptability by organisational leaders. long-term strategic plan with well-defined goals and objectives remains crucial, so long as it is supported by effective execution and control mechanisms and systems.”
Robinson thinks the strategic planning process is still power-management tool. “I regularly ask myself if what I am working on now is leading me toward the completion of the strategic plan and organisational vision because if not, why am I doing it?”
“Planning is even more important in changing times,” says Clark. “The plan provides the baseline from which to monitor and measure change.”
“True, the world is changing fast which affects the ability to plan effectively,” says Gaunt. “But you just have to try harder because it is more important to plan than not. The more you plan the smaller the changes needed as they occur incrementally rat
