Strategic planning : The grand plan – Why it’s a long term thing

Too often, not often enough, too detailed, too scant… there are as many theories on strategic planning as there are excuses made for not getting around to it. Nobody will argue it’s not important to business success but, equally, nobody seems to have developed definitive model or framework for doing it.
Its focus has to be on change not status quo. That’s according to Bryan Travers who teaches the University of Auckland’s Graduate Business School’s Strategic Planning short course. “Far too much of what is passed off in New Zealand as strategy is not the changes [people] want, it’s actually about maintenance and continuing with what they do.
“Writing strategic plans about maintenance of the status quo is absolute rubbish. What strategy should be about is the changes or the things you want to radically alter. If you’re going to embrace strategy it should be about what cross-functional effort is going to make this organisation better. Therefore it should be about what you are going to change to enhance the organisation not how you are going to hold hands with the status quo.”
Travers says good starting point is to ask what changes you want to make that will secure more customers and warns that too many people write strategy that is internally focused.
“They write it about their processes or the production side of their business when they actually should address what are they going to do for the customer’s experience. They should externalise what they are going to do rather than internalise it. We’ve got lot of navel gazing going on instead of looking at it from the customer’s perspective.”
This is reinforced by Kensington Swan partner Chris Parke who reckons talking strategy provides good start point for organisations to actually follow through. Those that take the time to critically review their existing position, then assess and record what steps they need to take to achieve any particular stated aims or objectives, are more likely to generate the motivation and drive to achieve those stated goals.
But he has cautionary note. “It’s important that such documents or plans must be dynamic in nature, and able to be adjusted in reaction to changes in the market or other external and internal factors. It is also important the plans are not so detailed as to act as almost disincentive to doing anything by being overly ambitious, or lacking in specific detail as to how the particular goals are to be achieved.
“Successful business with clear strategic plan that is being enacted may also be more attractive as an employer and retain or recruit key personnel who can see clear focus and vision is being worked to,” Parke says.
Travers literally snorts when asked how often managers should do strategic plans…monthly, annually? “Never. It’s absolute rubbish this concept that it’s done once year or at fixed intervals. It should be done whenever it is required – and that is whenever there is significant change. That’s when we should reflect on what strategies, or what opportunities, that change provides us with and we should write strategy in accordance with that.”
He says the concept of running strategic plan once year is “utterly bizarre” and “old thinking” along the lines of running strategy in April and budgets in May.
“That type of thinking is so far behind where it should be that it’s not funny. Many of the directors in New Zealand go round prattling on about strategy and being written at this interval with fixed schedule per annum and that’s just nonsense.”
This is what he teaches on his Auckland University short course and even he admits the reaction is usually one of surprise that the strategy process isn’t run to schedule. He’s equally scathing about the results of this approach.
“I see people with 40 page strategic plan and you know instantly chaos will ensue, no action will occur, no change will go in place and the rest of their organisation will think what bunch of twits – fancy going the way of producing rubbish like that.”
Experience helps.
Ken Stevens is seasoned and successful exporter. He established Glidepath in the early 1980s and now sells airport baggage handling systems worldwide. He is also the Export Year 2007 Business Champion.
“Strategic planning has changed for us over the years because we weren’t great planners to start with,” he says. “But with more sophistication in the markets, comes better planning.”
He cites more global outlook, increased knowledge of how markets work and communications as examples of this sophistication. For instance, the internet has revolutionised the way companies plan.
“When I started exporting you had to go down to the library and spend hours there combing through stuff to find out what you needed to know. It’s so much easier these days that there’s no excuse not to do it.”
Asked how often he takes his own advice and sits down for planning session, Stevens is clear: “Not often enough. That’s one of the things I say to exporters – they’ve got to keep tweaking and evaluating their plans to see that they’re working. You have to sit down and be really clear about whether the plan is working, whether it’s doing it for you – and change it if you have to. I’d say nine times out of 10 you change it. With more knowledge of the market as you work with that plan you should be continually refining it.”
He recommends medium term plan (four to five years) and closer in (looking annually) plan and what he calls “three week ahead plan” which stems from working on site to construct system for client. “We have to look and see what we’re going to need and do in three-week timeframe – the absolute dynamic part of the plan.”
Stevens is fan of team approach to planning but admits to then taking time out to consider it solo before going back to the team with any proposed changes. “It’s never one-shot job. You should always have think about it and then come back to round it off.”
His advice to those starting out is to first get things out of their head and onto paper. “It’s quite amazing how many subheadings and little bits of paper you’ll end up with if you brainstorm it. You can then go on from there and address each one, putting some flesh on the bones.”
Romie Littrell, who teaches at AUT says there is pretty much complete lack of strategic planning in New Zealand.
“My area of specialisation is business and leadership across cultures and if you look at the research on culture – this is people in New Zealand – it’s readily obvious that both national and business cultures here don’t tend to support long-range or long-term planning or thinking. Long-term planning is not seen as valuable activity in New Zealand.”
This shows up in “Globe” or global leadership and organisational effectiveness study (see http://www.thunderbird.edu/wwwfiles/ms/globe/) New Zealand was included in the study and one of the Globe principal investigators was here (in late July). He noted, says Littrell, that the cultural characteristics of New Zealand were similar to those of countries that are not engaged in rapid, sustained economic development.
“So you can see our continual decline in the OECD rankings as explained to some degree by the cultural traits of New Zealanders,” Littrell says.
Asked how this can be changed, he laughs and delivers an understated one liner: “Changing culture is not easy.” Having now been here for five years, he believes there are tentative signs of change.
“Part of the change is going to come, I should think, from immigration – you get Asian business people coming here who tend to have longer term orientation than local business people who’ve lived here long time. And you’ll see very gradual change over many years in terms of more emphasis on strategic planning,” he adds.
This long-term view and defining future direction is the key to strategic planning, according to Marta Mager, NZTE’s
director of Export Year 2007.