Is Strategic Planning Still Relevant?
In March 2010, Fast Company ran a piece entitled “Strategic Planning is Dead, Long Live Strategy Execution,” a few weeks earlier the Wall Street Journal declared that “Strategic Plans Lose Favor.” So is strategic planning another victim of the economic tsunami that has washed over the world?
It is easy to jump on the bandwagon and declare that in today’s volatile and uncertain world strategic planning is irrelevant. Amidst all the talk of flexibility, agility, speed and responsiveness, strategic planning seems oddly out of place. After all how useful can a long-term view of future be when our predictive ability is so poor?
However, before we discard strategy lets back up, maybe the problem is not strategic planning itself but the way in which we apply the technique. As Michael Porter author of numerous books that are essentials in the library of any strategic planner commented: “Strategy is a word that gets used in so many ways with so many meanings that it can end up being meaningless.”
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About the Author
David Axson, author of The Management Mythbuster, is President of the Sonax Group, a business advisory firm. He is a former head of corporate planning at Bank of America and was a co-founder of The Hackett Group. He is a sought-after speaker and writer on business strategy and management and is widely regarded as a thought leader in the industry. To read David’s complete biography, click here.
I was always told to focus on the core business but I found a recent blog post that is telling me to do the opposite:
First let me thank you for referring to my blog post on Fast company titled Strategic Planning is dead – Long Live Strategy Execution.
Second I want to completely concur with your observations that strategy and the way it has beed used to refer to almost anything of importance has caused it to lose its meaning.
And yes I agree that knowing what your company stands for is at the core of what strategy is intended to convey. In fact if you read the follow on blog titled “Strategic Planning is Dead – Setting a Sound Strategic Direction is Not” you would see how I address the core underlying objectives of what strategy was intended to create. You can read that blog at http://tinyurl.com/2de3bxv.
Thank you for the good work you do at breaking up management myths. In today’s world it is very needed
I don’t think it so much having to ignore the core business & associated competencies in order to enter new markets, as it is coming to understand the core, underlying purpose of the organization, and how that allows (perhaps impels) the company to serve this purpose and its markets better by extending into new products, services and markets.
Apple is doing so by coming to understand that it’s purpose of changing how the work, thinks and plays (“Think different” is the most recent manifestation of this purpose into a “motto”) does not – and should not – constrict it to being only a computer company.
Think about what the true purpose of your firm is (beyond just making widgets)… and how that purpose might be fulfilled in new, broader ways in serving the marketplace…
In today’s highly competitive business environment, budget-oriented planning or forecast-based planning methods are insufficient for a large corporation to survive and prosper. The firm must engage in Strategic Planning that clearly defines objectives and assesses both the internal and external situation to formulate strategy, implement the strategy, evaluate the progress, and make adjustments as necessary to stay on track.