Advert

Strategy is not planning

Please let me get something off my chest. Strategy is not planning, planning is not strategy and “strategic planning” is the ultimate in managerial muddles.

What about the position of Strategic Planning Officer that companies designate? Well, how can I put it.... They have no idea what they are on about since “strategic planning” is an oxymoron.

We’ve probably all made the mistake, at least once in our working life, since the words strategic planning just roll off our tongue with such ease and everyone seems to talk about such a role as if it were fact but the words strategic planning are an oxymoron.

I jest and toy for effect, and admittedly to grab your attention, but ultimately the point I am trying to make is dead serious and something which managers and business people alike can all benefit from if they understand and appreciate the difference between these two important business terms.

I partly blame accountants for the confusion (I always blame accountants). I say this since most accountants eventually get bored of crunching numbers and posting invoices and eventually aspire to join the higher echelons of top management. I suspect they find strategy, or their interpretation of strategy, as much more exciting and interesting. To be fair, a certain Robert McNamara (US Secretary of State under John F. Kennedy and Lyndon B. Johnson) popularised the practice of planning in the 1960s while working for the US Government when he introduced his programming and budgeting system and this later perverted American business thought and practice with eventually the rest of the business world following suit.

In fact, some 50 years on, planning is still considered as an important business practice and I can see why. Except this doesn’t make it something else: i.e. strategy.

I still suspect that the origins of the muddle between “strategy” and “planning” is the common business practice of budgeting, which is what accountants tend to do a lot of for their managers. The formulation of a yearly budget involves quite a bit of planning and people seem to think that, if you add the word “strategy” or “strategic”, that makes the plan or the budget all the more interesting or even important. In reality, it merely serves to reinforce the myth that strategic planning is real.

I wrote about my understanding of strategy in Times of Malta on June 2, 2011. In a nutshell, strategy is a singular thing i.e. there is only one strategy for any given business, and it essentially consists of a way of playing the game and how a business sets out to win.

For the interested reader on this topic, I would suggest the book The Rise And Fall Of Strategic Planning by Henry Mintzberg, which talks about the “grand fallacy of strategic planning”.

In this book Mintzberg argues that strategic planning is not strategic making. In fact, the author of the book argues that the correct term for “strategic planning” should be “strategic programming”.

Mintzberg actually argues that you can’t formulate a plan or a budget until your business has a strategy in place but that is another subject altogether. My point is that strategy is not planning and it comes before planning is even possible.

If you don’t know where you are going how can you plan for it!

I recently came across a blog by Roger Martin (Dean of the Rotman School of Management at the University of Toronto in Canada) who wrote on the same subject and he advocates that strategy could be understood as an integrated set of choices, namely:

1. What is our winning aspiration?

2. Where will we play?

3. How will we win?

4. What capabilities need to be in place?

5. What management systems must be instituted?

These five questions comprise the essence of what strategy is trying to achieve and why strategy isn’t planning. They are also easy to remember, so it is worth jotting them down on a sticky-note and sticking to your PC monitor.

In conclusion: I think it is important that business people are capable of making the distinction between planning and strategy and using the word strategic programming rather than the misnomer strategic planning. I believe that this clarity of thought and purpose of key business terminology will help those business people trying to compete in the fast-changing and ruthlessly unforgiving world of business.

Get these basic terms wrong and you won’t know your left arm from your right or where you are meant to be heading and how to get there.

Kevin-James Fenech is director consultant at FENCI Consulting Ltd.

Comments not loading? We recommend using Google Chrome or Mozilla Firefox with javascript turned on.
Comments powered by Disqus  
Advert
Advert