Images: Courtesy of Music Philosophy (Mico, you rock!)
Strategic Planning was born around 100 years ago when the first cars went into mass production: The lack of product was vast and the economic landscape easy to oversee, making it easy for companies to adjust to changes immediately. Markets were slow and people believed humans can achieve anything, supported by Strategic Planning. This mechanical view of the economy and an enterprise left the role of Strategic Planning almost untouched and its importance has even grown over time.
Problem is: The world enterprises operate in has dramatically changed. In a world of saturated markets, educated people playing their consumer role rather unwillingly, globalization, terror attacks, ash clouds, etc. Strategic Planning becomes a farcical endeavor. Maneuvering an enterprise has become an illusion. But we continue to plan.
Strategic Planning is a waste of time
Successful companies are highly flexible and adaptable in an ever-changing world and market. That’s the opposite of a plan: focusing on getting something done in a certain amount of time.
Let’s just have a look at the US government: Every year they plan on paying down the debt – and every year they face new surprises: high unemployment rate, a Supreme Court decision, an oil spill. Immediately, all the Strategic Planning is out the door and projections have to be adjusted. Planning is not forward-looking, Planning is static and reactive.
Same is true for enterprises: The performance of a company is more often than not influenced by factors out of their influence sphere: price of commodities change, currencies fluctuate or a banal law changes somewhere in the world and affects the performance of the enterprise – once again, projections have nothing to do with reality. This results in permanent frustration. And, companies develop the tendency to find someone to blame: Purchasing, Sales, Product.
Anyone who still hopes to control the future with numbers has no clue how markets work nowadays, doesn’t know how you can get optimal performance out of all stakeholders or just lives in a perfect world, fueled by selfish wishes and hopes.
Executives don’t like change
The idea that executives don’t maneuver the enterprise through the stormy seas (Actually, it’s the other way around.) doesn’t fit in their MBA-fueled pipedreams of being the sole savior of this struggling ship. A myth born in the Industrial Age. In addition, executives believe they need Strategic Planning to control their employees. At its core, most managers believe their employees are lazy bums that can’t be trusted. (Honestly, without me they just wouldn’t do anything all day.) For that reason, employees need to get clear goals and constant observation.
Peter Drucker’s Management by Objectives (MBO) gave executives more fodder for their bizarre prejudice that people without objectives have no clue what to do. People wouldn’t work efficiently without planning goals. This resulted in an enterprise world gone crazy: Increase revenue by 13%, reduce costs by 12%, service has to increase their number by 10% for the next 5 years. Totally absurd. We call it: Management.
Shift power from executives to all stakeholders
This absurdity we call management has to be replaced with a new paradigm:
- Focus on relative goals
- Empower your employees by trusting them 100% and allow them to react individually to demands of stakeholders
- Focus on culture
Don’t stick to numeric goals: Would you want a NASCAR driver to win a race or plan for him to drive the race in 2 hours and 32 minutes? Foster a culture where it’s about winning not making numbers.
If a department/division/branch has problems, don’t let the executives take over. Stakeholders have to find their own way out of the mess and don’t need the savior from headquarter. This might leave the executives with less opportunities to congratulate themselves but will increase team morale dramatically. The role of leadership has to be be redefined: It’s not about controlling people. That breeds resentments. And crushes spirits.
It’s about inspiring people. Engaging them. Executives need to lead, not control.
Redefine enterprise success
Executives have to throw away their outdated Org charts, their hierarchy thinking and the focus on their selfish goals. The new enterprise places stakeholders on the pedestal, makes humans not plans their focus. Once you place your trust in all your stakeholders and empower them, goals like shareholder value, executive salaries and bonuses will fall into place.
Enterprises need less goals, not more. Goals are overrated. Real success metrics are an organic byproduct of a real corporate identity. It shouldn’t be about corporate goals determined by a few, it should be about corporate identity lived each and every day by all stakeholders. Focusing on corporate culture will help enterprises to develop a congruent group of like-minded people. Forget the performance review. Lean on peer pressure as the guiding force.
Strategic Planning vs Being Prepared
Strategic Planning means: Derived out of an executive vision of the future and assessment of the present, the company develops a plan that everybody has to follow blindly. Enterprises based on this belief try to manage the future.
Being Prepared means: We’re trying to be ready for any eventualities, we prepare, we’re staying intellectually fit, always question everything – never separate acting from thinking. Being prepared is an attitude. This attitude will allow companies to be successful in the future. Strategic Planning dooms them.
Strategy has its roots in the military. Even the military doesn’t need mindless warriors anymore
The idea of Strategic Planning was based on the thought construct that there are two kinds of people: The thinkers, the directors, the controllers. And the mindless workers that do their task and don’t ask questions. Strategy is a tool to keep the doers from thinking and under tight control.
Since the markets control enterprises more efficiently than managers, what’s the value of managers hiding behind strategy decks anymore? Instead, every stakeholder has to think, adjust and do. What company still can afford to employ non-thinking people, happily entrenched in operations? That’s what automization is for.
Perpetual Test Mode
Enterprises need to ask themselves constantly “How could I do this better?” even when everything works out fine right now. Once enterprises believe they’ve found the perfect model, they will switch into the mode “Why change anything?” And die.
Enterprises need to follow two paths:
- Implement perpetual, incremental improvements. Why not improving a dozen of little things? Can you improve your website daily outside of the yearly refresh? Can you change the way customer service interacts with people? Are your key employees fully invested on Social Media Channels, always ready to reply? How can you move your company from good service to utter delight?
- Think big: Some problems can’t be solved with incremental changes. They need significant innovations. How can you leap ahead of your competitors by rethinking how a problem can be solved?
How to begin the transformation process
This is an unusual paradigm for enterprises. Everything they learned in business schools and on wooden conference tables is useless. Even more: counter-productive.
It behooves every employee to internalize this new world view. And start to develop multiple pilot projects or beta programs. A good first step would be to eliminate the yearly performance reviews and axe yearly planning.
Let’s face it: the world was not meant to be perfect and nobody can control it. We’re supposed to muddle along and work our way through challenges and problems. Once enterprises accept this fact, they have a chance to succeed in the future. Most importantly: As long as managers don’t trust all stakeholder, as long as they don’t believe people will work without control and incentives, just because they want to, as long as managers don’t change their thinking, enterprises will remain the places of outdated hierarchy, intellectual imprisonment and planned economy.