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Strategic Routes
After a decade of downsizing, strategic planning is making a comeback in the organization. But the new strategy has little in common with the command-and-control methods of past business.
Corporate Planning Adapts to Changing Business Realities
A STRATEGIC PLANNING RENAISSANCE is emerging in corporate America. The new methods are abandoning the authoritative mindset of centralized planning for a style fitting the turbulent commerce of the ’90s.
Today, the task of charting a future course has been dispersed throughout the organization. Every employee, customer, and vendor holding vital information has a role to play in the process.
This outward, “democratized,” approach has arisen from necessity. In the 1980s, many companies found that traditional strategic planning did not fit the rapidly evolving rules of business, embodied in unpredictable markets, rapidly emerging foreign competition, new technology, globalization of labor and trade, and other trends.
Senior managers once mapped out strategies in isolation, and often without the “in-the-trench” knowledge of market changes, arising threats, internal ability to execute, and competitor developments. The plan took months to draft and accumulated in a weighty document that was often obsolete before distribution. This cumbersome strategizing was impractical and dangerous in a world where product life cycles were measured in months rather than years.
Over the past decade, many theories and techniques have been arising to address these challenges. While they embody diverse philosophies, many are based on common trends in the market. Your business should consider these themes when forming a plan:
Broad participation.
All levels of the organization can contribute meaningfully to planning. Insight from frontline staff is essential, as they are operating nearest the action and usually feel the early winds of change. They also may have practical insight regarding problems or conflicts that may arise during implementation.
Quest for new opportunities.
Market forecasting and other number crunching is important. But, todays strategic planning does not revolve around quantitative activities. Rather, your firm might explore intangibles, like identifying and testing unconventional avenues of growth.
One such concept involves the business ecosystem — a network of customers, suppliers, and rivals who cooperate with specific aims in mind. Their shared motives might include improving applied technology, opening an entirely new market, creating a sub-industry and sharing research. These parties co-evolve by feeding off each others resources, information and discoveries.
Cross-disciplinary team.
By combining diverse functions, skills, and experiences of its employees, a firm applies “think tank” planning that encourages cohesiveness.
Such alliances may unveil open space opportunities — market niches previously unrecognized because they didn’t exactly match the competencies of any business function. From a team perspective, however, these opportunities are more easily defined and developed.
An external perspective.
Customer experiences, competitor moves, and industry developments should influence planning more than internal factors, such as budgets and past policy. Customer surveys, focus groups, sales force input, and other intelligence gathering helps you identify strengths and weaknesses within the firm. This feedback also can lead to policies which encourage flexibility and responsiveness.
Managing the process.
Don’t carve the strategy in stone. Think of it as a starting point for flexible navigation. And don’t leave the process to itself. You should continually compare actual results to expected outcomes — and make mid-course adjustments as needed. This approach demands an efficient, two-way flow of information through the hierarchy of management.
Creativity over analysis.
As markets, technologies and strategies become less predictable, a firms planning emphasis must change from projecting the future to reshaping it through innovative and ambitious initiatives.
This orientation encourages creative thinking among those involved in planning. By making a conscious effort to challenge, and even destabilize the status quo, the organization creates an environment ripe for generating major strategic shifts. To fulfill this role, a leader must be willing and able to move against internal and external currents. Accordingly, you should remain intimately involved in the process so that you can direct the major activities of business strategy.
In its highest form, strategy-making is a perpetual and seamless management activity. But this capability is refined over time, and through considerable thought, sweat and risk-taking. Your strategic approach may not appear efficient at first. But the tangible gains will come.
Perspectives will also change. When leaders begin to crunch more ideas and fewer numbers, they can change rather quickly.
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