HBR: The Big Lie of Strategic Planning

“All executives know that strategy is important. But almost all also find it scary, because it forces them to confront a future they can only guess at. Worse, actually choosing a strategy entails making decisions that explicitly cut off possibilities and options.”

– Roger L. Martin

For those of you in the business of shaping and steering your ventures, but haven’t come across Roger Martin and his work on strategy, you may be well-served to check it out. Martin is the former dean of the prestigious University of Toronto’s Rotman School of Management and an adviser to CEOs on strategy, design, innovation, and integrative thinking. He is a coauthor (with A.G. Lafley, CEO of Procter and Gamble) of Playing to Win: How Strategy Really Works (Harvard Business Review Press, 2013). We’ll have a post on the book, itself, coming up.

This month, Roger Martin’s article, The Big Lie of Strategic Planning, is posted free on HBR’s blog. It touches on common traps leadership fall into as they attempt to develop effective strategy for their organizations, and what to do, instead.

One of the key distinctions Martin makes is that creating a strategy is different – messier, and far less reassuring – than detailed strategic planning. The detailed plan provides the executive with the illusion of control over multiple unknown futures. The downside, as Martin sees it, is that “planning typically isn’t explicit about what the organization chooses not to do, and why. It does not question assumptions.” He continues:You need to be uncomfortable and apprehensive: True strategy is about placing bets and making hard choices. The objective is not to eliminate risk but to increase the odds of success.”

I would qualify that while some of the symptoms described are specific to middle-market and large organizations (smaller ventures rarely have the resources to over-plan to the degree described), the essence of his advice cuts across all sectors and scale of business.


Idea in Brief

THE PROBLEM

HBR-Cover-Jan-Feb-2014-2In an effort to get a handle on strategy, managers spend thousands of hours drawing up detailed plans that project revenue far into the future. These plans may make managers feel good, but all too often they matter very little to performance.

WHY IT HAPPENS

Strategy making is uncomfortable; it’s about taking risks and facing the unknown. Unsurprisingly, managers try to turn it into a comfortable set of activities. But reassurance won’t deliver performance.

THE SOLUTION

Reconcile yourself to feeling uncomfortable, and follow three rules:

Keep it simple. Capture your strategy in a one-pager that addresses where you will play and how you will win.

Don’t look for perfection. Strategy isn’t about finding answers. It’s about placing bets and shortening odds.

Make the logic explicit. Be clear about what must change for you to achieve your strategic goal.


Source: published both in the January-February 2014 edition of Harvard Business Review pp 78-84, and on the HBR blog, here.


– Gary Ralston

© 2014 Ralston Consulting Inc.

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