The Secrets of Strategic Planning No One Discusses, #3: The Circle of Loss

Secret Number 3: The Circle of Loss

Several years ago, a student of mine was not happy with how strategic planning was being carried out in her organization. She had attended my strategic management class at the university and was working for a large financial services organization in the Chicago area. She realized that this organization, according to my class, was not getting the benefits that strategic planning was supposed to produce. She talked to her senior VP, got him interested, and arranged for me to give him a presentation. The VP liked the ideas I presented to him and sent a very positive email to the head of planning suggesting that he should meet with me as well. No surprise; he never did. He was let go a couple of years later, and the organization appointed a new head of planning. She tried to get the new head of planning to talk to me and…it did not happen either. I will not be surprised if he is let go in a couple of years as well. A new person may later be appointed, putting the company into what I call the “circle of loss” for a long time.

According to a previous article, the lack of interest in even talking to one person who had been recommended by a senior VP suggests that both of these heads of planning could be classified as “gatekeepers” (close-minded, arrogant, insecure, secretive, retains power, conservative, feels threatened) rather than “explorers” (openminded, humble, self-confident, transparent, teambuilder, curious, seeks new ideas). This circle of loss that gatekeepers put the company into can have major implications. On one hand, periodically replacing the head of planning may cause disruptions in the planning process and frustrations throughout the organization. On the other hand, the organization has lost the opportunity to have powerful strategic plans that could have already been implemented and that could be producing strong benefits, giving the company a strong competitive advantage.

One of the big issues is that, as I mentioned in my previous article, CEOs and senior management should be fully aware of what a good planning process should produce and appoint or hire someone who can deliver. This implies that organizations should expend a lot more time and resources to make sure that they make a good “hiring” rather than appointing unqualified individuals and then solving the problem by “firing” them. However, this is not an easy task. Many organizations select individuals who are already working in the organization to be the head of strategic planning. The selection is based on intelligence, analytical skills, and trust. They will also consider experience. However, there are many additional qualifications required to be a successful custodian of strategic planning.

Here are some ideas:

  1. Individual Skills
  • Type of Person. It is important to have an “explorer” type of person for the strategic-planning process to be effective and have the possibility of growing and being a valuable asset to the organization. Having a “gatekeeper” will limit the effectiveness of the planning process and prevent learning and change.
  • There are a great variety of ways to do strategic planning. Experience with effective processes will be of great help; experience with a bad process can be very damaging to the organization.
  • Reputation and Respect. The head of strategic planning should have authority beyond his title. The selected person will have a strong influence on decisions for the future of the organization. It will help if the rest of the organization’s members believe that this person has the qualifications to do the job.
  • Willing to Listen. Organizational members should feel comfortable giving feedback or new ideas to the head of planning. That allows this person to learn how people feel about the strategic-planning process and could contribute to identifying problems or suggesting improvements.
  1. Managerial Skills
  • Strategic Planning. Strategic management is an evolving discipline. It has focused on the analytical part for a long time. Recently, we have been seeing the first steps in developing methodologies that include the processes needed to unify and strategically mobilize the entire organization.
  • Planning Meetings. People from the social sciences found that management teams do not necessarily communicate well with each other. To deal with this problem, they came up with the technique of meeting facilitation. However, meeting facilitation done by people who do not have a profound understanding of the concept of strategic planning can result in decisions that reflect a minimum common denominator.*
  • Industry Analysis. There are many consultants who can do a very good standard industry analysis; however, not too many know how to do a customized industry analysis. Some companies, though, like to do the industry analysis themselves. They are aware that they can better understand their industry if they do it by themselves. The head of planning should know enough about industry analysis to either guide the consultant or help management do it themselves.
  • Group Dynamics. Many activities—either in the strategy-formulation part of the strategy or in the implementation part—involve working with teams or groups of teams. Managing teams and making them think strategically is a science. Managing and coordinating numerous teams that are working on different things that need to come together is a big challenge.
  • Organizational Change. Many companies do their strategic planning first and then give the plans to the rest of the organization for the implementation. Many organizations find problems with the implementation. We need to understand that strategic planning is itself a specific type of organizational change and that formulation and implementation should be approached as such.

* See “How to have a successful strategic planning meeting.” Luis G. Flores and Janyce Fadden. T&D, Vol. 54, No. 1: 31-34, Jan 2000

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