Thursday, October 28, 2010

Strategic Planning: How far out? Are you serious???

I have been doing some work with a couple of clients around building a strategic plan. Usually what they want is a business / corporate / organizational strategy for the next 3 - 5 years. I highlighted the word a above for a very good reason, which I will explain in a second.
However firstly I want to make comment about the concept of a 3-5 year plan, which is dear to my heart as my bank has just asked for one as part of our business plan. It's fascinating that organizations are still thinking like this.

Two days ago I took a client to the Ashmolean Museum in Oxford. We went into the Egyptian section of the museum where the smaller exhibits are all laid out in chronological order. So as you progress around the room in one direction you find yourself going further back in time, or go the other way and you walk forward in time to more modern times. What we noticed was that from about 4000 - 3000 BC, so for over 1000 years there was little change in artifacts found. Most tended to be practical artifacts. Around about 3100 years BC saw the start of hieroglyphics and then things start to change. Much more art and religious objects start turning up. But again they stay fairly similar for hundreds and hundreds of years. Around 2700 BC saw the start of pyramid building. Again there were hundreds of years between real changes, but the changes were starting to occur quicker - a few hundred years as opposed to 7-800 years.
A nice example is the development of glass and the colour blue happen around 3500 and doesn't really start to change until 1500 when glass makers started to dip a mould into molten glass and start to turn it to produce vessels. Then developments start to move at a faster pace. Around about 1400BC they start glass blowing. As you stand in the room you can actually see technologies, thinking and development speeding up and the timelines between innovations and events getting shorter and shorter.
And so back to our strategic plans. 5 years ago everyone did 1,2,3,5 and even 10 year plans.

The question I often ask now is "Tell me what is going to happen in your market / business in one years time?" I usually have the question answered with shrugs - "No idea".
"And you want a strategy for the next three years??" Most of us have a hard enough time understanding what is going to happen in 3 weeks time in our business let alone 3 years.
When I asked my bank manager what the markets will be like and what the bank would be doing in 3 years time a look of panic crossed her face.
What I have learnt is what I wanted or thought I wanted 3 years ago looks naive now, and given what has happened globally feels way out.

The other point - going back to the red a above. Most organisations develop a strategy, singular. One. Does one strategy really give you enough vision to make really good decisions in ambiguous times? More on this next....


lanny goodman said...

the notion that all is ambiguity and therefor planning 3-5 years out isn't valuable misses two important points: 1) the ambiguity spectrum runs from the predictable to the chaotic. there are many dimensions of the business which are entirely predictable and therefor amenable to planning 2) the only thing we can ever be sure about with a plan is that reality isn't going to turn out that way.

If conceive of a plan as an immutable roadmap, then the planning process if flawed. planning is a healthy expression of human intentionality. whether we use it as a set of blinders so we can ignore the changing reality around us or use it as an ordering principle around which we design our activities and a way to keep our over the horizon radar on is up to us.

Platothefish said...

Thanks for this Lanny.
1. Firstly read the book! Sorry not very helpful. Yes I would of course agree that that the ambiguity continuum (P.28 The Ambiguity Advantage) runs from certainty to Chaos. However total certainty (predicable) is actually a theoretic point on the continuum and doesn't exist in reality. Nothing is certain. Just because it happens doesn't mean it's certain.
2. This is what I am saying and makes the point I was. "the only thing we can ever be sure about with a plan is that reality isn't going to turn out that way." therefore planning 3-5 years has it's use but and it's a big but and was kind of the point I was making.
Don't expect your plan to turn out like that. Plan certainly but such long term plans can only ever be an aspirational goal.
Unfortunately a number of organisations I get brought into do actually see it as "an immutable roadmap" and worse align most of their resources and effort into achieving this. In effect trying to force their reality onto the world.
So I think, (I would wouldn't I?) I incorporated those two important points. And it actually sounds like we are saying the same thing.