Re: Strategic Planning Out-of-date? LO3585

John O'Neill (
Thu, 2 Nov 95 14:11:59 +1100

Replying to LO3568 --

Kurt Plowman in LO3568 wrote:

Strategic planning has been around organizations for years. For many
months each year, managers gather in long sessions to update the
organizations five year plan with the latest hot-button projects.
Basically, traditional strategic planning as we know it is outdated. It
not only limits innovation by locking an orgainzation into one or two
courses of action, it often lacks flexibility. Unplanned changes are
inevitable, and traditional strategic planning only gets it the way of
dynamic changes.

Any comments, ideas, or insights? What alternatives to traditional
strategic planning exist or are being used in organizations?

*** end of quoted msg ***

The biggest question is "what is the purpose of strategic planning?" I've
worked in companies that have performed the process you have described,
disseminated the plan at an executive level, and locked up the plan until
the following year (I was actually criticised for not _knowing_ that the
plan existed, and finding it for myself !!!)

Peter Senge in the 5th Discipline talks about a different type of
strategic planning for a LO and uses Royal Dutch/Shell as an example. This
type of strategic planning looks at where the world is today, and what
possible directions the world may take. It examines both organisational
and environmental factors, with environmental factors being most
important. An example of an environmental factor for Shell is back in the
early 70s, what effect would an oil cartel have on oil prices and demand
(what would happen if "OPEC" formed).

This form of strategic planning is called scenario planning and is quite
useful for exploring what could happen in the future. The aim of this
planning is to define signposts (trigger events, warning events), shaping
actions, and hedging actions. The signposts are ways that indicate to you
that the future may look like scenario x. Shaping actions are preemptive
actions your organisation can take to shape the environment, and position
itself to take advantage of scenario x. Hedging actions are reactive
actions your organisation will be "forced" to take if there is no warning,
and things suddenly change (like the end of the Cold War).

Further information about Shell's use of scenario planning can be found in:
Geus "Planning as Learning", Harvard Business Review, Mar/Apr 1988, p70-74
Wack "Scenarios: Unchartered Waters Ahead", Harvard Business Review, Sep/Oct
1985 p73-89
Wack "Scenarios: Shooting the Rapids", Harvard Business Review, Nov/Dec 1985,

The key to strategic planning is to think about the environment (or the
real world) in which your organisation operates, and start thinking about
the types of things that may change in this environment, and how these
changes may impact the way you do business, and the type of business
you're in. Ideally, strategic planning is something that you should be
doing ALL THE TIME !!!

Scenario planning is by no means the only form of strategic planning. There
are 30 planning tools discussed in:
Webster, James, Reif, Bracker "The Manager's Guide to Strategic Planning
Tools and Techniques", Planning Review, Nov/Dec 1989, p4-13.

Finally, a technique that I find quite interesting is one produced by RAND
called Assumption-Based Planning (Dewar, Builder, Hix, Levin, MR-114,
1993). Assumption-Based Planning is similar to scenarios in that it is
all about defining the "ends" the organisation wishes to achieve by
firstly investigating signposts, shaping actions, and hedging actions. The
most interesting part of this approach is that it attempts to EXPLICITLY
track the assumptions used during the analysis (or strategic planning)
process. The neat trick about this approach is that it then becomes easier
to track back and look at what happens if an assumption is invalidated.

I can go on and on - I'm much more interested in hearing about whether
other memebers of this list think strategic planning is a worthwhile
activity in LOs, and if so, what techniques they find most useful (and

John O'Neill
DSTO C3 Research Centre, Australia