A Few Thoughts About Strategic Planning

by Denny Strigl

Was the importance of long-term strategy taught in one of your college business courses?  In grad school I took an entire course in business strategy and planning.   We spent a complete semester talking about the importance of 3 and 5 year strategic plans.  We read case studies about the strategic planning process in a number of large companies and discussed how critical such planning is to corporate success.  I remember wondering whether the systematic, organized type of strategic planning we were studying really worked in the “real world.”   It all sounded to “academic” to me.

I found the kind of planning taught in my college course was far from reality.  The real business world is filled with far too many uncertainties.  The kind of uncertainties we didn’t completely understand in the classroom.  The reality is that competition, innovation, regulation, taxation and numerous other influences outside your control may require plans to be changed.  Good managers understand the need to be flexible.  They know their plans may need to be changed very quickly. The best managers I’ve worked with were able to anticipate change and, if necessary, shift tactics almost immediately.

In my opinion developing 5 year strategic plans are a waste of time.  I believe the same about 3 year plans.  So, in a highly competitive business what is a realistic strategic planning timeframe?  Some would suggest it’s difficult to plan more than a month or a quarter in advance.  I understand that point of view, but, frankly, find it unacceptable.

I think it is essential to have at least a solid one year plan. Ideally, a two year plan is better.  It should be understood that any plan is subject to change when circumstances change.  I’m sensitive to managers on the front line who ask how it’s possible for them to plan as far as two years out when they are “fighting fires” daily and shifting tactics constantly.  True, it’s difficult to plan ahead when you are fighting to “stay alive”, but if you don’t have goals like revenue growth, customer growth and profit growth, you will have little chance of success….unless you are extremely lucky.  And we all know luck eventually runs out.

Bottom line:  My advice on the subject of strategic planning is to do it.  Keep it real.  Set high standards and achievable goals. Be prepared to make changes quickly.   Keep the timeframes in your plans reasonable.

Stay focused on the Four Fundamentals discussed in detail in Managers, Can You Hear Me Now?

Leave a Reply