As much push-back as Jeff and I get when we suggest strategic planning doesn’t work, I sometimes forget that there are many in the mainstream business press who say similar things.
Donald Sull has an article in MIT’s Sloan Management Review that makes some of the exact points Jeff and I have been making. He begins his article with a refutation of strategy as a linear process. If you think of it as linear (create strategy, then implement strategy, then evaluate what worked), you end up saddled with huge limitations. For example, it’s hard to let new or contradictory information in mid-process, and commitment to plans can escalate quickly (and dangerously). Most managers, he argues, work around these limitations by adopting an interesting management philosophy: make your best guess, and place your bets.
Sull argues (and I agree) that there is an alternative. Strategy should be considered an iterative loop, rather than a straight line. The loop, quite simply, includes four pieces: make sense of your situation, make choices about what to do (and not do), make those things happen, and then make revisions based on new information. Jeff and I tend to frame it a bit differently, although we agree with Sull’s basic premise. What I really liked in the article, though, was Sull’s emphasis that this different approach to strategy making needed to exist throughout the organization:
These steps can be embedded within formal processes, such as strategic planning [noooo!--jn], budgeting, resource allocation, or performance management, but they should also be contained within the myriad informal conversations that fill out the typical managers’ day. And these discussions should not be concentrated at the top; they must take place at every level of the organization. Strategy will remain stranded in the executive suites unless teams throughout the organization can effectively translate broad corporate objectives into concrete action by making sense of their local circumstances, making choices on how best to proceed, making things happen on the ground and making revision in light of recent events.
Incorporating this concept throughout the organization is the key. Strategy has to live everywhere. It’s everyone’s job. But you can’t just announce that to your people in a memo. You have to actually look at the way you run things in your organization to ensure that everyone, at every level, has the capacity to do the work of strategy.
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