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Strategic Planning: Does it work?

Two Development Assumptions Summarised

We want to make it clear we are committed to thorough, effective and well formed strategies. We advocate that businesses develop disciplines that bring their thinking and planning and aspirations to good effect. There is nothing in this article to challenge or question that. What we do question is not whether the development of thorough strategies is a good and necessary thing but rather how we might go about it. We also question some of the methods and approaches that have been inherited and are assumed to work. As you will notice, we make our case contrasting two approaches to strategic thinking, one we describe as the Conquest Assumption, the other we describe as the Relationship Assumption.

The Conquest Assumption

The Conquest Assumption

Try and imagine yourself back to the middle of the twentieth century and specifically to the 1940s. The Second World War is over and nations are seeking to rebuild. Much has been learned that has built upon thinking and practice that developed before the war and, as a result of that terrible global conflict, lessons were learned about conflict management, decision-making and so forth. All of this is understandable. At the heart of this was the notion that so much could be summed up in a capacity to develop reasoned arguments. So where it was possible to advance and argument based on reason, all would be well.

Take this thinking a little further and locate it in the idea of conflict management (given that we are trying to imagine ourselves back to the end of the Second World War) and we find ourselves anticipating a more or less known “enemy”, seeking to out manoeuvre them or confront them directly. There is a kind of symmetry or balance or at least a known and obvious enemy. Everything led to the assumption that it was possible to provide reasoned argument and well-ordered strategies.

Along the way, we find the word “plan” is attached to the word “strategy”. If this strategy is in practice about having an overview of an aim or series of objectives, then a plan is describing the means by which we might deliver the strategy. All good stuff. I am sure many feel very comfortable with the idea of connecting these two words as “Strategic Planning”. There is nothing wrong with strategic planning as such. It is just that you can only plan what you or someone else already knows. In other words to plan is to use experience and knowledge. It goes well with reason.

So what happens, if what is envisaged hasn’t been done before? Planning can only go so far?

And what happens if it becomes difficult to reason whether and how this or that might happen. In other words, what happens when the competition cannot be clearly identified or when the market is unclear or whatever. If we can reason and plan and anticipate in development, that’s great. In the work we have developed we call this the Conquest Assumption. It is when we sit down one day and write a five year business plan for taking over the world, anticipating a whole range of factors - good and bad - and developing an awesome vision. Fantastic!

There are loads of conventional tools to help with this process. Our difficulty is that, as far as well can see there is very little evidence to actually establish these conventional tools of development work in and of themselves. Sure we know lots of people will say they work and yes many strategic planning tools are deployed as a matter of convention. It is just that, on the basis of our own work and thinking, the Conquest Assumption and associated tools are not quite so appropriate as the 21st century advances. So let’s look at an alternative.

The Relationship Assumption

The Relationship Assumption

The difficulty is that really very few arguments are the product purely of reason. Virtually every argument you can think of is informed by a balance of the evidence in terms of what can be demonstrated or by a set of beliefs. Knowing what is true has long been known to be the product of this balancing of evidence and belief. In business our strategic decision-making is no different. Hardly any decision is the product of pure reason. Buried within virtually every decision, even from the most rational person is a hunch, a belief, an insight about the right way. Check it out. Use your own experience to test out what is being said. In fact we argue that sentiment, the feeling we might have about this or that is one of the greatest influences in decision-making. It is just that we are taught in the Conquest Assumption to dress everything up as reason.

It is our argument that the more asymmetrical environments are, then the more decision-makers are reliant upon their beliefs, insights and intuition. The more decision-makers are reliant on such factors in decision-making then the importance of relationships also increases in three ways:

  • With the operational context
  • With key partners
  • With clients/customers as collaborators not consumers

Of course there has to be a transaction going on in business. This business had to sell something to that business and so on. What we are arguing is that the greater the asymmetry, the more development emerges from a quality of relationship. We can’t simply develop market share, imposing a particular product or service in different contexts. We can try of course, but the evidence indicates that development is dependent on a quality of relationship against those three dimensions of operational context, key partners (including colleagues) and clients/customers as collaborators.

It may be you disagree with our argument for the Relationship Assumption. That’s fine. But just consider your own decision-making within our own life experience. You might be swayed to buy a great product or service but if you have two identical offerings you might buy, one delivered by someone you like and trust and one delivered by someone you don’t know at all. Imagine these two offerings are the same price. Which one are you likely to buy?

I think we all know the answer to the question. And so I invite you to consider the degree to which you implement the Relationship Assumption in your own strategic decision making and the degree to which instead you are reliant on old ways for another time?

Understanding how our Decisions are Regulated

In our own work at Innovation People, we have learned that understanding how our strategic decision-making is influenced and regulated is critical to making great decisions. We have developed simple, practical tools to increase the quality of your own decision-making, if you would like to use them. They will help you implement and maximise the benefit of the Relationship Assumption.