How Did Strategic Planning Help During the Economic Crisis?

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How did strategic planning help during the economic crisis?
falseWilson, James W; Eilertsen, Soren.
Strategy & Leadership38.2 (2010): 5-14.

Abstract (summary)

The purpose of this paper is to understand the extent to which organizations were prepared for the economic crisis, the nature of responses, and factors that might explain preparedness and modes of response. The survey conducted in July 2009 and sponsored… [ Show all ]

The purpose of this paper is to understand the extent to which organizations were prepared for the economic crisis, the nature of responses, and factors that might explain preparedness and modes of response. The survey conducted in July 2009 and sponsored by the Association for Strategic Planning, sampled 190 US managers involved in strategic planning within organizations. The survey assessed the role strategic planning played during the recent financial crisis. Key findings include: organizations that used strategic planning to make critical decisions were better able to pursue growth opportunities during the crisis; and organizations that relied on strategic planning during the crisis are more confident about their prospects for near-term growth. Repeating this protocol for a sample of executives who have not taken a particular interest in strategic planning as a discipline would create more confidence that the conclusions can be generalized. The paper suggests to organizations that an embrace of strategic planning in the form of having a regular process, a senior leader in charge, and involving the entire leadership team makes a significant difference in optimism and future outlook. The results suggest that an organization's trust and confidence in strategic planning as a decision-making discipline is a stronger indicator of potential success than the adoption of any particular strategic planning technique or principle.

The global financial crisis continues to be a severe shock to most enterprises. The initial economic downturn, the worst since the Great Depression, has affected almost all sectors of the economy. Everyone and every organization that has felt the pain would do well to ask: - What can one reasonably expect of strategic planning in such a climate of crisis? - What role can strategic planning play in shaping responses? - Do organizations with well-established strategic planning processes fare better than those that are primarily opportunistic? To find answers we surveyed practitioners about how effectively strategic planning practices have served their organizations during the 18 months from the start of the crisis in 2007 to the summer 2009 when there were signs of improvement. Managers in a range of organizations were asked about their strategic planning processes, responses to the crisis, results and outlook. They also responded to questions about specific challenges, and the kinds of changes they intend to make in their strategic planning processes going forward. A major interest of the survey is to understand the extent to which organizations were prepared to deal with the economic shock, the nature of responses, and factors that might explain preparedness and modes of response. We expected to find a positive relationship between a well-established strategic planning process and a relatively high level of preparedness for the downturn. We also expected that organizations with solid planning processes would be able to respond more proactively to the crisis - that is, by taking advantage of opportunities rather than primarily responding defensively. Finally, we looked for what might amount to the Holy Grail for strategic planners - a relationship between a robust strategic planning activity and financial results. Surprised by the crisis

Based on the survey results, it's safe to say that few saw this crisis coming. Asked, "How prepared was your organization for changes in the global economic environment beginning 18 months ago?" only one respondent indicated...
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