Strategic Plans Lose Favor
There are two issues in the article: strategy being dead and strategic planning does not always work. From the article, it is mention that companies have long planned for changing circumstance and change the rigid forecast of the past, the CEO decided to review and update the budget every month rather than a half of year or quarterly to make the companies know what are the costomser's needs. And that is one of their strengths from the SWOT: to know what is needs for costomsers.
The WSJ article quotes, “a few even set up “situation rooms,” where staffers glued to computer screens monitored developments affecting sales and finances” – this is a clear symptom of the argument above. They are worried about revenues (sales) and expenses (finances), not strategy. It also quotes Accenture saying, “Strategy, as we knew it, is dead. Corporate clients decided that increased flexibility and accelerated decision making are much more important than simply predicting the future”, and Boston Consulting Group as saying, “more business leaders will start to rely less on static five-year strategic plans and more on rough “adaptive” strategies that consider multiple scenarios”. The point is simple: if your strategic plans did not have risk assessments and contingency plans for each identified risk, such as recession, decline in demand, low pricing power, supply failures, and so on, then all you were doing was financial planning as usual – there was nothing “strategic” about it other than, probably thelong horizon.
This Wall Street Journal article also mentions that, when the economy is down, or when there is high volatility, media stories will quote people making rash statements like strategic planning is dead. Do not take this stuff too literally. Unfortunately, many people will do just that. If the read nothing further, and take away only that nugget, they may decide to toss strategic planning overboard and that will be the threats to the companies.
The WSJ article quotes, “a few even set up “situation rooms,” where staffers glued to computer screens monitored developments affecting sales and finances” – this is a clear symptom of the argument above. They are worried about revenues (sales) and expenses (finances), not strategy. It also quotes Accenture saying, “Strategy, as we knew it, is dead. Corporate clients decided that increased flexibility and accelerated decision making are much more important than simply predicting the future”, and Boston Consulting Group as saying, “more business leaders will start to rely less on static five-year strategic plans and more on rough “adaptive” strategies that consider multiple scenarios”. The point is simple: if your strategic plans did not have risk assessments and contingency plans for each identified risk, such as recession, decline in demand, low pricing power, supply failures, and so on, then all you were doing was financial planning as usual – there was nothing “strategic” about it other than, probably thelong horizon.
This Wall Street Journal article also mentions that, when the economy is down, or when there is high volatility, media stories will quote people making rash statements like strategic planning is dead. Do not take this stuff too literally. Unfortunately, many people will do just that. If the read nothing further, and take away only that nugget, they may decide to toss strategic planning overboard and that will be the threats to the companies.