The Fall and Rise of Strategic Planning

The Fall and Rise of Strategic Planning

by Henry Mintzberg

Harvard Business Review

Reprint 94107

Harvard Business Review

ROBERT H. HAYES AND GARY P. PISANO NANCY A. NICHOLS

REBECCA HENDERSON HENRY MINTZBERG F. GOUILLART AND F. STURDIVANT N. NOHRIA AND J.D. BERKLEY ROBERT C. POZEN

CINDEE MOCK AND ANDREA BRUNO

BERNARD AVISHAI

HOSSEIN ASKARI

RICARDO SEMLER

JANUARY-FEBRUARY 1994 Reprint Number

BEYOND WORLD CLASS: THE NEW MANUFACTURING STRATEGY

94104

SCIENTIFIC MANAGEMENT AT MERCK: AN INTERVIEW WITH CFO JUDY LEWENT

94106

MANAGING INNOVATION IN THE INFORMATION AGE

94105

THE FALL AND RISE OF STRATEGIC PLANNING

94107

SPEND A DAY IN THE LIFE OF YOUR CUSTOMERS

94103

WHATEVER HAPPENED TO THE TAKE-CHARGE MANAGER?

94109

INSTITUTIONAL INVESTORS: THE RELUCTANT ACTIVISTS

94111

HBR CASE STUDY THE EXPECTANT EXECUTIVE AND THE ENDANGERD PROMOTION

PERSPECTIVES TAKING ACCOUNT OF STOCK OPTIONS

IN QUESTION WHAT IS BUSINESS'S SOCIAL COMPACT?

WORLD VIEW IT'S TIME TO MAKE PEACE WITH IRAN

FIRST PERSON WHY MY FORMER EMPLOYEES STILL WORK FOR ME

94108

94110 94102 94101 94112

Planners shouldn't create strategies, but they can supply data, help managers think strategically, and program the vision.

by Henry Mintzberg

When strategic planning arrived on the scene in planning often spoils strategic thinking, causing

the mid-1960s, corporate leaders embraced it as managers to confuse real vision with the manipula-

"the one best way" to devise and implement strate- tion of numbers. And this confusion lies at the

gies that would enhance the competitiveness of heart of the issue: the most successful strategies are

each business unit. True to the scientific manage- visions, not plans.

ment pioneered by Frederick Taylor, this one best

Strategic planning, as it has been practiced, has

way involved separating thinking from doing and really been strategic programming, the articulation

creating a new function staffed by specialists: stra- and elaboration of strategies, or visions, that al-

tegic planners. Planning systems were expected to ready exist. When companies understand the differ-

ence between planning and strategic

Strategic planning isn't strategic thinking. One is analysis, and the other is synthesis.

thinking, they can get back to what the strategy-making process should be: capturing what the manager learns from all sources (both the soft insights from his or her personal experiences and the experiences of others throughout the organization

and the hard data from market re-

produce the best strategies as well as step-by-step search and the like) and then synthesizing that

instructions for carrying out those strategies so that learning into a vision of the direction that the busi-

the doers, the managers of businesses, could not get ness should pursue.

them wrong. As we now know, planning has not exactly worked out that way.

While certainly not dead, strategic planning has long since fallen from its pedestal. But even now, few people fully understand the reason: strategic

Henry Mintzberg is professor of management at McGill University in Montreal, Quebec, and visiting professor at INSEAD in Fontainebleau, France. This article, his fifth contribution to HBR, is adapted from his latest book, The Rise and Fall of Strategic Planning (Free Press

planning is not strategic thinking. Indeed, strategic and Prentice Hall International, 1994).

HARVARD BUSINESS REVIEW January-February 1994

Copyright 1993 by the President and Fellows of Harvard College. All rights reserved.

STRATEGIC PLANNING

Organizations disenchanted with strategic plan- and articulating the anticipated consequences or re-

ning should not get rid of their planners or conclude sults of each step. "I favour a set of analytical tech-

that there is no need for programming. Rather, orga- niques for developing strategy," Michael Porter,

nizations should transform the conventional plan- probably the most widely read writer on strategy,

wrote in the Economist.1

Planners should make their

The label "strategic planning" has been applied to all kinds of activities,

greatest contribution around the such as going off to an informal retreat in the mountains to talk about

strategy-making process rather

strategy. But call that activity "planning," let conventional planners or-

than inside it.

ganize it, and watch how quickly the event becomes formalized (mis-

sion statements in the morning, as-

sessment of corporate strengths and

ning job. Planners should make their contribution weaknesses in the afternoon, strategies carefully

around the strategy-making process rather than in- articulated by 5 P.M.).

side it. They should supply the formal analyses or

Strategic thinking, in contrast, is about synthesis.

hard data that strategic thinking requires, as long as It involves intuition and creativity. The outcome

they do it to broaden the consideration of issues of strategic thinking is an integrated perspective

rather than to discover the one right answer. They of the enterprise, a not-too-precisely articulated

should act as catalysts who support strategy mak- vision of direction, such as the vision of Jim Clark,

ing by aiding and encouraging managers to think the founder of Silicon Graphics, that three-dimen-

strategically. And, finally, they can be programmers sional visual computing is the way to make com-

of a strategy, helping to specify the series of con- puters easier to use.

crete steps needed to carry out the vision.

Such strategies often cannot be developed on

By redefining the planner's job, companies will schedule and immaculately conceived. They must

acknowledge the difference between planning and be free to appear at any time and at any place in the

strategic thinking. Planning has always been about organization, typically through messy processes of

analysis ? about breaking down a goal or set of in- informal learning that must necessarily be carried

tentions into steps, formalizing those steps so that out by people at various levels who are deeply in-

they can be implemented almost automatically, volved with the specific issues at hand.

Call an informal retreat "planning," let conventional planners organize it, and watch how quickly the event becomes formalized.

108

DRAWINGS BY GARISON WEILAND

Formal planning, by its very analytical nature, Planners would have people believe that planning

has been and always will be dependent on the fails when it does not receive the support it de-

preservation and rearrangement of established cate- serves from top management or when it encounters

gories ? the existing levels of strategy (corporate, resistance to change in the organization. But surely

business, functional), the established types of prod- no technique ever received more top management

ucts (defined as "strategic business units"), overlaid support than strategic planning did in its heyday.

on the current units of structure (divisions, depart- Strategic planning itself has discouraged the com-

ments, etc.). But real strategic change requires not mitment of top managers and has tended to create

merely rearranging the established categories, but the very climates its proponents have found so un-

inventing new ones.

congenial to its practice.

Search all those strategic planning diagrams, all

The problem is that planning represents a calcu-

those interconnected boxes that supposedly give lating style of management, not a committing

style. Managers with a committing

Real strategic change requires

style engage people in a journey. They lead in such a way that every-

inventing new categories, not

one on the journey helps shape its course. As a result, enthusiasm in-

rearranging old ones.

evitably builds along the way. Those with a calculating style fix on a desti-

nation and calculate what the group

must do to get there, with no con-

you strategies, and nowhere will you find a single cern for the members' preferences. But calculated

one that explains the creative act of synthesizing strategies have no value in and of themselves; to

experiences into a novel strategy. Take the example paraphrase the words of sociologist Philip Selznick,

of the Polaroid camera. One day in 1943, Edwin strategies take on value only as committed people

Land's three-year-old daughter asked why she could infuse them with energy.2

not immediately see the picture he had just taken

No matter how much lip service has been paid to

of her. Within an hour, this scientist conceived the the contrary, the very purpose of those who pro-

camera that would transform his company. In other mote conventional strategic planning is to reduce

words, Land's vision was the synthesis of the in- the power of management over strategy making.

sight evoked by his daughter's question and his vast George Steiner declared, "If an organization is man-

technical knowledge.

aged by intuitive geniuses there is no need for for-

Strategy making needs to function beyond the mal strategic planning. But how many organiza-

boxes, to encourage the informal

learning that produces new perspectives and new combinations. As the

The goal of those who promote

planning is to reduce managers' saying goes, life is larger than our

categories. Planning's failure to tran-

scend the categories explains why it has discouraged serious organiza-

power over strategy making.

tional change. This failure is why

formal planning has promoted strate-

gies that are extrapolated from the past or copied tions are so blessed? And, if they are, how many

from others. Strategic planning has not only never times are intuitives correct in their judgments?"3

amounted to strategic thinking but has, in fact, Peter Lorange, who is equally prominent in the

often impeded it. Once managers understand this, field, stated, "The CEO should typically not be...

they can avoid other costly misadventures caused deeply involved" in the process, but rather be "the

by applying formal technique, without judgment designer of [it] in a general sense."4 How can we

and intuition, to problem solving.

expect top managers to be committed to a pro-

cess that depicts them in this way, especially when

The Pitfalls of Planning

its failures to deliver on its promises have become so evident?

If you ask conventional planners what went

At lower levels in the hierarchy, the problem be-

wrong, they will inevitably point to a series of pit- comes more severe because planning has often been

falls for which they, of course, are not responsible. used to exercise blatant control over business man-

HARVARD BUSINESS REVIEW January-February 1994

109

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download