Insight and Limitations

Each of these innovations have brought excitement and insight for strategic planners, but each also has its limitations and planners that adhere to any single approach can become rigid in their discipline. No one approach works for every organization every time. The following analysis reviews some of these limitations, harvests the insights gained by observing planning in practice, and suggests future innovations in strategy creation.

Advantages and Limitations. Traditional strategic planning is a planning approach with familiarity, an abundance of practicing professionals, and many experienced leaders. It is an easy “go to” approach that many can do well. In addition, traditional planning gets people out of day-to-day operational mode to thinking about, envisioning, and doing something about the future – very important to do this, at least occasionally. The methodology flows logically from step to step and is easily explainable. The approach, however, is limited; it often requires a command-and-control approach to leadership, management, and organizational structure and dynamics. In many cases, plans get shelved as they age as traditional strategic planning is generally episodic and not an ongoing organizational process. And even worse, the lack of adaptive planning and course corrections can set organizations off course, cause mission drift, and take too long to recover proper direction being less responsive to changing environments.

Long-range scenario planning utilizes recognizable drivers that make sense across the organization and its environment and therefore is can be easy to explain and translate to others. The approach also introduces competing futures that need to be considered resulting in more flexible, adaptable plans than the traditional approach. A third advantage is that the scenarios that emerge from the process can often be compelling visions of the future that get people excited; scenario planning is interesting if nothing else. There are drawbacks. Long-range scenario planning is based on assumptions that require laminar dynamics, smooth predictable paths to the future. In reality, the drivers continue to have impact and interaction effects that are often unpredictable, so the approach fails to recognize the nonlinear dynamical nature of ecosystems and can be less responsive to changing environments. Unless the approach is continually updated with great insight, it can be hard to account of novelty and unexpected innovations that radically change industries and organizations. Also, harvesting insights from scenarios may prove difficult and error rates in assumptions and drivers are high. And finally, the actual reality that results over time may be a combination of several scenarios that muddies the waters in interpretation.

Action planning overcomes some of the disadvantages of traditional and scenario planning as it tests plans continually; by its inherent design it remains responsive to changing environments. The approach especially works for many managers who prefer to “do” rather than “vision” as it is very logical and practical. And to extend that thought, action planning allows for specific functions to quickly optimize their outcomes through incrementalism. Yet, action planning can easy to get off course or fall short of grand vision by doing the practical, rather than the magical. It may be difficult to maintain alignment and coordination in large organizations when many managers and leaders are operating simultaneously. And finally, action planning requires continued planning and strategy creation and, therefore, may be overly reactive to local conditions.

Strategy creation from the systems thinking is perhaps the most responsive to the environment and recognizes the nonlinear dynamical nature of ecosystems. It also blends internal and external perspectives to seek combined system health and optimize resources and positions. The approach encourages openness, partnerships, collaborations, and win-win outcomes as system health is optimized. However, this approach may be one of the most difficult to do; it tends to be heady, theoretical, and difficult to understand and continually apply. Beyond that, systems mapping is no easy task and there is the tendency to under-represent the full complexity of the systems. And in especially complex organizations and systems, it can be difficult to coordinate and manage across large organizations. There is much hope for the future of systems thinking though as computing technologies, machine learning, and artificial intelligence continue to bring new capabilities and techniques to understand and map complex systems, so there is a good chance the systems thinking methodologies are still evolving and emerging.

The final approach, competitive analysis, has seen much favor in recent years. It targets specific markets, customers, and outcomes and produces a recipe for winning. The shared understanding of strategy results in a set of five important questions captured on a single page that can shared and understood across an entire organization. The approach also naturally includes consideration and resolution of capabilities and management systems that many planning approaches do not address adequately. The approach is limited in several ways. Initially, developing a dynamic feedback loop between all five choices is not simple. The approach also forces an organization into a single position relative to the market, either low cost or differentiator when in fact there may be other advantageous positions. And finally, it is not suitable for every organization or every strategic problem.

Insights Across the Approaches. Taken together, there are several key insights obtained from evaluating the five approaches. Strategic planning done at its highest level is a blend of art and science and requires experienced professionals at all stages. The discipline and practice of strategic planning, however, has not evolved as quickly as we have seen other management tools, especially considering technology’s accelerations. We have arrived at a time where no particular strategy creation approach is dominant and no one is perfect; planners need to have awareness of all of the approaches and develop expertise across enough of the approaches to be capable. Even though the discipline of strategic planning has not produced a broad variety of approaches for leaders and planners to choose from, in most cases thoughtful decisions all along the strategy creation process can yield sufficient results. In the end, organizations must plan, so they choose from what they know. There is room to extend the tools for planners and leaders.

In conclusion. The strategy creation process has had substantial impact on organizations, governments, militaries, and other collective efforts and multiple approaches have evolved over the past 60 years that generally meet organizations’ needs. The four universal steps to strategic planning have been augmented in several ways, but we concluded that the discipline of strategic planning is in complete. The coming decades will present organizations with more challenges than they have witnessed in the last century as our world accelerates. It is quite likely that even the newer approaches to strategy creation that have managed to work for the last two decades will fail us in the near future. It is time to create new method that add value in new ways; I argue for further innovation in strategy crafting.