The Truth Behind Strategic Planning
What comes into mind when a person hears the word ’strategy’? Some may refer it to a plan, an approach or a way to attack something. Looking into the etymology of this word, this can be traced from the ancient Greek word strathgia which meant the art of generalship. Specifically, it concerns the planning and carrying out of a military campaign. As time passes, the military origin of this word gradually diminishes and became more of a term used in the corporate world. In the point of view of a businessman, strategy is considered as superior act which can be performed by intelligent people. Formulating a corporate strategy is done in a confidential and irregular manner.
The questions surrounding strategic planning have stirred the minds of many professionals. However, these minds have not came up with a single approach that is applicable to all circumstances. Alfred Chandler, a former professor of business history at Harvard Business School, stated that strategic planning includes the expression of long-term goals and the distribution of the resources to attain those goals. On the other hand, Igor Ansoff, a respectable business manager, differentiated strategic planning and what he coined as strategic management. He pointed out that strategic management is consisted of three parts: strategic planning; the ability of a firm in converting plans to reality; and the ability of a firm in handling its own internal resistance against change. Furthermore, Ansoff’s analysis can be traced on his study that “as firms became increasingly skillful strategy formulators, the translation of strategy into results in the marketplace lagged behind. This created paralysis by analysis in strategic planning”.
The popularity of strategic planning in the 1960s resulted to the rise of management consulting businesses. In an issue of Business Week, it was mentioned that strategic planning has “spawned a mini-industry of brainy consulting boutiques … you could plot a strategy that would safely steer your company to uninterrupted triumph if only you thought hard enough”. Then, in the late 1980s, strategic planning slowly subsided. General Electric (GE) proved this when their reputable planning department was called off in1983. Jack Welch, general executive of GE that time, said that this move was made because he believed that the department’s 200 or more senior executives were giving too much time and effort to financial issues rather than businesses and visionary markets. The strategic planning of General Electric went to the hands of the bosses of its 12 main business units. This group met every summer to lay down strategies for the company.
Come mid-1990s, strategic planning regained its popularity among people. In August 1996, Business Week, put this event on its cover citing that “After a decade of gritty downsizing; big thinkers are back in corporate vogue”. Plus the introduction of the internet and the launch of e-commerce have paved the way for companies to venture into the new electronic business world. For example, Disney appointed senior executives who will work on the strategic planning for its on line businesses.
Strategic planning took a different form upon its return. It developed into a continuous process and not just an event that took place secretly at irregular times. For example, Nokia, a popular mobile phone company, stated that it aims to make strategy part of the manager’s daily routine. Also, EDS gathered over 2,000 of its employees in the late 1990s for its strategic planning process. But Gary Hamel, founder of the Chicago-based international management consulting firm called Startegos, is surprised on how young people who is considered to be the hope of the future tend to be deprived to be part of strategy-creating activities.