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The fall and rise of strategic planning

When strategic planning arrived on the scene in the mid-1960s, corporate leaders embraced it as “the one best way” to devise and implement strategies that would enhance the competitiveness of each business unit. True to the scientific management pioneered by Frederick Taylor, this one best way involved separating thinking from doing and creating a newfunction staffed by specialists: strategic planners. Planning systems were expected to produce the best strategies as well as step-by-step instructions for carrying out those strategies so that the doers, the managers of businesses, could not get 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 itspedestal. But even now, few people fully understand the reason: strategic planning is not strategic thinking. Indeed, strategic planning often spoils strategic thinking, causing managers to confuse real vision with the manipulation of numbers. And this confusion lies at the heart of the issue: the most successful strategies are visions, not plans. Strategic planning, as it has been practiced, hasreally been strategic programming, the articulation and elaboration of strategies, or visions, that already exist. When companies understand the difference between planning and strategic 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 ofothers throughout the organization and the hard data from market research and the like) and then synthesizing that learning into a vision of the direction that the business should pursue.

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

Henry Mintzberg is professor of management at McGill University in Montreal, Quebec, and visiting professor at INSEAD inFontainebleau, France. This article, his fifth contribution to HBR, is adapted from his latest book, The Rise and Fall of Strategic Planning (Free Press and Prentice Hall International, 1994).

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

Organizations disenchanted with strategic planning should not get rid of theirplanners or conclude that there is no need for programming. Rather, organizations should transform the conventional planning job. Planners should make their contribution around the strategy-making process rather than inside it. They should supply the formal analyses or hard data that strategic thinking requires, as long as they do it to broaden the consideration of issues rather than to discoverthe one right answer. They should act as catalysts who support strategy making by aiding and encouraging managers to think strategically. And, finally, they can be programmers of a strategy, helping to specify the series of concrete steps needed to carry out the vision. By redefining the planner’s job, companies will acknowledge the difference between planning and strategic thinking. Planning hasalways been about analysis – about breaking down a goal or set of intentions into steps, formalizing those steps so that they can be implemented almost automatically, and articulating the anticipated consequences or results of each step. “I favour a set of analytical techniques for developing strategy,” Michael Porter, probably the most widely read writer on strategy, wrote in the Economist.1The label “strategic planning” has been applied to all kinds of activities, such as going off to an informal retreat in the mountains to talk about strategy. But call that activity “planning,” let conventional planners organize it, and watch how quickly the event becomes formalized (mission statements in the morning, assessment of corporate strengths and weaknesses in the afternoon, strategies...
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