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Mistakes: Strategic Planning Don'ts (and Dos)
If the best-laid plans oft go astray, can we expect any better of plans that try to predict a company’s ...
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By Derek Slater June 01, 2002 — CIO — If the best-laid plans oft go astray, can we expect any better of plans that try to predict a company’s growth, competitive landscape, work processes and technology requirements three tofive years from now? Those are the ambitious goals of IT strategic plans?plans that are frequently threatened with obsolescence by technology changes and economic upheaval before the ink even dries. Many CIOs apparently have responded to those forces of chaos by throwing in the towel on strategic planning: A 2002 Cutter Consortium survey found that 39 percent of respondents had no formal ITstrategy at all. But in fact, chaotic times make it more necessary than ever for the CIO to routinely take a strategic view. "Everything’s been stable and good here, but we realized that we’d been putting off a lot of major [IT] decisions. You have to avoid major [problems] by looking ahead," says Malcolm Fields, CIO of Hon Industries, a $1.8 billion office furniture and hearth products manufacturer inMuscatine, Iowa. Fields, Hon’s first CIO, is in the midst of writing his company’s first-ever IT strategic plan. Prior to his appointment, he says, "we just never had anyone far enough out of the trees to see the forest." It’s the looking ahead part that makes planning strategic. All IT strategic-planning primers start with the same instruction: Imagine the desired future state of the company.With that vision, CIOs can then analyze the present state, compare the two to identify gaps, and start to draw a road map for closing those gaps and getting the company to the goal. Project prioritization, risk analysis, and an analysis of the likelihood of changes in the industry and technology are also well-established basics in the strategic-planning process. However, that simple-sounding recipemasks some of the complexities and finer points of the strategic-planning process. What follows is a list of five common errors in the IT strategic-planning process, and tips from CIOs on evading those land mines and creating a plan that works. "Historically, strategic planning for the CIO has meant discerning the business’s strategy and then trying to achieve it. Today I think [the CIO’s role]cannot be reactive," says Darrell Rigby, a director at consultancy Bain & Co. in Boston. "The CIO has the capability to see where the basis for competition will be." That is not to say that CIOs should write their IT strategy independently and then attempt to force the business strategy to match it. Rather, the point is that both the business plan and the IT plan should be written collaboratively bythe entire executive team, including the CIO. The second problem with the "start with the business plan" mantra is that even formal business plans are often incomplete for IT purposes. Business strategies are typically written at a very high level. They frequently talk about markets, sales and distribution channels, and growth targets?but rarely address how the company gets its work done.Business processes?that’s a place where IT can drive vital change and add enormous value. That is precisely Fields’ focus in writing Hon Industries’ three-year strategic plan. Hon comprises seven operating companies. Fields wants to know how each of Hon’s business units intends to conduct business. To understand that future state, Fields says, "we work with the operating company presidents and theirdirect reports. Take a business process like make-to-ship?how are we going to handle production and distribution in three to five years?" That discussion yields ideas and goals that aren’t spelled out in the corporate strategic business plan. (Fields says he uses a formal methodology called Value Stream mapping for capturing current and intended future process definitions.) From there, Fields...