Is Strategic Planning Good Strategy? (Part I)
Questioning the value of 'Strategic Planning' is perhaps slightly more ill-advised than criticizing Gandhi. I doubt there's anything more hallowed in the hallways of corporate management and governance. But, what the hell, let's give it a go anyway.
To be clear, I'm not talking about 'product launch' strategies, or 'how do we best deploy resources to the new office in Winnipeg'. That's not 'strategic planning', it's management - and also way more important: Any moron CEO can strategically pronounce 'We need to enter the Winnipeg market'. It takes far more effort and skill to successfully execute that decision. (Trust me, we know.) I'm talking here about bigger picture issues: The 'corporate, longer term, sustainable competitive edge, how do we lead the market and smash the competition, what direction do we select now to lock in long term profitability' kind of strategy.
By the way, EllisDon hardly suffers (though a few of our Directors may beg to differ) from too little strategy. I love strategies, I've got a million of them. If a client says 'I want you to design, build, finance and operate my new building, solve traffic gridlock, lower my cholesterol, and fix my marriage, I want to have a strategy ready for it all. Of course, the experts decry this as a hopeless inability to focus, to make tough decisions, identify market niches, lever core capabilities, etc. - if you've taken one business course, you know the drill.
Here's my first problem: I have no idea what's going to happen next month, let alone three years from now. Neither do you. Neither does anyone. Have you ever seen a set of predictions for the future even come close? Are we seriously going to set the company on an irrevocable course based on a set of reasonably well educated guesses about an unknowable future? A couple examples:
- About ten years ago, the broadly considered wisdom was that without a very large capital base, there was no way we could compete in the coming world of mega projects and design/build/finance. The smart move was to sell ourself to a pension fund. Or at least find a big financial partner (ie, heavily dilute). Or die. Though, as it turned out, not so much.
- About five years ago, the international construction firms began their invasion of Canada, and it was broadly accepted that they would take over. (One cocky European CEO advised me that we'd survive longer working with him than against him.) A bunch of Canadian firms sold, likely for their own very good reasons. Has the market changed? Absolutely. Did the lethal threat materialize? No. Keeping our head down and not over-analyzing was the best (non) strategy.
Which is not to say we were (or are) certain about anything. I spend my life terrified. And in our own past decisions based on predictions for the future, we're likely batting a solid fifty-fifty. Maybe I will take a coin to our next Board meeting.
Arguably, business success is not a marathon, but a lifetime of 100 yard dashes. Things change too fast, opportunities arise where you least expect, then are suddenly gone. It's not whack-a-mole but, much as the intellectuals doth protest, neither is it exactly 3D chess.
Execute, execute, execute. Think strategically, always, but keep your runners on, your overhead low, your mind wide open. Work with people with great values. Make as many friends as you can. Try to never say no - if you can't do it, JV with someone who can. Keep your options open as long as you can.
Let's be clear. The strategic thinkers assail that kind of thinking as 'reactive' and weak minded. They want you to be proactive (which I agree sounds way better). The thing is, I don't know where 'there' is. And neither do they.
What's the answer? Beats me, but I also have two other questions about all this strategic planning dogma, regarding competitors and clients, but that's for next time.
Have a great 2013, thanks for reading.