“How do I work? I grope” said Albert Einstein. Interestingly, he does not praise the virtues of inductive and deductive thinking. He simply groped around to find answers while asking the right questions.
But how do companies find answers to their route to success? How does “rain dance” planning in organisations really work?
How Planning Fails
Every so often companies and NGOs go off on a retreat to plan for a better future. Yet what happens? There is slight papering the walls; managers come away believing that, this time, the firm will apply it’s strengths to take advantage of the opportunities at hand.
Six months later the organisation faces a crisis that threatens its very core premises. “Ah, but this was not in the plan”, complains the CEO.
Somehow organisations have an addiction to planning where in practice it’s unclear the contribution planning makes to business success. . As Mao Zedong said, “he who plans, must plan often”.
Business planners will argue that what is important is the process of planning, forcing managers to engage their intellect, to think through issues rather than focussing solely in on product in the form of a report that invariably is tossed aside, only to gather dust.
Forget the theory; senior managers often make their decisions as much on random events, gossip in the hallway and just plain subjective impressions, with some wild intuitive guesses thrown into the mix.
This is not wrong, no, it’s groping – it just happens to be how things work. Richard Neustadt, the Harvard University scholar who served as advisor to several US presidents comes to a similar conclusion: “It is not information of a general sort that helps a president, not surveys, not bland amalgams.
Rather it is the odds and ends of tangible detail that pieced together illuminate the underside of issues”.
So before you shoot off on the next planning retreat consider the thoughts of the Dartmouth professor, Brian Quinn who notes: “A good deal of the corporate planning I have observed is like a ritual rain dance; it has no effect on the weather that follows, but those that engage in it think it does.
Moreover, it seems to me that much of the advice and instruction related to corporate planning is directed at improving the dancing not the weather.”
Is planning wrong? No, it’s just typically poorly done. Insightful strategic planning combines hard analysis with creativity, taking into account the turbulent business environment.
Easier said than done. Just look at the business press that is littered with the names of firms that went belly up despite being addicted to annual planning retreats. So beware of rain dance planning and be strategic.
So What Is Strategy?
What is it that most East African companies talk about but don’t have? A business strategy. Having a clear “spreading the bets” strategy is one of the elements that drove Microsoft to its market dominance.
In contrast, the absence of a clear strategy has been the downfall of many East African organisations and for the survivors, languishing share prices.
What most companies have is glorified dull witted “to do list” that gathers dust.
Having an operational plan with the naive intention to do better than the competition is not strategic, as the competition will soon catch up. Soon the organisation will have to run pretty fast just to stay where it is.
The author is a management consultant now working in Rwanda