Good business requires planning. Even organizations that start out based on an accidental discovery eventually need a strategy to guide leaders toward long-term growth.
But even though the very words “strategic plan” can engender a sense of control or calm, there are times when strategic planning may not be what you need.
Here are four times you may want to hold off on strategic planning.
Table of Contents
4 Times Strategic Planning is NOT Advisable
1. When You Lack Data
The calendar might suggest that it’s time for a new or revised strategic plan, but if there is insufficient information or understanding of market trends, strategic planning can lead to misguided decisions.
This is not to suggest that you should never make a decision without data; there are times when making a strategic decision without much data is unavoidable. However, for long-term strategic planning, spending time gathering the right kind of data is a better approach than simply making educated guesses.
At Microsoft, CEO Satya Nadella shifted the organization from planning based on lagging indicators, such as revenue, to leading indicators, such as usage and customer satisfaction. The shift allowed the company to operate more like a tech startup, pushing exciting new products and features out to users faster and energizing people within the company.It wasn’t that the company ignored data altogether; rather, under Nadella’s direction, it gathered the right data that allowed them to better understand the market and respond to customer needs.
2. When Leaders are Resistant to new Ideas
Oftentimes, the right strategic plan is one that causes discomfort. If your organization isn’t ready to deal with hard truths or face looming challenges, a bold strategic plan may not help.
Consider the story of BlackBerry. In 2009, the BlackBerry Curve, featuring the iconic BlackBerry keyboard, was still the highest selling phone of the year. But even as Apple’s iPhone and competing Android phones were making inroads into the market, BlackBerry executives assumed that what had worked before would always work and that their customers would never abandon their beloved BlackBerry devices for something else.
Today, RIM, the BlackBerry parent company, is a software and cybersecurity company, and its phones are simply part of cell phone history in a market dominated by Apple and Samsung. Had executives at RIM embraced some discomfort about the changing nature of cell phones, they might have remained competitive in the market.
3. When the Organization is In Transition
Big transitions often create challenges in the organization that may not align with a new strategic plan. Change resistance can throw up obstacles, which might reduce the likelihood of success for any new plan. Existing strategies could simply become irrelevant, resulting in the need to recreate them entirely once the dust settles.
Mergers, acquisitions, and leadership changes usually need time to resolve and settle before the company undertakes a new strategic planning process.
When Hewlett Packard undertook the acquisition of Compaq in 2001, public sentiment opposed the merger. However, HP did the right things in the lead up to the merger; it executed a rigorous integration plan that involved more than 1,500 people and smoothed the acquisition process.
The problems with the merger came later, when senior leaders focused too much on operational integration and not enough on strategic integration. Senior leaders tried to change corporate culture too fast and didn’t pick up on customer concerns. Eventually, new leadership set the company back on a solid footing, but the difficult integration set the process back by several months.
4. When the Organization is In Crisis
Crises can come from anywhere, at any time. Even the best scenario-based planning can’t predict every disaster, nor can it guarantee a smooth, unimpeded path out of a crisis.
But the middle of a crisis is not the time to create a new strategic plan or revise an old one. When immediate issues demand urgent attention, focusing on long-term planning can divert resources from critical problem-solving. Your primary responsibility in a crisis is to minimize damage to the organization and see your way through. Rely on any crisis management plan you have, and table your strategic planning for later.
In 1982, Johnson & Johnson set a new standard for organizations hit with a crisis. After seven people died from cyanide-laced Extra Strength Tylenol, the company immediately initiated a recall that cost approximately $100 million dollars. Across the business landscape and media, many people suggested that Tylenol wouldn’t even be on the market within a year.
Had Johnson & Johnson written a new plan during the crisis, the company may have imagined a future that didn’t include Tylenol at all. Instead, the company took the time to understand the real problem—Tylenol’s packaging, not its efficacy or safety—and created a new packaging standard for consumer products.
Once the company was stable and had a clear picture of the challenge, it could move forward with incorporating new safety standards and rebuilding trust with consumers, incorporating those discoveries into future planning.
It’s true that there may never be a perfect time for strategic planning, and there are always pitfalls to avoid in the process. When in doubt, it’s probably better to just start than to hold off. But when there are clear signs of crisis or transition, lack of information, or resistance to change, strategic planning could be pointless at best and damaging at worst.
If your organization is struggling with strategic planning at any stage, the experts at Stewart Leadership can help. Contact us to learn more.
Self-check:
- Is there some data we need to gather in order to make a better strategic plan?
- Is there a general resistance to change in leadership that could impede the success of any strategic plan?
- What is one obstacle to strategic planning that we need to resolve before moving forward? How can we remove that obstacle?
