Strategic planning: Three tips for 2009 — An online discussion
How is your company addressing the issues highlighted by many respondents to a recent Quarterly survey, including balancing short-term challenges and long-term priorities, employing scenario planning effectively, and boosting the frequency of monitoring progress against plans? Read what others have said, then let us know how you are approaching the strategic planning process this year.
- See the related article, "Strategic planning: Three tips for 2009"
- See the survey results (page 2 of the original article)
- Link to this blog post
We made an inquiry on business strategy and crisis to Micro businesses & SME’s in retailing & manufacturing. Simplified & short:
-Micros: have a sound vision of their core business but no big planning.
-Mid-sized: have plans and tools in place but executives are “blind” on long range view.
Balancing both, would be fine under normal circumstances.
Given the economic change, a sound long range view of the business is crucial vs. getting lost with ad hoc scenarios.
Just watch the micro businesses “navigating through the storm” without loosing the route to the harbour. Sailing is a part of the game. Long term view is winning.
Posted 17 April, 02:38 PM by Georges M. Pequito
Strategic planning process is critically focussed on managing cash flow on weekly basis by pruning not so essential expenditures,funding operations adequately so that surplus revenue could support the capacity expansion project funding.This additional capacity will increase revenue by 30% within the 3rd quarter of this financial year.Attaining this critical mass is essential to tide over the down turn and then smaller capex could be lined up for projects to sustain business in the long run before we step in for a bigger investment.
Posted 17 April, 07:32 AM by Partha Sur
I am really keen to understand how companies are avoiding the risk of getting lost in what I call “deterministic” planning and practice what the original article referred to as “pay as you go” resource allocation.
It is really hard for senior managers to give up habits of the past when so often they have contributed to their success. And the kind of decision making I sense is being implied by this practice (Pay as you go) does not seem to come naturally in most businesses.
Posted 17 April, 06:48 AM by Ashish
I think many of the remarks posted about the Tovey’s comments are logical and worthy of consideration in any plan to partake of the opportunities the current global environment presents. Of all the comments, I’d place Joseph Toveys, Posted 16 April, 11:03 PM, at the top of the list. That is because it reflects the frequently overlooked principle that understanding and wisdom is built over time and requires deep thinking. Logical solutions are often based on current thinking which may be overly influenced by what Allen Webb may be referring to as “sample bias”, the “sample” in this case being “current thinking”.
Posted 17 April, 06:47 AM by Eli Santiago
Bad news is good news to the prepared. Every crisis/downturn presents opportunities to individuals and organisations that are prepared for them. Cash is king, therefore, every company needs to balance its sources of cash – such as sales revenue and debt – with costs and expenses that consume cash.
I quite agree with the position of Joseph Tovey and the contribution of Allen Webb. it aligns with a classical definition of vision as “foresight (seeing the future) based on insight (knowledge, ideas) with the benefit of hindsight (past experience, case studies, etc.)”.
Posted 17 April, 04:16 AM by Hilary Eledu, BGL Plc
We think that is a perfect time to sit down and rethink the things that we were doing. We could and should generate the value which will bring us cash in a very short period. Strategy planning becomes more actual and necessary for us. It is no more the ideas or myths, it is a way which we see out of the situation.
Yeah, process becomes more complex, more uncertain. But, we have to experience this as well and learn our lessons…
Posted 17 April, 03:52 AM by Karim Mammadov
While a concept of learning from history has merit, I daresay that it often gets overwhelmed by the desire to “ride the wave” when the going is good. Besides significantly enhancing the stature of economists, my fervent hope is that the current crisis will force the companies to temper their growth aspirations against sound governance principles.
Posted 17 April, 01:46 AM by Vinay Dixit
This is a period of opportunity for the bold.
Conserve Cash and Cut unnecessary expenditure through innovation are the 2 Cs for the short term
In the long term, the leadership must look at 2010 and beyond and build resources accordingly. One may not be able to foresee the future, but moving forward without a vision for it can leave the organization flat-footed in times of growth.
The third C therefore is Committment to the stakeholders and that includes future direction and strategy
Posted 17 April, 12:04 AM by Bhaskar Ranjan Das
I am interested in the reactions of others to Joseph Tovey’s comments about the value of history in the planning process. My view—and I’m biased, I teach business history to MBA students—is that the pattern recognition that emerges from a strong understanding of the past can be powerful. At the same time, I suspect it’s critical for organizations that rely on history to draw on a broad enough “sample” of case studies. It’s easy to conclude from examples of successful innovators during the 1930s, for example, that going full speed ahead with R&D during tough economic times can be wise. (Harvard business historian Tom Nicholas investigated R&D during the 1930s in an excellent, recent Quarterly article.) But how many companies that don’t make the history books lost their shirts during the Depression while continuing to invest in R&D? Looking at case studies of both successes and failures seems critical, but not always trivial to pull off. To what extent do you use history in your planning process, and how do you guard against “sample bias”?
Posted 17 April, 12:02 AM by Allen Webb, member of the McKinsey Quarterly's Board of Editors
Short-term stratergy with a long term vision adequately supported by stringent control systems is a necessity.
Posted 16 April, 11:49 PM by Jerome Prithviraj C