Joseph D. Ogden is an associate professor of communications at Brigham Young University. His areas of expertise include message design, persuasive writing, media relations, strategic planning and marketing. He teaches introduction to public relations, PR case studies, advanced media writing and communications management. He has also taught marketing, international business and business ethics. In addition, he has guest lectured at several colleges and universities across the country.
Strategic planning is inextricably interwoven into the entire fabric of management; it is not something separate and distinct from the process of management. This point is underscored in this chapter. Also discussed is the shifting focus of management from operations to strategy. Finally, attention is given to the different fundamental approaches to strategic planning that can support management decisionmaking.
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Years ago when my colleagues and I were selling what at that time was called long-range planning and what I now call strategic planning, we spoke of it as a valuable new tool for man agement, a major new technique to help managers. I no longer speak of it this way. Strategic planning is inextricably interwoven into the entire fabric of management.
Strategic planning is a backbone support to strategic manage ment. It is not, of course, the entirety of strategic management but it is a major process in the conduct of strategic management. Everyone recognizes that strategic and operational management are tightly linked. Strategic management provides guidance, direc tion, and boundaries for operational management. Just as strategic management is vitally concerned with operational management so is strategic planning concerned with operations. But the focus and emphasis of strategic planning as with strategic management is on strategy more than operations.
In a growing number of companies, particularly the larger or ganizations, the framework for formulating and implementing strategies is the formal strategic planning system. Strategy can be formulated without a formal system, however, as will be discussed later. But either way, the processes of strategic planning are in tertwined with management.
This is a book about strategic planning and not about the tasks of top management. It is useful, however, to comment a bit more on a point already made, namely, that strategic planning is a central concern of strategic management but not the entirety of the top management job.
There is, of course, no idealized or single way for top managers to discharge their responsibilities. For some managers the strategic planning process is a much larger part of the total job than for others. But for all it is of central importance in performing properly the top management function.
It was said previously that strategic planning is a function of all managers at all levels of an organization. This point has been amplified by Marvin Bower, who for several decades was managing director of McKinsey and Company, a well-known, worldwide management consulting firm. In a superb book that summarized the lessons of experience of effective managers over a long period of time Bower concluded that there are
2. Planning strategy: Developing concepts, ideas, and plans for achieving objectives successfully, and for meeting and beating competition. Strategic planning is part of the total planning process that includes management and operational planning.
All these processes, without exception, are in one way or another embodied in a comprehensive formal strategic planning process. But again, managerial responsibilities and actions for some of the processes extend beyond the planning process. For instance, activating people (item 14) is a requirement that is more pervasive than planning. The point of this discussion is that domi nant management processes, according to a management observer whose word commands respect, are elements of or rely heavily upon strategic planning.
There are two different types of management. One, which is done at the top of the corporate organization, is called strategic management. Everything else is operational management. Stra tegic planning is central to helping managers discharge their strategic management responsibilities. The central focus of both is on strategy. But, just as strategic management is concerned with operational management, so strategic planning is interrelated with operational planning. For managers at all levels strategic planning is interrelated with the management process. Strategic planning is not something separate and distinct from management.
Strategic management and strategic planning are vital to the success of corporations today. This is so because the wrong strategy can lead to serious difficulties, no matter how internally efficient a company may be. Conversely, a company may be inefficient internally but successful if it has the right strategies. Good marks in both, of course, is the preferred position.
There are two ways to help top managers discharge their strategic planning responsibilities: intuitive-anticipatory planning and formal systematic planning. Both are important and must not be underestimated. In many corporations there are conflicts be tween the two approaches because different thought processes are involved in them. However, formal planning cannot be done with out management intuition. If the formal planning system is cor rectly tailored to managerial characteristics it can help managers improve their intuition.
In the 1960s the words long-range planning were used to describe the system that is the subject of this chapter. Other names have subsequently been coined. Long ago, for reasons that I shall develop later, I abandoned the exclusive use of the term long-range planning to describe the system. So have most other writers in the field. Not all would agree with me, however, when I use synonymously comprehensive corporate planning, comprehensive managerial planning, total overall planning, long-range planning, formal planning, comprehensive integrated planning, corporate planning, strategic planning, and other combinations of these words. More and more, however, formal strategic planning is used to describe what is usually meant when the above phrases are employed.
Third, strategic planning is an attitude, a way of life. Planning necessitates dedication to acting on the basis of contemplation of the future, a determination to plan constantly and systematically as an integral part of management. Strategic planning is more of a thought process, an intellectual exercise, than a prescribed set of processes, procedures, structures, or techniques. For best results managers and staff in an organization must believe strategic planning is worth doing and must want to do it as well as they can. Not to do it well is not a sin, says Ackoff, but to settle for doing it less than well is.
Strategic planning is not forecasting product sales and then determining what should be done to assure the fulfillment of the forecasts with respect to such things as material purchases, facilities, manpower, and so on. Strategic planning goes beyond present forecasts of current products and markets and asks much more fundamental questions: Are we in the right business? What are our basic objectives? When will our present products become obsolete? Are our markets accelerating or eroding? For most companies there is a wide gap between an objective forecast of present sales and profits and what top management would like sales and profits to be. If so, there is a gap to be filled by strategic planning.
Exhibit 2-1 shows my conceptual model of the structure and process of systematic corporate planning. It further elaborates the meaning of strategic planning and explains how the process can be carried out. Over a number of years I have examined planning systems of many companies and I conclude that those that do effective comprehensive planning follow this model explicitly or implicitly. Yet, paradoxically, I have never found an operational system diagrammed by a company in precisely the same way as Exhibit 2-1. Operational flow charts vary with the differences among companies but, underneath, the basic elements of Exhibit 2-1 are found in the better systems. If one element of the model is missing, either explicitly or implicitly, the system may not operate effectively. Conceptual models of leading authors in the field are quite comparable to this model.
Before undertaking a strategic planning program it is important that those involved have a thorough understanding of what top management has in mind and how the system is going to operate. This guidance is incorporated in a plan to plan, which may be oral but is usually written for general distribution.
The substantive planning premises are shown in the four stacked boxes. The information accumulated in these areas is sometimes called the situation audit but other words are also used to classify this part of planning (e.g., corporate appraisal, position audit, assessment of current position, and planning premises).
Included in the data base is information about past performance, the current situation, and the future. This information is essential in helping those doing the planning to identify alternative courses of action and to evaluate them properly. Illustrative of types of past information collected are the following: sales, profits, return on investment, market share, employee productivity, public relations, and product development capability. Information about the current situation, in addition, would include such matters as management capabilities, employee skills, competition, corporate image, social demands on the company, interests of major customers, and product acceptance. Data about the future would, of course, include forecasts of markets, sales, selected economic trends, competition, technology, and other trends of particular concern to the organization (e.g., population, international turbulence, and government regulation). 9af72c28ce
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