Project Management

Strategic Iteration versus Strategic Planning

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Categories: agile, stategy, strategy

When I was first introduced to the phrase “strategic planning” in the early 1990’s I recall asking myself if it meant that the act of planning itself was strategic.

I tend to do that with phrases that I feel contain contradictions – like business analyst for example – business analysis is an activity that many of us do on a daily basis and sometimes multiple times a day. So why is it seen as role? But I digress.

When I visualize strategic planning I see the thick binder containing all manner of grand visions and statements as the end result. Each year's annual strategic plan joins the strategic plans from years past; on a shelf that no one dares to look at for fear of having to open one of them and actually read it.

Strategy is a concept that emerged in military planning over many millennia and was essentially made up of setting some objectives, gathering intelligence, and using that intelligence to make informed choices about likely courses of action.  Of course as was famously attributed to Dwight D. Eisenhower the approach was limited but useful,

In preparing for battle I have always found that plans are useless,

but planning is indispensable

Strategic planning  in corporate settings is based on the premise that we can use the past to predict the future. But is that realistic?

Defining and delivering on vision and strategy has been a hit and miss proposition for most organizations for many decades. The reason for this is twofold.

First, the world is not like it used to be. Traditional management and its accompanying models relied on the notion that we can use the past to predict the future. This was the era of 3-5 year plans. Change was slow, and at times imperceptible, and the problems were mostly discrete.

Organizations are now operating in a world of volatility, uncertainty, complexity and ambiguity (VUCA). Additionally, customers expect businesses to be more aware of and responsive to their needs.

Secondly, organizations now face holistic messes rather than discrete problems.

Traditional hierarchies are intrinsically ineffective at enabling the speed of decision-making required to lead at the pace of change. We don’t know what we don’t know and we have to stop the pretense that we do.

Rod Collins, in his forward to our book Agile Value Delivery: Beyond the Numbers said:

“Handling these holistic messes has more to do with having the ability to rapidly adapt to ever-changing customer expectations than with minimizing variances in a fixed plan.”

Handling holistic messes requires whole-of-organization approaches. These approaches encompass iterative strategic direction setting, execution, validation, and adaptability. It requires a mindset that embraces emergent thinking. The window of opportunity to deliver Value into business operations has gotten shorter; the window of stability following Value delivery is immediately followed by the next set of challenges that have to be solved.

Strategic iteration (or iterating strategy execution) recognizes that we cannot use the past to predict the future. Increasingly, many are starting to recognize that we need to adjust how we view strategy:

  • From being predictive and deterministic to running a continuous experiment and adjusting what we do next based on what we observe about what we just did (that is use an OODA approach)
  • From endless data collection and analysis to looking for and at patterns and developing our ability to both recognize the familiar ones as well as uncovering new patterns
  • From the top down wisdom-of-the-leader model to having a networked perspective that includes both internal and external players

That is, we need to move from the perspective of doing strategic planning as an annual exercise to doing strategic iteration as a continuous activity that involves everyone, and then focus our attentions and efforts on what we are actually observing as opposed to what we hoped might happen.

A high school  guidance counselor once told me what he would say to his students at the end of a session where he had to have a conversation about problematic behaviors “awareness is an awful thing “ – once you have been made aware of something you never become unaware of it again.

We no longer live in a world of slow and imperceptible change when strategic planning as a corporate exercise was incubated and when most people felt the problems we faced were mostly discrete. We now live in a world of rampant change and holistic messes. There, you are now aware.

So what do you think? Time to ditch strategic planning for strategic iteration?

Posted on: March 22, 2016 08:18 AM | Permalink

Comments (3)

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It really depends upon the organization and its purpose or mission. If NASA has a strategic objective to land on Mars, that is a long term strategic objective. We can break that objective down to shorter term objectives aligned to landing on Mars. Shorter term objectives can be called strategic iterations that can be agile enough to take advantage of new breakthroughs in technology, like the recent battery that could last for centuries. At some point NASA may have invested too much in rockets and become obsolete when Scott invents intergalactic transportation.

In market driven businesses, the long term is 6 months or less, like Apple losing smartphone market share to Samsung in the last 6 months, and launching their new iPhone at the same time Samsung'so new flagship phone is exploding. This type of organization needs much shorter term objectives than NASA.

The concepts of strategic iteration are not specific to time horizon. As you enter execution against a your strategic goalsl you need to be observe what is happening, orient to this new reality, decide what to do next, and then act that as what you do next. It is precisely this perspective that can help you adjust both to longer term goals that may be usurped by technology advances, changes in markets, etc. as well as to the ones that are on the immediate horizon. Most organizations these days do not face the long term challenges of NASA so I'd consider that an outlier. Strategic planning will not help Apple - Strategic Iteration will.

Thanks for sharing. Great information

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