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To Plan or Not To Plan? That Really Is the Question!

An article in the January 25 Wall Street Journal titled “Strategic Plans Lose Favor” indicated that many companies put aside their long-range plans during 2009 and focused solely on getting through the trough.

Examples were cited of companies that created war rooms to monitor the changing markets and those that turned budget reviews into monthly exercises. Executives who went down these paths argued that existing long-range plans limited their flexibility and, by putting the plans aside, they were better able to react to changing market conditions. The writers for the Wall Street Journal seemed to support this thinking.

Nonsense!

If survival until next month is your business goal, then eschewing long-range planning makes some sense. However, if you have your sights set on a specific goal or desired direction, then long-range planning, even during the darkest of days, is critical.

Several of the points made in the article are presumptive and detached from reality.

• Article Concept: “The long-range plan did not provide us with the flexibility to make rapid adjustments.”
  
  Strategy Insights Counterpoint: If your planning process locks you into a plan that does not have any flexibility, then you’ve got the wrong plan and we agree it should be scrapped. It is critical that any plan include both measurement criteria and also the ability for leaders to adjust tactics to meet market changes.
• Article Concept: “Strategy is dead. Corporate clients decided that increased flexibility and accelerated decision-making are much more important than simply predicting the future.”
  
  Strategy Insights Counterpoint: If your plan is simply a prediction of the future without a set of goals and objectives to support it, you need to stop using the word “strategy." What you have is not a strategy; it’s a random walk. If your strategy is supported by time-bound, measurable activities, then it's too early to pull the plug. Rather, perhaps, increase the frequency of the reviews, and be quicker when it comes to adjusting tactics, but do it in the context of the longer view. If the plan is designed correctly, leadership’s flexibility and decision-making should not be constrained; to the contrary, the output and results should be enhanced.

Two other concepts that resonate with the messages that Strategy Insights has been commenting on through the year also come through from the article. These are “stick to your long-range planning process to give your employees a plan to rally around” and “it’s time to go on the offensive.” Now, perhaps more than ever, this advice holds true.

The road to recovery will, undoubtedly, have many speed bumps. It will also expose you to many opportunities. If you chucked your compass and now spend your days jumping hurdles and avoiding barriers . . . who knows where you will end up? In shorter words: Get there on purpose, not by accident.

You don’t need to sacrifice your long-term planning to gain short-term maneuverability. Both should be inextricably intertwined. Remember, you’re not in business today just to get to tomorrow—correct?

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.