Tuesday, January 10, 2006

Decision-focused Planning

In a recent HBR article (Jan 06), Marakon consultants Michael C. Mankins and Richard Steele argue that in most companies, strategic planning is not about making decisions, but about documenting choices that have already been made.

They describe a disconnect between strategic planning and decision-making, which is caused by the length (1 year) and timing (annually) of traditional planning processes, and also because the strategy process is predominantly business-unit oriented, while decisions are often issue-oriented.

The authors recommend to add 6-8 issue-based meetings per year and integrate those in the planning process, which as a result becomes more continuous. Additionally this helps to improve the communication between senior corporate managers and business unit managers.

Although an occasional issue-based strategic meeting can have its merits, I believe that adding 6-8 of those each year plus an additional level of planning on top of the usual network, corporate, business and functional levels is too much of a thing and business unit managers are perfectly capable to take major decisions themselves. Besides, board-level executives cannot afford to spend that much time on the issues of their business units.

Are you an advocate of decision-focused planning?


Blogger Elante said...

It is here that the significance of a business plan comes into the scene. Any business unit is expected to work on a well comprehended business plan. There is no doubt that issues prop up, time and again but, it is essential to analyze & measure the quality of implementation of the plans at the ground level. Sometimes issues relate with indirect & unforeseen situational problems like team coordination or market fluctuations.
It would always be beneficial to keep frequent track of all these happenings and conduct regular meetings. Minutes of meetings should also be recorded and should be used as a reference in the forthcoming financial year planning & strategy design.

10:35 AM  
Anonymous Sunil said...

Strategy and Implementation comes down to two essential things:
1: Conveying the vision that you have. Strategy decided without a proper communication channel to implementing managers is redundant.

2: Monitoring: While monitoring is essential, anything more than a quarterly meeting at a board level is unnecessary. Of course, this requires building a good management team

4:39 AM  
Anonymous Kale said...

Sometimes carefully laid out plans can lead to problems when it comes to making decisions. In his work Mankins discusses how managers often become fixated on their decisions without taking new trends into account and recognizing when their plans become useless. Also, detailed plans may take up too much time and not leave enough room for making actual decisions when the need to do so arises.

7:36 AM  

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