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?