Plans: Control over Clarity

Organizations cling to strategic planning (despite strong evidence of its ineffectiveness), partially because many have experienced the downside of randomness. New boss, new direction. New Board Chair, new direction. One really aggressive employee in another department pushing a particular activity, and you end up shifting time and attention away from what you know needs to be done. All this randomness is frustrating, and usually hurts our bottom line, so we demand our strategic plans. Just write up a good plan and then we all agree to stick to it!

In short, one of the main values of strategic plans is that they limit our choices. They provide a script (game plan, sheet of music…you choose your metaphor) that we ALL follow. No more randomness. We like strategic plans because they are about control. Randomness bad. Control good.

And I agree with the general sentiment that control is better than randomness, particularly as the effort starts involving more and more people. Randomness has a lot of waste. But my problem with plans is that they are presenting me with a false choice. The choice is not between randomness and control–it is between clarity and control.

Strategic plans are never complete until they get down into a list of activities. We have to know what we’re doing, and our people have to know HOW their specific activities are contributing towards the goals we have in our plan. In fact, we make them prove that to us sometimes. We don’t write down EVERYTHING that gets done into the plan, obviously, but we write enough to control people from doing things that are outside of the plan.

That defeats the randomness (now I have something to challenge that rogue Board member with…”So Bob, how does your new program idea fit into our strategic plan?”). But it robs us of the clarity that the enterprise needs to navigate its way into the future. We all will be faced with critical decisions that are NOT completely covered by the plan Within the plans parameters there will be multiple options for implementation–how do we make those choices? And the environment will shift and present us with choices we hadn’t considered when we wrote the plan–how do we deal with that? Strategic plans can’t help us there because they focused on a mapped-out structure of activities. They provided an answer to randomness, not a guide to decision making.

Consider an example covered in an HBR blog post by Donald Sull and Kathleen Eisenhardt. A near-death Brazilian freight rail company spent its time developing a small set of strategic principles that would guide decision making throughout the enterprise. Instead of producing a detailed strategic plan, they worked harder to design clear criteria for decision making within the strategies.

For example, they desperately needed to invest in infrastructure, but didn’t have a lot of money. Managers requested ten times the amount that was available for investment. So they developed a clear set of criteria for making investments. One of them, for example, was that the investment needed to pay off in the short term, not only in the long term. This is clarity! That’s not a permanent rule, but it represents a strategic need. That super-great idea you have about a long-term improvement? It has to wait, even though it’s a good idea. There was obviously a strategic imperative for this company related to cash, and their decision guides would move them in that direction, without telling everyone what to do.

This kind of clarity generates strategic decisions that are aligned, without constricting the periphery into following orders that don’t make sense. As the authors say in the blog post, “Simple rules represent the beating heart of strategy.” The beating heart of strategy, not the gears and cogs and pistons of strategy. Human organizations value clarity over control.

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4 Comments

  1. 29.09.2012 at 9:27 pm

    Interesting post. I like the comment about simple rules. This strikes me as the key to why strategic planning fails. It all gets too complex and disconnected from the decisions we have to take every day. I also quite a list of Big Nos – things that you can’t do. It takes away much of the risk of randomness (or at least the biggest ones) without trying to control everything.

  2. 24.10.2012 at 7:03 am

    Very interesting post! I have been working with a nonprofit for the last four years that was started by an entrepreneur. Our entrepreneurial founder struggled with balancing the board oversight with being able to make changes and tweak our business to be responsive to the needs of clients as she would if it were her own business. Eventually, we evolved into something like what you described, strategic principles to guide our decision-making as resources and opportunities come our way.

    The idea of strategic principles is a great one especially for small and new nonprofits to be able to take advantage of opportunities, current fiscal state, and make changes to programs that aren’t working. Simple, clear, and easy to work – what new and small nonprofits need to be successful.