Wednesday, 22 September 2010

Top "Soft" Planning Tip

When planning the execution of new or modified operations, there are some critical "soft" factors that any strategist or project manager should be aware of. Most importantly of all is this:

Do not separate the "planners" from the "do'ers".

Many successful strategies are formed through an "emergent process" of organisational learning - learning from those doing the work that feeds back into, and modifies the detailed plans laid out beforehand. One recent example of the U.S. military conducting successful emergent planning is the evolution of the "Surge" Strategy in Iraq. This has been the result of a bottom-up feedback of learning from the leaders on the ground, rather than from top-down directives. This identified issues that would otherwise have been missed had plans simply been the product of a top-down strategic review. As such, learnings such as the need to firstly provide law and security for the local population were implemented.

Disappointing results from traditional models of strategic planning also led General Electric's renowned CEO, Jack Welch, to begin his transformation of the company by making major reductions in the overly bureaucratic strategic planning mechanisms that were in place in the early 1980s. Over the next several decades, other leading corporations such as Intel, Honda, Royal Dutch / Shell Group, Exxon and Google have followed more successful "emergent" planning strategies. As a rule of thumb, highly volatile markets and dynamic environments are best planned for with this approach. The role of emergence relative to formal design increases as the environment becomes increasingly volatile and unpredictable.

Henry Mintzberg and colleagues at the McGill University in the 1980s developed the learning model of emergent strategy formation, basing it on the premise that the “complex and unpredictable nature of the organization’s environment, often coupled with the diffusion of knowledge-bases necessary for strategy, precludes deliberate control; strategy-making must above all take the form of a process of learning over time, in which, at the limit, formulation and implementation become indistinguishable.” Mintzberg's "emergent strategy" is a pattern of action that develops over time in an organisation, often despite vision, mission, and goals, or in addition to them. Decisions emerge from complex processes whereby individual managers have the freedom to interpret the intended strategy and to adapt it to changing external circumstances as they are happening, rather than realising after the event, say during the post-project review, usually when it's too late and damage has been done, or market-share has already been lost.

Emergence is the result of multiple decisions at many levels, particularly within middle management, and is a true bottom-up process. As said earlier, the military employs this approach in planning operations as well as in countering terrorism. At Intel, a key historic decision to abandon memory chips and concentrate on microprocessors was the result of a host of decentralized decisions taken at divisional and plant level that were subsequently acknowledged by top management and developed into a strategy.

Two key "soft" traits required at every level, above all others, for emergence planning to work, are opportunism and curiosity, starting with the CEO. Mintzberg advocates strategy-making be an iterative process involving experimentation and feedback and so, as with any trial and error learning, there will be moments where curiosity must prevail over uncertainty. If the boss needs high levels of certainty and exhibits anxiety in the face of the unknown, then he or she will not be sufficiently adaptable for such a volatile environment nor embrace emergent planning. This is also true where decision-making processes have become highly bureaucratic.

The learning organisation's role for the strategist or planner is very different to the role of the strategist in a sclerotically bureaucratic organisation. Self-proclaimed "control freaks" need not apply! In my next blog I will address the conditions required for emergent planning to work.