The Planning School

The second prescriptive School

The Planning School

Like the Design School started in the 1960s Analytical, deterministic Quantitative (against qualitative) Created planners a profession Little analysis of the effectiveness of strategies coming out of this School

The Basics

Design = thinking Planning = quantifying the organization Success of the organization comes from controlling the numbers Steiner Model External Audit view the environment, then forecast, predict, plan - predict and prepare Internal Audit capacity, strengths, weaknesses

The Basics (contd)

Strategy Evaluation measurements

competitive strategic evaluations risk analysis the value curve shareholder values

Strategy Operationalization

Plan (focus attention on measureable goals) to Implementation (system of plans performed and measured) the Stanford system

The Basics (contd)

Scheduling the Process GE e.g. Types of Heirarchies

Premises
Very much like the Design School, but the whole plan is not only in the hands of the CEO CEO approves, responsibilities are often in the hands of planners Controlled, formal, planning

Distinct steps, minute stages, using set techniques

CEO responsibility for the overall results; execution rests with planners

Premises

Plans focus energy on detailed budgets, objectives, programs, operational plans, etc.

Troubles
In the 1980s, the growing conflict between planners and managers emerged Mintzbergs Seven Deadly Sins The staff take over the process The process dominated the staff Strategy did not drive action the system produced no real result, just a process

Troubles (contd)

Focuses on exciting games M&As, divestment, at the expense of the core business Few strategic choices are considered the first one is usually chosen Neglects organization and culture Single-point forecasting fails, especially in times of uncertainty

Fallacies

Determinism of forecasting Fallacy: quantification is rigorous; qualitative analysis is weak Detachment Fallacy: the process is integrated planners plan in the abstract; managers actions are detached from the abstract (in reality) Formalization Fallacy: formal processes always lead to good results Composition Fallacy: the whole is equal to the sum of its parts

Fallacies (contd)

Data:

Lags Misused stats Aggregation Data alone lacks context

The Great Fallacy

Strategic Planning is not Strategy Making The planning process is determined but how strategy is really made is not addressed. Making strategy is the black box of strategic planning.