Strategic Planning In The Real World – Submitted To The University of liverpool DBA Learning Set

Strategic Planning In The Real World
Strategic Planning In The Real World

If you think about it, we don’t know how many times we have heard executives like ourselves talking proudly and endlessly about the smartness of ‘having a plan’, strategic planning, and/or acting on a plan.  How many of those plans actually worked? How much of our implemented strategies are actually emergent rather than deliberate in characteristics? The answer is that while in the by-gone era of administrative (command and control) leadership of the passing industrial age may be suitable for the classic strategic planning approach, the post industrial era where knowledge form the basis of organizational competitive advantage, the practice of enabling and adaptive leadership have become a necessity.  Unlike the physical resources of the past, knowledge is fluid, evolve and co-evolve to create a new form of knowledge time and again.  This is beyond management control and any effort to control it would prove detrimental and hinder the birth of organizational constantly refreshed capabilities and creativities.  The complexity which is popularly known as the complex adaptive system of the modern organization called for systematic as well as independent fostering of organizational learning.  This is what Peter Senge refer to as the Fifth Discipline (1997)

The Complex Adaptive System model argues that the world within which an organization need to survive and excel continues to dynamically evolve and co-evolve. Organizations themselves are potentially chaotic. To move from one dynamic state to another can be extremely difficult, and any intention in making a purposeful and concerted move towards one single desired state may be almost always impossible.  Here we are talking about the problem of aligning the individual and/or group interests of the actors that made the organization, and about the development of tacit knowledge into shared knowledge (Thietart and Forgues, 1995 & Stacey, 2001). In the world of nonlinear relationships (encompassing the traditional hierarchical and other boundaries that made up the command and control system within an the passing industrial age organization) with negative and positive feedbacks, the link between cause and effect of what is happening in between and among functions, departments, layers of an organization can easily be lost in translations (Stacey, 2011).

Morgan (1997), Nonaka (1991), Sanders (1998), Stacey (2011) offer a rather similar solution to face this uncertainty of the post industrial era.  They called for a purposeful reliance in ‘self-organization’. The central idea is for the organization to creatively manage strategic planning to adopt a given outline of some simple rule’, adaptive and/or contingency mechanism and leave the rest to ‘self-organization’.  In a world where rationality is bounded and thus where logical incrementalism is the rule of the days, having agents (within a self organizaing format) interacting locally according to their own principles in the absence of an overall blue print for the system they form could in fact lead us to what Mintzberg (2001) described as ‘deliberately emergent’ strategy process.

Reflecting on action and in search for the answer on how to best fit strategic planning within a complex system in a turbulent world, I found the experience of Shell as presented by Bovaird (2008) to be very useful.  Bovaird called  described how ‘meta planning approach’ which called for constant exploration, parallel exploration efforts by different organizational members and the combination of incremental steps (adaptive walk) with occasional major leaps as opposed to the traditional form of strategic planning have been successfully implemented by Shell to bring in consistently creative and implementable strategic planning and execution. The approach embraces the notion of ‘bounded rationality’ (there is only so much we can know; we don’t what we don’t know) and aim to facilitate or even utilize the ‘nature and strength of connections between agents and their schemata’ within a complex adaptive system and subsystem to meet the ever changing environment of the competitive landscape of the organization (Anderson, 1999).

In the case of Shell the adaptation has resulted in shorter time horizons of strategic plan and the shifting of emphasis from the use of strategic plan as highly defined guideline to treating it as a coordinating mechanism, and a performance and output anchoring tool (Grant, 203). The latter perhaps would serve as the ‘strange attractor’ (Stacey, 2011) that leads to a form of a symbiotic actions that would bring the organization to new level of knowledge (knowledge creation), knowing (evolving realities) and effective timely actions? Or even as Kim and Mauborgne (2009) would argue it would help the organization ‘shape the environment’, create its own market space/ ‘blue ocean’ (Kim and Mauborgne, 2009). This ‘strange attractors’ can take many forms and variations including some creative formulation of bonus/incentive tied to certain commonly shared outcome. Strategy meetings no longer strictly involved formal presentations but involved more “face-to-face discussion where assumptions and beliefs were challenged and critical issues identified” It is a strategic move from a ‘rational design’ to the ‘emergent process’ in the aim of constantly forming a ‘dynamic equilibrium around the strange attractor’

In conclusion, I would say that that although the complexity of a complex adaptive system and subsystem is a reality, the weakness of the linear form of strategy process and planning is not entirely because planning is useless or that we should only deal with whatever comes up whenever they come.  In fact, in my opinion, it is about the creation of an environment where communications are keys, where changes are welcome, and where  the content human behavior and interactions are explained as much in term of beliefs and desires as they are about rules, hierarchies and boundaries,

Reference

Anderson, P. (1999) ‘Complexity theory and organization science’, Organization Science, 10 (3), pp.216-232. http://ehis.ebscohost.com.ezproxy.liv.ac.uk/ehost/pdfviewer/pdfviewer?sid=add70dd6-a3ff-428e-9441-aabd4924cca6%40sessionmgr110&vid=2&hid=117 (accessed 7 December 2012)

Bovaird, T (2008) Emergent Strategic Management and Planning Mechanisms in Complex Adaptive Systems. http://ehis.ebscohost.com.ezproxy.liv.ac.uk/ehost/pdfviewer/pdfviewer?sid=d4af97bc-140c-4cc0-86c1-e75afaedbd02%40sessionmgr111&vid=2&hid=124 (accessed 10 December 2012)

Grant, RM (2003) Strategic planning in a turbulent environment: evidence from the oil majors. http://onlinelibrary.wiley.com.ezproxy.liv.ac.uk/doi/10.1002/smj.314/pdf (accessed 10 December 2012)

Kim WC and Mauborgne R (2009), How strategy shapes structure, Harvard Business Review, 2009, http://ehis.ebscohost.com.ezproxy.liv.ac.uk/ehost/pdfviewer/pdfviewer?sid=05627ea7-ce37-461d-8546-bd50c29d740a%40sessionmgr113&vid=2&hid=121 (accessed 5 December 2012)

Klieb L. Week 2 Lecture note, http://mym.cdn.laureate-media.com/UofLiverpool/DDBA/0007/01/downloads/UOL_DDBA0007_01_A_EN.pdf (accessed 8 December  2012)

Simon, H.A. (1962) ‘The architecture of complexity’, Proceedings of the American Philosophical Society, 106 (6), pp.467-482. http://www.informatics.sussex.ac.uk/courses/ModDis/Internal/SimonAoC.pdf (accessed 7 December 2012)

Stacey, R.D. (2011) Strategic management and organisational dynamics: the challenge of complexity. 6th ed. Harlow: Pearson

 

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