The document discusses three common "comfort traps" that organizations fall into with strategic planning: 1) Mistaking planning for strategy by focusing on initiatives and financial projections rather than strategic choices; 2) Applying cost-based thinking to revenue planning which fails to recognize that customers control revenues; 3) Adopting self-referential strategic frameworks that focus on internal capabilities rather than customers and context. The document recommends that to escape these traps, organizations should keep strategy statements simple, recognize strategy is not about perfection, and make strategic logic and assumptions explicit.
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The Big Lie of Strategic Planning
1. The Big Lie of
Strategic Planning
Roger L. Martin
2. Comfort trap 1: Strategic
Planning
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Strategic plan usually have three major part;
1. vision or mission statement that sets out a relatively loftily and
aspirational goals
2. list of initiative
3. conversion the initiative into financial
•
typically isn’t explicit about what organisation choses not to do and why
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mistaking planning for strategy is common trap
•
let strategy become planning (Strategy is not planning — it is the
making of an integrated set of choices that collectively position the firm
in its industry so as to create sustainable advantage relative to
competition and deliver superior financial returns.)
3. Comfort trap 2: Cost Based
Thinking
•
the trouble is that planning-oriented managers tend to apply familiar,
comfortable cost-side approaches to the revenue side as well,
treating revenue planning as virtually identical to cost planning and
as equal component of overall plan and budget. all to often, the result
is painstaking work to buildup revenue plans salesperson by sales
person, product by product, channel by channel, region by region.
•
for cost, the company makes the decision. But for revenue, customer
in charge
•
predictability of costs is fundamentally different from the
predictability of revenue. planning can’t and won’t make revenue
magically appear, and the effort you spend creating revenue plan is
a distraction prom the strategiest’s much harder job: finding way to
acquire and keep customers
4. Comfort trap 3: Self-Referential
Strategy Framework
•
in identifying and articulating a strategy, most executives
adopt one of a number of standard frameworks. unfortunately,
two of the popular ones can lead the unwary user to design a
strategy entirely around what the company can control.
•
deliberate strategy (intention) vs emerging strategy (adaptive)
•
customer and context are both unknowable and controllable,
many executives prefer focus on capabilities that can be built
•
building capability them self often do not compel a costumer
to buy
5. Escape those trap
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Rule 1: Keep the strategy statement simple
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Rule 2: Recognize that strategy is not about perfection
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Rule 3: Make logic explicit
•
•
What do you need to believe about customer, about
evolution of your industry, about competition, about
capabilities?