Strategic planning can smother innovation

from Leis Network - Organizational development and complexity

Strategic planning, like change management, has a spotty track record buttressed by reams of research on why the idea and process looks so good on paper but delivers lackluster results. That does not mean we should not plan or develop strategies but we should be aware of their fundamental issues, which are outlined fairly well in an article at Innovation Excellence.

How strategic planning smothered a company

Planning is control and therefore its weakness is that it can destroy emergence.

Jim Clemmer writes an interesting article on strategic planning which I believe is really about destroying a scale free network. Here are some of the good bits:

From a standing start, a financial services company had two decades of very strong growth. They were entrepreneurial and opportunistic… But its growth wasn’t always a pretty sight.

Product and service ideas seemed to come from the wrong people, at the wrong time, in the wrong ways, and for all the wrong reasons. Often they had to be developed on a shoestring budget… However imperfectly, customers were well served, product leadership was established, and in key markets, dominance was achieved.

Then senior management changed. These were “processes out of control”, management declared.

So a Strategic Planning Committee was formed. They surveyed, researched, collected data, discussed, analyzed, diagrammed, and planned marketing strategies and new products. They wrote a powerful vision, values, purpose, and strategic planning document that could have been a business school case study.

Each thoughtful new product and marketing campaign took off with a bang…and then slowly fizzled… But the company’s history of ever-rising sales success flattened out. Key people started leaving. Passion and energy levels slowly sank. Today, the company is struggling to catch up with its changing markets and ever-stronger competitors.

Innovation Excellence | Strategic Planning Smothers Innovation
Jim Clemmer
Sun, 30 Oct 2011 05:19:41 GMT

Clemmer goes on to describe how stabilizing planning only provides comfort for the bureaucratic machine. There is a difference between analysis and synthesis. Then he outlines the characteristics of “strategic planning traps.”

I have been a strategic planning consultant, although I never fell into the common trap of believing that senior management vision, data analysis and process could replace emergent ideas from specialists and customers. The dirty secret is that most consulting in large companies is primarily about listening to Associates further down the food chain and passing on their ideas to executives who are not utilizing their own communication channels. In other words, their hierarchy has only one direction.

Scale free network perspective

But there is another clearer perspective to view the above story. The new management team killed the characteristics of the scale free network. They replaced it with an organizational structure that was hierarchical and controlled. They destroyed autonomy and robust redundancy, replacing it with a top-down model that by its nature negated self-organization. They took away the ability of the organization to adapt.

Innovation is most often gradualism, more akin to evolution than paradigm shifting originality. Complexity uses the term emergence to describe this innovation. Planning must always seek to avoid crushing that gradualism, and that is its greatest weakness. We keep forgetting that people are not machines and that treating them as such causes immediate disengagement.

The rise and fall of strategic planning

Clemmer refers to a new book on strategic planning that is a refreshing read. We find it is best ingested with a general knowledge of complexity. In fact, there may be a growing trend in innovation and management science in general; it seems to be learning the rules of complexity as it concentrates more on flattening organizations and decentralizing. The book is worth reading.