“Conventional strategic planning is not actually scientific. It lacks the creation of hypotheses and the careful generation of tests.” This is the thrust of this article from HBR by A.G. Lafley, Roger L. Martin, Jan W. Rivkin, and Nicolaj Siggelkow. I think it’s relatively good, and many of the ideas and techniques actually would work well combined with the Design Studio Methodology (a design thinking activity we practice).
The thrust of the article is first a deconstruction of ‘traditional’ strategic planning within enterprises, and then the introduction of design thinking activities for more coherent and effective strategy development. The arguments against traditional planning claim:
“The key is to recognize that conventional strategic planning is not actually scientific. Yes, the scientific method is marked by rigorous analysis, and conventional strategic planning has plenty of that. But also integral to the scientific method are the creation of novel hypotheses and the careful generation of custom-tailored tests of those hypotheses—two elements that conventional strategic planning typically lacks. It is as though modern strategic planning decided to be scientific but then chopped off essential elements of science.”
Lafley, et al. address just one issue with strategic planning as is currently practiced, focusing on the flawed scientific method employed, but assuredly, there are many others, as mentioned in the McKinsey Quarterly article, “Hidden Flaws in Strategy,” which goes into deep, rigorous look at strategy from a behavioral economics perspective (well worth the read!), but I digress. I think the quote above highlights something that is being taught in Lean Startup, but hasn’t yet made its way into enterprises and corporate boardrooms. Every person who has suffered (or triumphed) through a Lean Startup Machine weekend understands the grueling nature of exploring possibilities and reframing them as testable hypotheses. The article echoes the LSM methodology, stating:
“The team must produce more than one possibility. Otherwise it never really started the strategy-making process, because it didn’t see itself as facing a choice. Analyzing a single possibility is not conducive to producing optimal action—or, in fact, any action at all.”
The article goes on to explain that this possibility generation activity can occur at an all day offsite meeting for executives – which seems reasonable at first blush, but I would argue that it’s probably the least effective method. The authors also argue that it may be more effective with a balance of people and skills across the organization to spread the possibility-generation process over time so that people have the ability to reflect (day dreaming), think creatively, and build on ideas. This is where the article also sounds a lot like the design studio process we teach:
“It is perhaps most effective to start by asking each person to spend 30 to 45 minutes sketching out three to five (or more) stories. The stories do not need to be detailed; they should truly be sketches. After this exercise the group (or breakout groups) fleshes out the initial possibilities.”
Well, isn’t that interesting. Sketching, which as we know, is usually a skill believed to be the province of user experience designers – this is where UX meets corporate strategy. This abductive reasoning process of sketching, reflection, and critique combined with strategic tools like the validation board should help enterprise executives explore various strategic possibilities more effectively. The key to effective decision-making is based on the assumption that there are choices about which to decide, by definition.
“If you show us a company where the planners are different from the doers, we will show you a company where what gets done is different from what was planned.”
This quote is really important – and it’s one reason many large enterprises have a difficult time matching corporate strategy with effective execution, as well as why many digital agencies are seeing their client relationships strained – the dissonance between planners and doers. This is a solid reason why inviting executives, designers, engineers, customer support, and operations people to a few days of design studio – and then “getting out of the building,” to test some of their hypotheses, can be an effective (and more scientific), strategic planning process.