Strategic Planning is about learning not fortune telling
It is a common excuse that "because nothing you plan ever turns out the way you plan it" it is not worth spending much time on planning. This misses the point entirely. Strategic Planning is a learning process not an exercise in predicting the future. Whilst this process is about setting out what you would like to achieve within a specified timeframe it is the exercise of identifying resources, skills, activities and processes that provides the learning experience that will enable your organisation to perform efficently and effectively.
What do we mean by strategy?
Strategy was defined by Alfred Chandler in 1962 as the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.
Strategic Planning requires commitment
Truly strategic choices are difficult or costly to reverse once made. The level of commitment distinguishes strategic from tactical decisions. Building competitive advantage requires commitment because a competitive advantage that does not require commitment is easy to imitate. Ultimately though all competitive advantage is temporary. Therefore to be successful over the long term competitive advantages must be constantly sort. Successful companies just run faster than their competitors.
A Different View
You will need to put aside the gratuitous bad language but the message is blunt and challenging. David Heineimeier Hansson, the creator of Ruby on Rails and partner at 37signals in Chicago, says that planning is guessing, and for a start-up, the focus must be on today and not on tomorrow.
I liked his view that all the tools you learn at management school are only for you. They don't help you to impress customers, it is only if they help you personally decide upon a great idea or build a great product that they help you to make a dent on the universe.
Innovation is to adaption as efficiency is to effectiveness. Organisations need to constantly improve what they do. They also must respond to changes in their environment so they need to be able to adapt to external influences. Adaption is about choosing what you do while Innovation is about improving those things you have chosen to do. Today oranisations need to be both innovative and adaptive if they are to survive.
The imperative for every organisation is to execute what they plan to do, well and then they will survive today's challenges but they need to choose carefully what they need to do in the future, that is they need to be adaptive, to meet the challenges of tomorrow.
A World Class Example
Watch this remarkable interview with Eric Schmidt the CEO of Google explain how Google approaches their strategic development.