The Perils of Strategic Planning - Associations Now Magazine - Publications and Resources - ASAE & The Center for Association Leadership

It's all right to discuss ways to improve the plan or actualize the plan or even modify the plan. You can certainly pay consultants or facilitators to help set up a strategic plan or improve the one you already have in place, but the nonprofit sector currently has little room for questioning the usefulness of the strategic planning process itself. It's time to challenge that reality.

I've been in senior-level management long enough to remember when W. Edwards Deming's Total Quality Management was supposed to be the answer to all of our management and planning problems. I've spent countless hours listening to supposed experts walk various teams through expensive training programs with little to show for it at the end of the day. I remember other experts singing the praises of Management by Results as still others told us that Management by Objectives was the true path to enlightenment. Each new system was touted as the unassailable answer, and woe be the executive who dared to question the process, since one core dynamic built into each system is the dictate that those who question the system are the enemy. It was a frustrating time for workers on the lower rungs of the leadership ladder who questioned the process, which led management to think they were not team players. Sadly, this kind of shortsighted thinking is still common in our industry.

Not too long ago, I sat in on a strategic planning session with a facilitator who, for $5,000 a day, led a board through the strategic planning process. In his approach, he used Texas Instruments as a business model for the process, giving the impression that it was a success story. At no time did the facilitator mention that Texas Instruments later abandoned this system after a long series of marketing disasters. At no time did the facilitator mention that the system he was recommending had been described by a senior executive at Texas Instruments as a paperwork mill that made it absolutely impossible to respond to anything that moves quickly.

What worries me most is that so many in the nonprofit sector assume that strategic planning is the way to plan. There is a presumption of quality and effectiveness to strategic planning that is simply not justified by results. Many others have logically and creatively debunked the notion that strategic planning is an essential function.

Henry Mintzberg's brilliant study, The Rise and Fall of Strategic Planning, is the place to start if you want to liberate your thinking. This classic and compelling work traces the rise of strategic planning from the early 1960s through its heydays in the 1970s and 1980s. It also outlines the reasons behind the demise of strategic planning in the 1990s. Mintzberg fundamentally takes the process apart and offers compelling arguments that strategic planning discourages change, narrows a company's vision, limits flexibility, and is in fact oxymoronic. The system fails more often than not because strategy is about synthesis and planning is about analysis. Even more unsettling, he points out, is the "assumption of detachment" that separates strategy from operations to the detriment of the organization.

Now the real irony is that Mintzberg is also a past president of the Strategic Management Society. The book ultimately condemns the strategic planning process as one that doesn't work anymore, and it warns that the process can be downright dangerous. My favorite quote in the book comes from his collaborator, J. Brian Quinn of Dartmouth, who said, "A good deal of the corporate planning I have observed is like a ritual rain dance; it has no effect on the weather that follows, but those who engage in it think it does. Moreover, it seems to me that much of the advice and instruction related to corporate planning is directed at improving the dancing, not the weather."

Larry Bossidy, retired chairman and CEO of Honeywell International, and Ram Charan from Harvard Business School point out that it is time to radically change the way we think about business. In Execution: The Discipline of Getting Things Done, they say the following about strategy: "Strategy? So much thinking has gone into strategy that it's no longer an intellectual challenge. You can rent any strategy you want from a consulting firm." In their follow-up book, Confronting Reality, they argue that the methodologies used to plan the future of business have steadily drifted away from reality, and they point out that "the strategic plans of most companies don't work." They didn't say some. They said most.

From his classic In Search of Excellence back in 1982 through major works like Liberation Management andThe Circle of Innovation, Tom Peters is certainly one of the most influential business thinkers of our age. In his recent Re-Imagine: Business Excellence in a Disruptive Age, Peters sets out his new philosophy in which he states it is the foremost task—and responsibility—of our generation of leaders to reimagine the entire business process. To that end, it is necessary to break away from that which does not work if we are to free up time to move forward. When it comes to management, he states that one of the three "Losing Bets" of the 20th century was the "Strategic Planning Bet," and he argues that we must reinvent the process of creating strategies by emphasizing informal learning and personal vision.

It's also worthwhile to look at ASAE & The Center for Association Leadership's 7 Measures of Success, which applies Jim Collins' Good to Great methodology to associations. 7 Measures notes that textbook strategic plans were most common not in the remarkable group of associations but in the less-successful comparison group of associations.

It is now a digital world. The internet and affordable high-speed technology have radically reduced timelines and profoundly changed the way we need to operate and the way we need to plan. Just a few years ago Meg Whitman, CEO of eBay, held enterprise strategy meetings once or twice a year. Now they are needed several times a week. Tom Peters is a bit more succinct when he says, perhaps a bit tongue in cheek, "You are lucky if you can write a five-week plan that makes any sense … yes … after five weeks." Speed and flexibility are essential to management success yet, time after time, I've found that the strategic plans in place at nonprofits, especially those in trouble, discourage both elements and are in fact inimical to success.

The job of association executives and board members should be to lead the organization. They must evaluate all that the organization does and examine how the organization does it. Planning is fundamental to success—always has been and always will be. However, it is naive and counterproductive to believe that strategic planning, as we know it, is the answer.

Are there great strategic plans out there? Yes. Do some strategic plans advance some associations? Yes. Is strategic planning necessary for association success? Absolutely not.

I took over the leadership of one national association that had a tightly coordinated and fully orchestrated strategic plan in place thanks to a very expensive outside consultant and many, many hours of board participation. The directors were stunned when I informed them that they would run out of money and have to shut down in 18 to 24 months unless the association made some radical changes immediately. They spent so much time planning for the future with a lot of big audacious ideas that they failed to get the current work done to keep the association solvent. I've seen most nonprofits regularly waste valuable staff time on mountains of useless paperwork in order to justify that which should be obvious. Here is the crazy thing: When I work with an association in crisis and point out that the strategic plan is a waste of time and should be ignored, it is typical that they confess individually that they always thought it was a waste of time but they didn't want to rock the boat. It's time to rock the boat.

Flexibility and fluidity, not strategic plans, are the keys to success. Flexibility itself has become a science with its very own Journal of Flexibility Management; however, I am talking about the ability to respond quickly without moving through layers of committees for approval to adjust the plan. Here is a simple example of flexibility in the workplace:

The planning committee for an annual meeting had agreed to test a jazz dinner cruise as a spousal event. The cruise boat held up to 325 people and the association would make a $7 profit on each ticket sold with no minimum commitment. When the cruise event sold out in two days, the meeting planner immediately asked permission to book an additional cruise boat. Permission required the approval of the planning committee, which met every other month. The planner received the go ahead almost two months later—just 10 days before the event. In the interim, 250 members trying to book the event were told to wait and see if another boat could be booked, their conference payments could not include the cost of the boat ride since it was in doubt, all had to be notified that the cruise was available when approved, and all were then charged for the extra event. A classic example of wasted staff time, extra bank charges for an additional charged event, and poor customer service. A flexible organization would have empowered the planner to make the needed addition or, at the very least, allowed the chief staff officer to decide. Members would be happy, staff time would be saved, and profits would increase. If the addition of another boat turned out to have a poor result with just a few more registrants, a great board in a flexible association would still say, "That was a smart call."

When I served as the vice president of a university our standard process for hiring senior-level staff required a vetting process that involved five interviews and six to 10 months. The process was labor intensive, highly repetitive, and written in stone. Our compensation package was excellent and typical of peer institutions, but it was common that half of the candidates moving into the late stages of interviews would inform us that they had accepted employment elsewhere. I will tell you that almost all of the candidates who accepted another position during the process were the top choices in each round of our interviews.

The outcome of the university's strategic plan requiring input from so many teams is that we regularly lost our best candidates because of a cumbersome process. If you think it through all the way, you will realize we actually ended up hiring people who normally would have been our fourth or fifth choice. We lost our top candidates to institutions able to make a decision in a timely fashion.

One of the very best plans I've ever seen in the nonprofit sector was just two pages. At the top of page one was a brief statement that basically said, "We are doing a very good job and we believe that these three things will make this organization even better. We believe they are three things we can accomplish next year."

Below that were three goals for the coming year with the names of staff and board members in charge of accomplishing those goals, a very rough timeline for each, and a goal number for success. The second page listed two additional goals for the following year with staff and board members assigned to each with the understanding that they were "B" list items. It would be nice to accomplish them but not mandatory. The plan could actually have been collected on one page, but they used two for graphic clarity. This national organization had an annual operating budget of more than $10 million, and it consistently received very high satisfaction ratings from its members.

Far too many nonprofits have become process fat. When Tom Peters talks about reimagining the business process, he is not talking about the process from the 1950s or 1960s. He is talking about the way we do things today and the need to break away from practices that do not work. He also emphasizes that a successful process will emphasize informal learning and personal vision. If we are to lead successfully, the first step requires us to examine the basic tools we are using.

In other words, you can drive many nails for many years with the heel of a shoe, convincing yourself that the shoe is the very best way to drive a nail. You might even slap yourself on the back when you discover that loafers work much better than high heels. In some ways, it actually makes sense, up until the time someone introduces you to the hammer.

James F. Hollan, CAE, is president and CEO of GALA: Globalization and Localization Association. Email: jimhollan@comcast.net

Marnie Grona, May 15, 2009
Todd Peterson is making this easy for me. I agree with him wholeheartedly. Thanks Todd.

Todd Peterson, December 15, 2008
Great article and excellent point. On the other hand, I am a bit skeptical of the critics who give the article only 1 star. A 1-star rating is really extreme, I would think. It seems to represent such a significant level of distaste that I would question the objectivity of those reviews. Could it be that they have a vested interest in the process? The criticisms seem fall flat.

William Golden fairly identifies himself as a "professional planner". I suspect he is not the only one that sees this article as an assault on his livelihood.

Granted the critics make some valuable contributions, e.g.:

* the difference in time frames between tactical and strateigic planning
* operational versus strategic planing
* and Morgan Ramsey's view that it is the process of strategic planning and not the outcome that counts ("...engaging in strategic planning for the plan is as useful as engaging in meetings for the minutes..." when we all know the real reason is to convey an air of authority and grandur to business decisions and to keep consultants off the unemployment lines).

However ultimately the real issue has to do with resource allocation, mainly money and board time. No one is saying that you operate without strategy, but that you don't eat up your resources to do it, and instead focus on fluidity and flexibility.

The alternative is not between no strategy and strategic planning, but between flexibiltiy and rigid over-investment in creating a plan that either will not be followed or that is so expensive and high a priority that it polticially rules out even necessary deviations from what is essentially the creation of a corporate orthodoxy, a 'constitution' of sorts.

Morgan Ramsay, September 18, 2008
Strategic plans are not necessary outcomes of strategic planning. The actual plans are necessities of communication. For the same reasons that we set agendas, we write strategic plans. For the same reasons that we record minutes, we write strategic plans. When we don't need to communicate, we don't need plans. When we don't need to learn from the past, we don't need plans. Communication is our business. Learning from our mistakes is vital to advancing our missions. We need plans. We need planning even more.

Everything "strategic planning" is about the process. Plan templates assist with collecting and organizing information. Facilitators are tour guides. Planners should adopt a process orientation. After all, strategic planning is the process of bringing people together to think critically about issues whose resolutions are keys to the success and long-term sustainability of organizations. Who would agree that willful ignorance of the issues central to the continued existence of their association is good for the gander?

Hollan is not mistaken though: most strategic plans really don't work! The cause, however, is not because strategic planning is a wasteful luxury, but because most attempts at strategic planning falter. Most planners simply miss the point — they fail to recognize that engaging in strategic planning for the plan is as useful as having a meeting for the minutes.

Amy Hissrich, September 07, 2008
Submitted on behalf of John Argenti (United Kingdom). The world is still full of senior executives who, even after four decades, have still not appreciated the crucial distinctions between Strategic Planning and Operational Planning, Business Planning and Budgeting. As Mr Lobue’s Review so clearly pointed out, both Mr Hollan’s examples of disastrous strategic planning were plainly not strategic but were purely operational.

The key distinction is that strategic is, or should be, solely concerned with very big decisions which take effect over very long periods of time. These require an entirely different process of decision-making from operational planning. When doing operational, short term, planning you (1) need to include huge amounts of detail – but this will kill strategic planning stone dead because of the ‘seeing the wood for the trees’ phenomenon. And (2), far more seriously, if you use short tem planning techniques to do the long range stuff you will fail to use the risk-reducing techniques that are essential when forecasting ahead several years but which are not required for short term decision-making. Have a quick glance at argentisys.com for some further clues.

No wonder ‘strategic planning’ doesn’t work for those who use short term tools for the job!

John Argenti

Bruce Watson, September 07, 2008
Hollan’s article is written in a vigorous, authorative style that may make it engaging for people struggling with the issue raised, “strategic planning”. However, please don’t mistake “vigor for rigor”. The author, James F. Hollan, muddles ‘strategic planning’ with ‘operational planning’ as many managers and consultants do. His article is therefore highly misleading. It does a huge disservice to NPOs, in particular, because many of these organisations are unfamiliar with effective strategic planning but find that they must now begin to apply it to survive. The article could prompt organisational boards to erroneously come to the decision that strategic planning is a waste of time. I say categorically, strategic planning isn’t a waste of time when it is understood and done well. In Australia there a Standards for developing governance policies and “strategy” is a primary function of organisational boards. Strategic planning must be taken seriously by all organisational boards and directors. And, strategic planning is not “rocket science”.

1. Strategic planning assumes that an organisation must be responsive to an environment that is dynamic and hard to predict. Strategic planning stresses the importance of making decisions that position an organisation to successfully respond to changes in the environment, perhaps over the next 3 to 5 years. ‘Real’ strategic plans are dynamic and are revisited at least once a year to see if the strategic statements are still relevant or need to be updated.

2. Operational plans primarily affect the day-to-day implementation of strategic decisions. While strategic decisions usually have longer term implications, operational decisions usually have immediate, perhaps up to one year, implications.

To clarify the difference between strategic and operational plans I offer a simple example from my work in organisational development and governance facilitation. I recently facilitated three year strategic planning for the Board of a local community centre. A strategic area of development became evident in the broad area of “branding” and more specifically “To develop the Centre’s unique identity” – a strategy. In comparison to other community centres in the wider locality it truly was unique and it made enormous sense to be strategic in its future development. One of the operational components, described in the subsequently developed business/operational plan, to be achieved within 6 months, is to put resources into the “Centre and Gallery website design, development and implementation” – an operational activity directly related to the strategy statement.

It makes sense for any company, business and NPO to plan for the future. I don't mind vision statements, mission statements but they have tended to become rather passé and meaningless. I once worked in a group as an employee that argued for almost an hour over the vision statement before anything else was considered. How could this one activity lead to any significant and lasting change in the organisation? And “mission” has a combative tone that doesn’t fit well in the NPO sector at least. In my view, the vision and mission statements, if they are really needed, should be done last! The pragmatic approach to strategic planning is to consider an organisation’s purpose, beneficiaries, targets, a SWOT analysis (i.e., strengths, weaknesses, opportunities and threats), performance indicators and the rest. These can provide a practical framework on which to develop strategic statements to be included in a strategic plan. Importantly there should only be about six strategic statements in any strategic plan, not 20 pages of waffle and spin doctoring that no-one will read.

So often, it appears that all the right, emotive words are used in strategic plans, like "excellence" and "people are our greatest asset" but I can't help thinking that many strategic plans are an end rather than a dynamic beginning - "Thank goodness the plan is done, now let's put it on the shelf and get on with the real business" seems to be a common reaction. And such a reaction is perfectly understandable if we take into account the gobbledygook plans that so many Boards ratify and yet are none the wiser for the effort involved. It is appalling that in many cases the blank spaces under the common headings found in mainstream strategic plans are mindlessly filled in, with considerable time spent first on what the correct words should be in a vision statement - e.g., should it be "community services" or "services to the community?" - to the neglect of more pressing matters. How a meaningful vision statement or mission statement could be developed without understanding the purpose, beneficiaries, targets, SWOTs and performance indicators of any organisation beggars belief.

We need to step back from the mainstream strategic planning formulas, and the corporate speak, and take a fresh view, before dragging out last year's strategic plan, making a few cosmetic changes and spending a small fortune on a new glossy cover. For example, John Argenti challenges traditional organisation aims in his book "Your Organisation: What is it for?" - note that he asks "what is it for?" not "what does it do?". He goes on to provide a persuasive argument on the 'beneficiary doctrine' and defines organisations as "a group of people acting together to generate a satisfactory benefit for its intended beneficiaries". A fresh viewpoint. A needed viewpoint. A sensible viewpoint. And it is based on over 40 years of international experience.

Argenti argues:
"We are increasingly dependent on organisations today for everything we value most. Yet most Non-Profit Organisations (NPOs) have not defined what they are trying to do for whom, nor have they been able to measure or monitor their results (or they say they cannot; mercifully, though, as a rule, they do behave with consideration for others).

And in remarkable contrast, most companies do know what results they are supposed to be achieving and they monitor their performance closely and continuously, but alas, they often behave with scant concern for others and frequently and casually debase so many aspects of our quality of life.
It really does matter to us that so many companies behave so badly—the face of capitalism really is unacceptable today. And it really does matter that the performance of all those non-profit making organisations is either unknown, unknowable or downright useless. The beneficiary doctrine says three things about all this:

1. That every organisation, whether company or NPO, should set out to benefit one clearly identified group of beneficiaries, and that a single, long-term, verifiable, target figure should be set to reflect what it is trying to do for them. If it cannot set such a target it should be re-formed until this becomes possible.

2. That companies and NPOs - indeed all of us - are ill-served by the stakeholder theory. The no harm principle and the principle of engagement should be adopted in its place.

3. That a separate board of non-executive governing directors be appointed to socially significant organisations to set explicit standards of long-term corporate performance and corporate conduct for them, and to monitor their performance against these. In view of the failure of all our current systems of governance to restrain the power of the modern manager, an explicit recognition of the distinction between elected governance and executive management is required to safeguard all our more vital organisations; then the goal of true corporate democracy would be in sight.

The application of this three-part doctrine will result in a kaleidoscope of new types of NPO together with a most spectacular improvement in their performance, and, taken with enhanced performance and behaviour from companies, will lead to a greatly enriched standard of living and quality of life."

The Purpose Sequence
1. Who are your intended beneficiaries - who are the people for whose benefit your organisation exists?
2. Exactly what benefit are they expecting from you?
3. How do you measure this with figures?
4. What level of performance do the beneficiaries consider satisfactory, and, even more important, what level would they say is unsatisfactory?
5. What level of performance did you actually deliver to them over the past five or ten years?
The best thing an NPO, and indeed any company or business, can do is to get guidance and preferably outside facilitation for strategic planning from someone who knows what works and what doesn’t. I tend to call it ‘authentic strategic planning’ to separate it from gobbledygook that plagues so many organisation development systems and quick-fix solutions. I’ll happily put the Argenti System of Strategic Planning against the gobbledygook anytime! Because it works. www.argentisys.com

Dr. Bruce D. Watson, DEd, FAIM, Founder and Principal,
HEADS TOGETHER www.headstogether.com.au

Jamie Notter, August 28, 2008
My one-word review: Amen! I (and many others) have been making this same argument for years. While I think the debate about whether strategic planning is the right "answer" or not is flawed, I do also think that some of the thinking underlying strategic planning has problems that this article starts to address. Planning is logically sound, but assumes a quite linear and mechanistic view of the world that simply does not match with a more complex reality. Do you really think you need a linear plan in order to have a strategic direction?! Planning and strategy are just separate pieces of the work of an association. They should be connected, integrated, synthesized, but not merged. I know it's disappointing to many that the article does not provide an alternative to strategic planning, but that's impossible. The "alternative" is really a different view of organizations and a different understanding of strategy, one that doesn't seem to make sense to those in the strategic planning camp. The two sides of the debate seem to be solving different problems. That's why this debate is so fiery, and it is why it never ends.

William Godden, August 22, 2008
Mr. Hollan’s premise that “strategic planning stinks” is misleading and (pardon the pun) short-sighted. While most planning professionals would concede that he is correct that most strategic plans do not work, they would argue that most strategic plans fail not because the plans are no good, but because implementation and long-term management commitment “stinks”.

Sadly, many leaders out there will buy Mr. Hollan’s argument because strategic planning forces managers to think about tomorrow, which is difficult. Many businesses and organizations find it easier to respond to day-to-day challenges rather than work toward where they want to be at point X in the future. A better argument is businesses need to do core things well every day, set and achieve realistic near-term goals, and simultaneously focus on where they need to be 5 to 10 years into the future. Smart leaders are actively involved in both short- and long-range planning where their longer-range objectives drive their near-term strategies. It is worth keeping in mind: no plan = no direction = high risk.

Thoughts from a professional planner.

Michael LoBue, CAE, August 14, 2008
It's hard to imagine that anyone involved in strategic planning, and more importantly trying to implement their plan, would find fault with Mr. Hollan's basic premise that it's not a panacea.

However, the case made for improving strategic planning is not well made in this article. The examples cited have nothing to do with "strategy" and board members should never have been involved in an execution question for hiring a second cruise boat for a meeting or the hiring positions other than the chief staff officer. Those are examples of bad management, not failed strategic planning.

It was also a surprise to read a "Tom Peters" reference. I didn't think he was cited as a credible source since he was "outed" as having not actually based his "In Search of Excellence" on real research but anecdotal experience.

Mr. Hollan's topic is certainly an important one, but I think he misses the point -- strategic planning is not the problem so much as the way it's actually practiced. It's also important to distinguish between "planning" and "executing the plan". Or that strategic planning should be less about the organization and more about the impact outside itself the organization.

This article would have been more useful had it been more focused on constructive alternatives and failings that had more to do with strategic planning than other forms of organization dysfunction.
Michael LoBue, CAE

Edward Rekas, August 05, 2008
I agree with Hollan that strategic planning is not necessary for non-profits, however, the examples he uses to show its pitfalls have nothing to do with 'classic strategic planning'. Rather they involve poor execution related to non-profits' bureaucracy proliferation.

I spent the first half of my career in industry and when SP first was described in the 1970's it started with the standard SWOT analysis, but then it asked what are the 3-5 most important objectives for the organization to achieve or else risk its existence. Management then worked through the issues, assigned responsibilities and deadlines. The group would meet quarterly to review progress toward the critical objective. The process worked very well. The simple and successful plan mentioned on pg. 78 appears to have some of these characteristics. However, I would argue that an objective with a one year horizon is not 'strategic'.

SP can work well if managed properly.

It seems that no one understands that