Strategy in Context

BHS0035H

Planning strategy
Dr Anna Zueva

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Overview
• What is planning?
• Brief introduction to planning tools and processes
• Fallacies of strategic planning
• Strategic planning vs strategic thinking
• Ensuring successful implementation of plans

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 Topic 2.1

Basic planning process assumptions

and tools

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Planning perspective assumptions

• ‘Thinking’ and ‘doing’ are different things

• ‘Thinkers’ and ‘doers’ are different sets of people
• Strategy-making is deliberate and formal process undertaken by
specific individuals (thinkers or strategic planners) who:
– are rational, impartial and well-informed
– can analyse the internal and external analysis of the organisation in
an objective and comprehensive way
– can provide a comprehensive comparison of strategic alternatives
• Strategy-making results in a ‘plan’ – a set and timeline of
specific actions to happen in the future

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Professional planners

Managers interviewed
by Grant (2003) for a
study of strategic
planning in major oil
companies
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Role of strategic plans
• Plans are a form of power
• They direct and structure organisational activity
– Set out goals and objectives
– Show who should be doing what, when and how
– ‘A way to circumvent human idiosyncrasies in order to
systematise behaviour’ (Mintzberg, 1994)
• They define and control performance
– Outline of organisational priorities
– Set of performance measures

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 Standard planning tools
Mission, Vision,
Objectives and Goals Evaluation of Internal
Analysis of the External Resources and Capabilities
Environment (strengths and weaknesses)
(opportunities and threats) • Value chain
• PESTLE • VRIO, 7S Analysis, BCG matrix
• Porter’s 5 Forces • Unique Selling Points (USPs)
• Porter’s Diamond
Synthesis:
• SWOT

Strategic options:
• Porter’s generic strategies
• Ansoff’s matrix
• Scenario planning and comparison

Strategy/performance evaluation:
• Key Performance Indicators (KPIs) 7
 Topic 2.1 Activity
Find your own strategic planner!
• One of the slides in this topic provided examples of job titles of
managers responsible for strategic planning in various organisations.
• Can you find your own?
• Explore websites of several different organisations and see if they
have managers or departments responsible for strategic planning.
• You can explore organisations from different countries and industries.

• Report your findings to class on Padlet -

https://padlet.com/azueva/j36xq45phzjv0lte

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Topic 2.1 Activity QR Code

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 Topic 2.2

Analysing the external environment

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PESTLE analysis

Political Technological
Factors Factors

Economic Socio-cultural
Factors Factors

Environmental
Legal Factors ORGANISATION
Factors

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Levels of environmental analysis

GLOBAL
ENVIRONMENT

NATIONAL
ENVIRONMENT

LOCAL
ENVIRONMENT

ORGANISATION

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Levels of environmental analysis

MACRO-
ENVIRONMENT

INDUSTRY
AND/OR
SECTOR

COMPETITORS
AND MARKETS

ORGANISATION

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PESTLE challenges
• Where to start?
• Information overload?
• What is relevant and what is not?
• How to rank different factors in importance?
• What is the implication of different factors for
the organisation and its strategy?

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 Topic 2.3

Strategy planning process

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 The planning process
Premises Planning Implementation and Review

Planning
studies
Fundamental
organisational
socio-economic
purpose Strategic Medium range
planning and programming Short-range
plans and planning and
programmes plans
Implement- Review and
Values of top Company
tation of evaluation of
managers mission, long- Sub-objectives Goals, targets,
plans plans
range Sub-policies, procedures,
objectives, sub-strategies tactical plans
Evaluation of policies,
opportunities strategies
and threats and
strengths and
weaknesses

Feasibility
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testing
 Strategic planning in Texaco

Grant (2003) 17
 Strategic planning in Amoco

Grant (2003) 18
 Strategic planning cycle

Grant (2003) 19
 Topic 2.4

Fallacies of strategic planning

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Fallacies of strategic planning
• Fallacy of prediction
– Will the world ‘hold still’ while plans are devised, implemented and
evaluated?
– What is the ‘planning horizon’ of an organisation?
• Fallacy of detachment
– Can thinkers really be separated from doers?
– Is ‘hard data’ sufficient for top management to understand what happens
in the rest of the organisation?
• Fallacy of formalisation
– A step-by-step system discounts the messier real-life learning and creative
processes.
– It also does not address information overload or create synthesis
• ‘Strategic planning’ is an oxymoron
Mintzberg, 1994 21
 Topic 2.5

Strategy planning vs strategic thinking

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Strategic planning vs strategic thinking

• Strategic planning:
– Really is ‘strategic programming’
– More detailed articulation of already existing strategies and
visions
• Strategic thinking:
– A manager synthesising all he/she learns from different
sources into a vision of the future business direction
– Inventing new ways of doing things and new things to do

Mintzberg, 1994

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The role of strategic planning

• Planners should be ‘helpers’ to strategic

thinkers:
– Supply analyses of hard data
– Act as catalysts of strategy-making, encourage
managers to think strategically
– ‘Programme’ strategy by operationalising visions
into specific series of steps

Mintzberg, 1994
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The role of strategic thinking

• The role of strategic thinkers is:

– Synthesis, intuition and creativity
– Creating an integrated perspective of an enterprise
– Articulate the vision for the organisation (but not too specifically)
• Strategic thinking cannot usually appear on schedule or be
pre-planned
– It must be allowed to emerge through an unstructured process of
free thinking and informal learning by people at various levels of an
organisation

Mintzberg, 1994

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(Hypothetical) strategic thinking an oil company
Strategic Thinking
The broad plan for the future is:
- To become a provider of renewable
energy
- To divest/terminate operations in the
fossil fuel sector
- Realisation that the organisation
may have the required resources to
accomplish this
- Realisation that this strategy may
ensure the long-term survival of the
organisation
Strategic Planning
Activities to realise this broad plan:
- How can the company use its
existing resources/knowledge to
realise this plan?
- How can the company acquire the
resources/knowledge that it lacks?
- What challenges in the external
environment will it need to address
(e.g. competitors) and how?
- What kind of support and where can
it find in the external environment?
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 Topic 2.5 Activity – Class Discussion
The job of a strategic planner

• What the following YouTube video about the working life of a

Corporate Director of Strategic Planning in the Baptist Health
Care medical services company in the United States.
• Try to identify the following aspects of a strategic planner’s job:
• What does the planner do?
• What qualities are required to be a successful planner?
• Post your thoughts onto Padlet in class -
https://padlet.com/azueva/c2lxfidr1eij0db1.

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Topic 2.5 Activity QR Code

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 Topic 2.6

How to improve your chances of

successful implementation of
strategic plans

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Plans fail when …
• They are based on low quality analysis
• They are unrealistic
• There are many of them and they are not
joined up
• There is no commitment to implementation
• There is no review/reflection process…
• … but also not enough built-in flexibility

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 Strategic planning failure
• 2012: Tesco’s plans to enter the US market are
under review
– “Fresh and Easy” stores in California, Nevada and
Arizona
– 5 years of work and £1.5 bn of investment and debts
• Planning took 20 years
– Two years of intensive on-the-ground research
– Senior execs lived with Californian families, established
secret test stores
• But ended up setting up stores it wanted and not
those dictated by the research
– Small packs instead of bulk buying
– British ready meals unfamiliar to the US customers
– Automated check-outs
• Did not back plans up with resources or made
them flexible enough
– Planned a rapid opening of 500 stores
– Did not consider the investment needed to keep
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existing stores afloat

Butler (2012), read the full article here.

Connecting thinkers and doers
• Plans not only need to be made but also
implemented
• Successful implementation depends on the ‘buy in’ of
all organisational members
– Everyone has to understand and be committed to the plan
• Participatory planning and/or decision-making is
often used to create the ‘buy in’

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Conclusions
• Planning is a complex and varied process
– Can involve many individuals within the organization
– Requires collection and analysis of large volumes of data
• There are many reasons why it can fail
– Operational reasons
– Conceptual reasons
• But plans still may be useful
– They are instruments of power

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References
• Butler, S. (2012). Fresh, but not easy: Tesco joins a long
list of British failure in America. The Guardian, Dec. 8th.
• Grant, R. M. (2003). Strategic planning in a turbulent
environment: Evidence from the oil majors. Strategic
management journal, 24(6), 491-517.
• Mintzberg, H. (1994). The fall and rise of strategic
planning. Harvard business review, 72(1), 107-114.
• Vilà, J., & Canales, J. I. (2008). Can strategic planning
make strategy more relevant and build commitment
over time? The case of RACC. Long Range Planning,
41(3), 273-290.

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