MIT Sloan Management Review

Corporate Strategy, Leadership and Organizational Studies

 

Should You Build Strategy Like You Build Software?

By Keith R. McFarland

April 1, 2008

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The strategic planning model is due for a “new release,” one that enables companies to keep pace with changing environments, quickly create and adapt strategy and empower people throughout the organization to make effective choices.

In many companies, the corporate planning department has gone the way of the dot-matrix printer. But if the analyst-driven, top-down, formal process of the previous era is dead, what have companies replaced it with? Not much, according to recent surveys of executives and managers of global companies. Many companies still hew to the decades-old annual strategic planning process, only now the responsibility for creating plans falls on group managers and department heads, with little central support. Other companies have jettisoned formal strategic planning altogether — centralizing strategy discussions to a few top executives or replacing planning with a hodgepodge of informal or semiformal retreats, executive leadership councils and board committees. Some observers have gone so far as to argue that strategy making is simply too uncertain and complex to be handled by a defined process. Unfortunately, senior managers may be throwing the proverbial baby out with the bath water. The fact that the process is failing doesn’t mean that strategy making is resistant to a process approach.

Consider software development. Around the same time that managers were losing confidence in strategic planning, software development went through its own crisis, as the demand for faster design and integration of increasingly robust systems began to make the traditional “waterfall” approach to software development obsolete.1 (See “The ‘Waterfall’ for Software Development/Strategic Planning,”... To read the complete article, login or sign-up using the form below.

 
 

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