Planning in Competitive and Turbulent Environments

Competitive environment.

• Hierarchical control: Top management commitment will automatically generate acceptance of and successful implementation of strategic plans.
• Linear historical projection of trends: Looking at a few selected historical performance and market criteria to extrapolate into the future on a linear timeline will produce incremental improvement in market share and position.
• Analysis is more important than synthesis: Process, consolidate, and aggregate hard data based solely on technical and economic criteria using analytical techniques developed and managed by experts.
• Money controls performance: Peoples performance can be centrally controlled by a set of numbers tied to a compensation package based on competition between individual members of the enterprise, as well as units of the enterprise.
• The firm as a machine: External complexity and uncertainty is managed by reducing the enterprise into strategic business units (parts), developing plans for each one, adding them up and ignoring the interactions across unit boundaries.
• People are cogs constrained by the machine. Problem solving and improvement in technical processes are adequate to adapt the business to its environment.

People act as if...

• Stability is a given: The enterprises environment (task and global) is stable and unchanging until its hit by a discontinuity like a mealy bug, a Sony, a Toyota or a CNN.
• The old ways are the right ways: Unspoken assumptions about how we can continue to be successful (embedded in unit boundaries, budgeting, rewards, information systems etc.) need not be explored.
• Problem-solving is enough. Success comes from reacting resourcefully to problems within predefined and unchangeable endpoints.
• Thought separate from action: Responsibility for thinking and doing are divided over and over again as one steps from one level of the hierarchy to another.
• Cooperation can be mandated: Political infighting and fiefdoms are part of human nature and must be dealt with by savvy managers. They can motivate people to act by telling them to be committed.
• One right way: Reducing a leaders flexibility of response with financial controls/administrative procedures will establish a clear direction within which resources can be committed in a coordinated way.

Turbulent, uncertain environment

• Distributed control: Commitment is earned through participatory strategic planning combined with responsibility for implementation of plans.
• Creative synthesis of trends and desired future: We encapsulate the past and expected future in the present to design a desired future. Basic continuities are carried forward while environmental constraints are indirectly overcome.
• Analysis flows into synthesis: The integration of analysis from multiple sources with direct perception arising from interaction with customers, associates, suppliers, etc. produces a synthesis or a holistic view of the environment.
• Determined, inspired people control their own performance: Energy, commitment and initiative are captured when peoples ideals are embedded in their plans for the future.
• The firm is a human community: External complexity and uncertainty can be managed by building adaptive capacity into the organization, its planning and all the people within the enterprise.
• People are flexible within an adaptive enterprise: The ability to plan and respond quickly overcomes uncertainty and becomes an inbuilt capacity.

People act as if...

• Discontinuities are to be expected and searched for: The environment (industry and global) can shift and change at any moment.
• Constant vigilance is necessary: Assumptions of how to be successful in our industry and global environment must be continuously surfaced, updated and built into our internal systems to conform with the external reality.
• They are actively adaptive: Success comes from sensing trends and initiating change by exploring all possibilities since the achievement of specific endpoints is uncertain.
• Devolution of authority: Those responsible for different aspects of the business plan for and have the necessary authority to implement those plans.
• Cooperation requires processes for managing conflict: Sorting out what is agreed/not agreed and integrating work across groups makes us one community that will be able to cooperate to bring plans into action.
• Many paths to success: People are purposeful. They can be responsibly creative to produce a desirable set of goals and be actively adaptive to achieve their endpoints with flexible behavior.