Are a systematic strategic planning process and a formal strategic plan detrimental to innovation and agility?

I’ve recently worked with an entrepreneurial company that has more than two thousand employees worldwide and annual revenues approaching a half-billion dollars—and it has no strategic planning process. Its “strategic plan” is whatever the founder and CEO decides to pursue, which means the plan has many consistent elements year to year plus a stream of new ventures that aren’t even on the radar screen when the year begins. It’s a highly innovative, flexible, and agile company that has grown by 15% or more a year for nearly three decades. Such results suggest that its “strategy” is working.

From a Baldrige perspective, however, I can see how a more systematic approach could be beneficial, especially in the areas of:

• Involvement by more participants. More voices in the discussion would help clarify the issues and the opportunities and engage more people in owning the plans they help design.
• Inputs to the process. A more formal approach to gathering and analyzing critical information upon which any plans are based would minimize the risk of missing something important.
• Alignment. A company aligns its people with what it is trying to accomplish through a strategic plan and performance measurement system. If you have neither, the risk is that resources are being wasted on irrelevant activities.
• Communication. A strategic plan and the deployment of that plan through action plans communicates what is important to the company. Without that communication, uncertainty is more likely as people react to whatever signals they are getting from the CEO.

The question is: How do you develop a more systematic planning approach without stifling the innovation and agility that have made this company successful? Does the Baldrige model allow that such an approach may be vital for an entrepreneurial company?

In “Adopt a Cow: Strategy as Improvisational Theater” (HBR, October 12, 2010), Rosabeth Moss Kanter writes that, “For entrepreneurs and innovators, it’s absurd to equate strategy with a Plan, with a capital P, all wrapped up in one neat package to be studied and followed slavishly.” Baldrige Award winners follow a Plan, with a capital P. Could an organization without such a neat package win the Award?

To read more about strategic planning, click on these articles:

• Challenge Your Assumptions
• The Most Important Question in Strategy
• Revolutionary Thinking
• Be Prepared
• Developing Agility on 3 Fronts
• Where to Play and How to Win
• Making Your Organization Adaptable

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