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II. The Challenges
The premodern Style Three leader builds her credibility on the foundation of a compelling vision. When effective, she keeps this vision alive by reviving it, updating it and reframing it to meet the shifting needs and interests of the people her organization serves and the environment in which her organization operates. A modern Style Three leader, who builds her credibility on the foundation of motivation, goal setting and goal monitoring, is likely to be challenged by the bridge that must be built between the modern vision she has created and conveyed, on the one hand, and the tangible realities that her organization faces in the modern world, on the other hand. As I noted in the 27th Blog, a tangible vision resides at the heart of effective and successful Style Three Modern leadership. Tangibility, in turn, requires the formation of a practical plan of action and the establishment of accountability with regard to this plan.
I propose that the keys to effective Style Three Modern leadership are primarily related to building the bridge that makes a vision tangible—and the foundation of this bridge is strategic planning. I focus in this blog, therefore, on some of the principles that must be kept in mind if strategic planning is to be successful. In setting the stage for the introduction of these principles, I begin with a brief history of strategic planning in modern organizations—suggesting ways in which this planning process has expanded in response to the shifting (and expanding) challenges that leaders of modern organizations face—especially Style Three leaders.
A Brief History of Strategic Planning
Strategic planning is an important—perhaps even fundamental—ingredient in the operations of any modern organization. Unfortunately, strategic planning is not easy to perform.. In part, it is hard to perform because leaders mean very different things when they speak of strategic planning. Strategic planning means different things to different people in large part because it has been used to address modern organizational challenges of many different kinds. I will briefly describe four versions of strategic planning that arose to meet the needs of a particular era in modern organizational life—building on the very thoughtful work of Henry Mintzberg in his classic book entitled The Rise and Fall of Strategic Planning.
While there clearly is overlap between the various forms of planning and they are often confused for one another, there are important distinctions to be drawn. Strategic or long-term planning typically involves a few key (broad-based, critical) issues which are studied or predicted over an extended period of time. For example, an organization might prepare a strategic marketing or sales plan for the next five years. By contrast, tactical or short-term planning focuses on problems associated with a specific setting, customer group or individual stakeholder. While strategic planning tends to look at a larger, multi-dimensional context (economic, political, geographic, demographic) and hence can focus on the future, tactical planning is deeply embedded in a specific context. Tactical plans in one sales region, with regard to one product line, or with reference to one specific customer group, may be quite different from tactical plans associated with any other region, product line or customer group in the organization. For example, a tactical plan could focus on sales training for a specific customer group. It may even be tailored around the need to respond in a unique way to a specific customer.
In recent years, a third term has been introduced, contingency planning. This form of planning typically combines long term and short term planning processes. Through the use of contingency planning, organizational leaders prepare several different organizational responses to possible (alternative) situations in the future. Alternatives of a pessimistic nature tend to point to the nature and extent of organizational “buffers.” For example, a contingency planning process can be engaged in the creation of several marketing plans for potential shifts in customer demographics or customer needs. Alternatives of an optimistic nature tend to point to the nature and extent of temporary and affiliate arrangements that can be constructed with regard to specific required resources (human, machines, facilities, etc.). Given these distinctions between strategic, tactical and contingency planning, I will turn briefly to four different version of strategic planning (the third and fourth versions actually combining strategic and contingency planning).
Version One: Program budgeting.
During the first fifty years of the 20th Century, many organizational leaders engaged in a systematic analysis of the relationship between program priorities and fiscal realities. For example: “given that we have only $40,000 available for new program development, should we focus on new program A or new program B? How much money will it take to begin Program A and how much will it take to begin Program B?” This version of strategic planning made sense prior to 1950, not only because management prior to this time was rather chaotic and nonsystematic, but also because the setting in which most organizations operated was relatively stable and because most organizations operated on a “bottom line” mentality, with finances and budgets being of highest priority.
Version Two: Decision making.
By the start of the 1960s, many successful leaders were thinking about the operations of their organization in a more systemic or comprehensive manner. They engaged in a systematic process of relating information regarding budgets, human resources, technology, sales and marketing, research and development, and new product development. This process usually required establishment of a Management Information System (MIS) in the organization. These MIS systems proved to be quite valuable to many late 20th Century organizations, and often provided leaders with data that clearly aided the strategic planning process. This version of strategic planning proved to be of value not only because it enabled leaders to form a more comprehensive plan (that was not just based in finances), but also because it encouraged conversation and planning across departments, thus breaking down some of the isolation (“silo” mentality) that was building up among increasingly specialized operational units in many organization.
Version Three: Futures thinking.
During the last two decades of the 20th Century, some organizational leaders began to recognize that the setting in which their organization operated was becoming increasingly complex, unpredictable and turbulent. They began to recognize the value of thinking about and perhaps even anticipating differing versions of the future with reference to their own organization’s strategic plans. They began to do contingency planning—fleshing out several different possible plans that would be responsive to several different changes in the setting of their organization. These leaders engaged in a systematic process of thinking about the future. They used accumulated and integrated management information (version two) when thinking about the future. These version three leaders kept asking “what if . . .” and “what are the chances that . . . “ They recognized that strategic planning concerns a future that will be even more complex, unpredictable and turbulent than current realities.
Version Four: Organization learning.
During the first decade of the 21st Century, increasing emphasis has been placed in many organizations on the processes of ongoing organizational learning. We must not only think about the future, we must also learn from the mistakes and (in an appreciative manner) the successes of our organization throughout its history. Leaders who are organizational learners engage in a formal, systematic process for the identification and use of management information. What they learn from this management information is made explicit, so that they might make a series of decisions that achieve explicit outcomes. This process incorporates all relevant domains of the organization and is responsive to future conditions that face the organization. While the world of the 21st Century is increasingly complex, unpredictable and turbulent, it also exhibits patterns that can be appreciated and used to leverage effective action. This fourth version requires that all three of the other versions are fully understood and incorporated in an integrative, learning-based model of strategic planning.
Planning for Planning
While there are several different ways in which strategic planning is defined and while (as I shall note in a later blog) there are at least five different approaches to strategic planning that an organizational leader might embrace, there are certain fundamental principles that underlie virtually any successful planning process that is engaged in a modern organization. I turn again to Henry Mintzberg and his analysis of successful and unsuccessful strategic planning projects in the identification of these keys.
Commitment at the top of the organization to strategic planning
This is what might be identified as the need for horizontal integration of various departmental perspectives. There should not be an isolated planning office or function. Effective Style Three leaders working in a modern organization will integrate various planning efforts into all aspects of the organization and focus on the coordination of all planning efforts in the organization.
Commitment at all levels of the organization to strategic planning.
This is the vertical integration of the strategic planning process. All stakeholders in the organization should be involved in strategic planning—not just those at the top. This means that there should be a “strategic” (long term) rather than just a “tactical” (short term) perspective throughout the organization regarding both problem-solving and planning. While those working “in the trenches” must be concerned about context-based tactical planning processes, they should also participate in the broader, longer-term strategic planning processes which will make tactical planning much easier or much more difficult if successful or unsuccessful.
Creation of a learning organization
This third principle concerns all members of the organization. They must be committed to learning from their own planning efforts and those undertaken in other units of the organization. The effective Style Three leader will exemplify this commitment to learning—especially if this leader conceives of her role as a catalyst for learning and as a co-creator of the learning process in her organization (I will have much more to say about this when addressing the challenges of postmodern leadership). Under these conditions, the effective modern leader can begin to consider non-repeated mistakes as opportunities for learning rather than as failures. It is only when the same mistake repeatedly occurs that an organization is failing.
Presence of decentralized problem-solving and decision-making at all level in the organization.
This fourth principle concerns problem-solving and decision-making. Both problem-solving and decision-making should occur at the point in the organization where there is a maximum amount of information that is directly relevant to the problem or decision. When this decentralization is present, the process of planning becomes an empowerment strategy throughout the organization—for people at all levels of the organization can make use of the strategic plan that is adopted in their own problem-solving and decision-making processes.
Need for collective action and responsibility.
The fifth strategic planning principle involves the culture of the organization. While an emphasis on individual initiatives and rights, is very important (and prominent in modern organizations), it must be integrated with an equally important emphasis on collective action and collective responsibility (which is much more commonly emphasizes in premodern organizations).
Style Three leaders in modern organizations must recognize that planning can reduce individual freedom and autonomy by requiring collaborative action and compromise. This means that strategic planning can dampen an entrepreneurial spirit in the organization; hence, planning must always be balanced off with openness to innovation, spontaneity and individual initiative. A Style Three leader must find this balance between the individual and collective.
As in the case of the challenges I have identified with regard to other premodern and modern styles of leadership, the fundamental challenge for Style Three Modern leaders involves a dilemma: one that is deeply embedded in the head and heart of the Style Three leader. This dilemma concerns commitment and calculation. Mintzberg suggests that a concern for commitment shows up in a strategic plan’s emphasis on quality, culture, values, vision—the so-called software of planning. This software is typically valued and assigned highest priority by the Style Three leader.The Style Three leader of a strategic planning process is likely to be primarily concerned about personal commitments to planning among employees throughout the organization, as well as being concerned about organizational culture and values, and the relationship between a specific project and the organization’s vision.
At the same time, according to Mintzberg, there must be a concern for calculation, which shows up in a strategic plan’s focus on quantity, structure, policies, and goals—the so-called hardware of planning. This is a particularly important challenge for the Style Three leader, who is inclined to focus on commitment rather than calculation. The leader of a strategic planning initiative in a modern organization should be concerned about numbers and statistics, organizational structures and policies. She must also be concerned with the relationship that exists (or should exist) between a specific project and the organization’s overall operational goals and measurable objectives. While some Style Three leaders tend to shy away from this dimension of strategic planning, it is critical that they do the calculations while also building commitment. This is a fundamental challenge operating in any modern organization: how does one lead in a way that encourages commitment and an entrepreneurial spirit (including an honoring of risk), while also requiring accountability and the successful achievement of measurable outcomes (including a realistic assessment of costs associated with failure)?