Rain Dance Planning Or Real Strategy?

“How do I work. I grope” said Albert Einstein.? Interestingly, he does not praise the virtues of inductive and deductive thinking, or the joys of the scientific method.? Simply gradually groping to find answers, asking the right questions.? Coming up with a distinctive approach, a strategy.

But how do companies find answers to their route to success? How does “rain dance” planning in organisations really work??? And, what does this word strategy really mean?

How Planning Fails

Every so often companies and NGOs in Kenya go off on a retreat to plan for a hopefully better future with the word “strategic” thrown in, to add a wishful dose of intelligence to the proceedings.? Yet what happens?? Papering the walls is the proverbial SWOT analysis,??? probably the only approach out of hundreds that is mistakenly used, with all managers coming away still intoxicated, half believing that this time the firm will apply it’s strengths to take advantage of the opportunities at hand.?? Six months later it is not uncommon to find that the organisation faces a crisis that threatens its very core premises.? “Ah, but this was not in the plan” says the MD.

Some how organisations have an addiction to planning where in practice its unclear the contribution planning makes to business success.? Firms like Lonrho EA and Unga Group are now mere shadows of their former selves. (Thanks to insightful management, Unga has bounced back to profitability in the first 6 months of this year after an 8 year financial drought.)? As Mao said “she who plans, must plan often.”? Business planners will argue that what is important is the process of planning, forcing managers to engage their intellect, to think through issues rather than focusing solely in on product in the form of a report that invariably is tossed aside, only to gather dust.

It’s not that planning is bad, but in looking out of the shadows of Plato’s cave into the harsh light of day business world in East Africa, one knows that formal planning can have a limited contribution to how decisions are made in practice.? Forget the theory, senior managers often make their decisions as much on random events, gossip in the hallway and just plain subjective impressions, with some wild intuitive guesses thrown into the mix.?? This is not wrong, no, it’s groping – it just happens to be how things work.? Richard Neustadt, the Harvard University scholar who served as advisor to several US presidents comes to a similar conclusion: “It is not information of a general sort that helps a president, not surveys, not bland amalgams.? Rather it is the odds and ends of tangible detail that pieced together illuminate the underside of issues”.

So before you shoot off on the next planning retreat consider the thoughts of the Dartmouth professor, Brian Quinn who notes: “A good deal of the corporate planning I have observed is like a ritual rain dance; it has no effect on the weather that follows, but those that engage in it think it does.? Moreover, it seems to me that much of the advice and instruction related to corporate planning is directed at improving the dancing not the weather.”

Is planning wrong? No, it’s just typically poorly done, reflecting a na?ve belief in simplistic views and approaches, that don’t take into account the limits of rationality.? Insightful strategic planning combines hard analysis with creativity, taking into account the turbulent Kenyan business environment. Easier said than done. Just look at the business press that is littered with the names of firms that went belly up despite being addicted to annual planning retreats.?? So beware of rain dance planning and be strategic. Easier said than done.

So What Is Strategy?

What is it that 90 percent of Kenyan companies talk about but don’t have?? Answer: a business strategy.? Having a clear “spreading the bets” strategy is one of the elements that drove Microsoft to its market dominance. In 1988 Microsoft’s share price was 66 cents, at certain points in time it has reached $ 120 plus range.? In contrast, the absence of a clear strategy has been the downfall of many East African organisations and for the survivors, languishing share prices.?? What most companies have is glorified dull witted “to do list” that gathers dust.? Having an operational plan with the naive intention to do better than the competition is not strategic, as the competition will soon catch up.? Soon the organisation will have to run pretty fast just to stay where it is.

David is a director aCatalyst Consulting - [email protected]