A high school student's view on Traditional Strategic Planning

Background:

My interest towards this strategic planning stemmed from our current unconventional business environment. It's interesting how different firms strategically adapt towards this dynamic environment driven by uncertainty and unpredictability and in this blog, I will be delivering my opinion on traditional strategic planning, which has not been particularly favoured by certain strategists.

Introduction to Traditional Strategic planning:

Traditional strategic planning was developed somewhere around the 20th Century (There isn't really a specific date) during the early stages of business development where globalisation hasn't fully matured. It generally follows the steps shown below:

1. Vision

2. Mission

3. Internal (Stength + Weaknesses) and External (Opportunity and threats) Analysis

4. Evaluation and Choice (Is the business capable of carrying out the strategy? Does it target the proposed vision and mission?)

5. Implementation

This is what guided most firms up until today to strive in the perpetuating change in our business environment. Yet, as I did more research on the nature of this traditional analytical framework, from the underlying assumptions to the model itself, there are many things that I find limiting about it.

Limitations of traditional strategic planning

1. The assumption that everything is predictable

From looking at the step-by-step approach used in traditional strategic models, I personally believe that traditional strategic models belittle change in our business environment which can detrimentally affect different sectors. An article I looked up titled "Strategy Under Uncertainty" from the Harvard Business review views Traditional strategic planning assumptions as having a "binary view of the world", categorizing business environments using two extremes: fully predictable or fully unpredictable, which pretty much disregards uncertainty within the spectrum. This not only make it less adaptable to our current plight of COVID-19, but creates another issue.

Relying on intuition (gut instinct). Literally, intuition. The fact that the traditional approach generalizes all uncertainty as "fully unpredictable", it encourages approaching markets with an "illogical rationale", essentially chucking logical thinking into the bin. This leads to a waste of opportunities or revenue maximizing chances that could've been achieved in the uncertain environment, and could severely damage the business itself from poor decisions.

2. The inflexibility of the linear model used

Although the 5 step plan in traditional strategic planning might seem easy to comprehend, each step requires a solid investment of time. (E.g. The weighing of strengthes and weaknesses may take into consideration of different factors such as consumer tastes and preferences and human resource management.)

You might be wondering how this relates to inflexibility. The fact that firms draft paperwork containing dense analysis and spend heaps of time discussing and planning for each particular step gives little incentive to change their strategic approach to adapt to the business environment.

Therefore, this may most likely fail when first implemented and if businesses are adamant to change their approach, then it could be deemed unsustainable in the long run. Worse, this ineffective allocation of time could have been spent on devising new strategies for adapting to the perpetuating change in business environments instead of sticking with the same approach.

3. Demotivation of labour force

The fact that each step in the traditional strategic plan involves depth analysis just reflects the complexity of each plan following the traditional analytical framework when implemented. Yet, this also raises concern for the motivation of the workforce.

The constant drafting of strategic plans using the traditional strategic framework may stimulate struggle and stress for the workforce in completing each particular plan. Worse of all, some workers may not be able to cope with such pressure which may result in a demotivated workforce, lowering productivity.

What I like about traditional strategic planning

1. It is very easy to follow

Amazon Flywheel Strategy (Contemporary Strategic plan)

Traditional Strategic Plan

If you compare traditional strategic planning to a contemporary approach called the "Flywheel strategy" utilized by Amazon, it is apparent that the traditional strategic plan, although not as flexible or direct, can be comprehended easily and does not take a long time to understand. (I must say the flywheel strategy took me around 10-20 minutes to somewhat understand it).

This might not be a significant advantage, but the basic structure of it allows workers to quickly develop a root understanding of the strategic plan itself, thus implementing it after a brief introduction, in contrast to contemporary frameworks that may initially seem confusing for some.

2. Linear and relevant to the goal.

This again isn't a major advantage but it's something that is worthwhile talking about. The linear approach used in the traditional strategic plan can almost guarentee the development of a strategy that is linked to the company's aims, regardless of it's success in competing with other firms, which targets the goal of the company.

Conclusion:

These are my opinions on traditional strategic planning in a nutshell:

What I find limiting about traditional strategic planning:

1. The assumption that everything is predictable

2. The inflexibility of the linear model used

3. Demotivation of labour force

What I like about traditional strategic planning:

1. It is very easy to follow

2. Linear and relevant to the goal.

From my own research and opinions on traditional strategic planning, I personally believe that traditional strategic plans aren't necessarily adaptable to our dynamic business environment due to it's linear approach and inflexibility which may not be useful in times of uncertainty. Although, we cannot ignore the ease of following the plan and it's almost guarenteed development of strategies that are relevant to the company's goal.

Instead of using such time consuming and assumptive traditional framework, I believe that our society needs strategic plans that have strong agility and adaptability to gain competitive advantage in our unconventional and perpetuating change in our business environment.

Inquiries

If you have any inquiries and suggestions for this particular topic, feel free to send me an email which is attached in the contact page. If you are interested about other aspects of business or economics, feel free to check out my other posts!