The Rise and Fall of Strategic Planning (Mintzberg, 1994, 2000)

"My favourite management book of the last 25 years? No contest. The Rise & Fall of Strategic Planning by Henry Mintzberg." Tom Peters

In this definitive and revealing history, Henry Mintzberg unmasks the process that has mesmerized so many organisations since 1965: strategic planning. One of the original management thinkers, Mintzberg concludes that strategy cannot be planned because planning is about analysis and strategy is about synthesis. That is why, he asserts, the process has failed so often and dramatically. Mintzberg traces the origin and history of strategic planning through its prominence and subsequent fall. He argues that we must reconceive the process by which strategies are created by emphasizing informal learning and personal vision. Mintzberg proposes new definitions of planning and strategy, and examines in unusual ways the various models of strategic planning and the evidence of why they failed. Reviewing the so-called 'pitfalls' of planning, he shows how the process itself can destroy commitment, narrow a company's vision, discourage change and breed an atmosphere of politics. In a harsh critique of many sacred cows, he describes three basic fallacies of the process - in that discontinuities can be predicted, that strategists can be detached from the operations of the organisation, and that the process of strategy-making itself can be formalized. Mintzberg devotes a substantial section to the new role of planning, plans and planners, not inside the strategy-making process, but around it, in support of it, providing some of its inputs and sometimes programming its outputs, as well as encouraging strategic thinking in general. This book is essential reading for anyone in an organization who is influenced by the planning or strategy-making process. It is also suitable for undergraduate and postgraduate students undertaking corporate strategy, strategic management and business policy courses.

Henry Mintzberg is Professor of Strategy and Organization and the John Cleghorn Professor of Management Studies at McGill University, Canada, and visiting Professor at INSEAD, France. He is a two time winner of the prestigious McKinsey Award for best Harvard Business Review articles; a fellow of the Royal Society of Canada - the first elected from a management faculty - and past president of the Strategic Management Society, the worldwide association of practitioners and scholars in the field. He is the author of several seminal books including The Strategy Process, Structure in Fives and The Structuring of Organisations.

[JLJ - Ok, so if you are against strategic planning, what are you going to replace it with? How about effective strategic planning?

It seems to me that strategic thinking is required in any pursuit, and the notes or records of that thinking form the basis of the strategic plan, as it evolves and is shaped by the structures that are in place or predicted to be in place. Forming a strategic plan does not exempt you from having an effective strategy, or modifying those plans once new information becomes available, or if changes happen in the marketplace, or if learning is required in any way to validate portions of the plans. If the strategic plan is not effective, one cannot blame the act of planning, but rather the whole strategic effort to maneuver to an advantage. ]

p.4 the reader... has to see only this final result of my work. I, in turn, had to read huge quantities of some awfully banal literature. In the midst of doing that, I heard an item on Canadian radio news about the opening of a new mine from which the owners expected to extract about three-quarters of an ounce of gold for every ton of ore. My immediate reaction was - if only I had been able to do as well with this literature! [JLJ - whine, whine. I read your finished work and had the same identical thought. What follows is the three-quarters of an ounce of gold.]

p.13 Above all, planning is characterized by the decompositional nature of analysis - reducing states and processes to their component parts. Thus the process is formally reductionist in nature. This may seem curious, given that the intention of planning is to integrate decisions... In fact, the key, if implicit, assumption underlying strategic planning is that analysis will produce synthesis: decomposition of the process of strategy making into a series of articulated steps, each to be carried out as specified in sequence, will produce integrated strategies... Organizational strategies cannot be created by the logic used to assemble automobiles.

p.109-110 In general, we found strategy making to be a complex, interactive, and evolutionary process, best described as one of adaptive learning.

p.180 Another problem with planning, therefore, is precisely this: it can look into the future only in the same way headlights look down a road. That is, to say... planning relies on formal techniques of forecasting to look into the future, and the evidence is that none of these can predict discontinuous changes in the environment. So planning, again always in the formal sense, cannot do much more than extrapolate the known trends of the present.

p.221 An expert has been defined as someone who knows enough about a subject to avoid all the pitfalls on his or her way to the grand fallacy (Edelman, 1972:14).

p.222 In the words of George Steiner, "In a fundamental sense, formal strategic planning is an effort to duplicate what goes on in the mind of a brilliant intuitive [manager]."

p.228 As Allaire and Firsirotu noted, "Uncertainty is the Achilles' heel of strategic planning..."

p.228 William Dimma, CEO of a major Canadian financial institution, stated simply: "there are only four ways I know of to deal with the future. 1. You can ignore it. 2. You can predict it. 3. You can control it. 4. You can respond to it" (1985:22).

p.228 Almost everything written about planning stresses the importance of accurate forecasting. Short of being able to control the environment, planning depends on an ability to predict where that environment will be during the execution of the plans... If... the environment does change, then those changes must be predicted.

p.228 "A strategy is a road map to the goals; that is, an assembly of the elements which, when linked together effectively, permit a plan which moves the business towards the specific accomplishments it has chosen to attempt" (Sawyer, 1983:37).

p.229 In his 1990 book, Makridakis commented: The ability to forecast accurately is central to effective planning strategies. If the forecasts turn out to be wrong, the real costs and opportunity costs... can be considerable. On the other hand, if they are correct they can provide a great deal of benefit - if the competitors have not followed similar planning strategies. (170)

p.231 As discussed earlier, Ansoff devoted a good deal of his 1984 book to the premise that systems can be devised to detect strategic surprises through weak signals.

p.234 As Makridakis summarized... Although forecasts can and will be inaccurate... and the future will always be uncertain, no planning... is possible without forecasting and without estimating uncertainty. (1990:66)

p.235 Gimpl and Dakin noted the "fundamental paradox in human behavior - the more unpredictable the world becomes, the more we seek out and rely upon forecasts and predictions to determine what we should do" (125).

p.256-257 Effective strategists are not people who abstract themselves from the daily detail but quite the opposite: they are the ones who immerse themselves in it, while being able to abstract the strategic messages from it. Perceiving the forest from the trees is not the right metaphor at all, therefore, because opportunities tend to be hidden under the leaves. A better one may be to detect a diamond in the rough in a seam of ore.

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