A recent article in the Wall Street Journal described how many CEOs had strategic epiphanies during the Great Recession: strategic plans don’t do diddly for companies during economic downturns.
During the recession, as business forecasts based on seemingly plausible swings in sales smacked up against reality, executives discovered that strategic planning doesn't always work.
Some business leaders came away convinced that the new priority was to be able to shift course on the fly… started to factor more extreme scenarios into their thinking... A few even set up "situation rooms,'' where staffers glued to computer screens monitored developments affecting sales and finances.
Walt Shill, head of the North American management consulting practice for Accenture Ltd., is even more blunt: "Strategy, as we knew it, is dead,'' he contends. "Corporate clients decided that increased flexibility and accelerated decision making are much more important than simply predicting the future."
What's new—and a switch from the distant calendars and rigid forecasts of the past—is the heavy dose of opportunism. Office Depot stuck with its three-year planning process after the recession hit, largely to make sure employees had a common plan to rally around, Mr. Odland says. But the CEO decided to review the budget every month rather than quarterly so the office-supply chain could react faster to changes in customers' needs...
Tying decision making closely to evolving facts helped a major U.S. producer of industrial goods avoid switching gears too soon. Battered by the downturn last spring, the McKinsey client (which Mr. Bryan wouldn't name) considered closing a large plant. Officials carefully assessed the pluses and minuses of shutting it sooner rather than later, Mr. Bryan recalls.
They agreed instead to keep the plant open unless orders fell to a predetermined "trigger point," he says. The trigger was never tripped, so the plant stayed open, and the company was ready when orders recovered rapidly last fall.
Aren’t these exact scenarios the reasons we hear business leaders give for needing more just-in-time information about their human capital? To enable increased flexibility and decision-making for situations like needing to close a plant in one location and effectively redeploy people elsewhere? To know what KSAs and experiences will be needed to ensure the organization exits the economic downturn well-positioned to accelerate growth by meeting customer’s needs?
Maybe the new strategic planning isn’t about how a company is going to grow, achieve greater market share, innovate new products & services, etc. Maybe, just maybe, new strategic planning is going to be about how companies increase their capabilities to be more flexible, more nimble, more opportunistic. The implications for talent management are pretty fantastic to think about, huh? Not to mention, pretty darn exciting.
