Saturday, September 02, 2006

Strategic Planning: Sophisticated or Simple?

I've done so many strategic plans for different companies that I've lost count over the years. One of the questions that comes up sometimes in strategic planning is: should our strategic planning be more "sophisticated"? Usually, the person asking this question refers to some tool set which looks quite elegant at first, but ultimately takes a lot of time (and usually money for consultants).

Strategic Planning invites this kind of activity because it requires a lot of assumptions - educated guesses, really - in order to be done well. Spending time and money on those guesses may improve their quality a little bit, but in the vast majority of companies I've worked with, the resulting improvement in assumption quality is NOT worth the extra effort and delay. I have seen companies delay their entire planning process for two years waiting for data like this, and frankly, most companies would make the same improvement in their assumptions just by going through a year of well-structured planning and then paying attention to the accuracy of the previous year's assumptions.

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