Proposal for the colloquium on

The Crafts of Strategy: Strategic Planning in Different Contexts, Toulouse, May 2006

Title: Strategic Planning serves different purposes as it grows

Authors: Joaquim Vilà, Associate Professor

IESE Business School
Avda. Pearson, 21
08034 Barcelona
Tel. 34-3-253 42 00
Fax 34-3-253 43 43
jvila@iese.edu

Juan Ignacio Canales

Lecturer in Management
University of St. Andrews
School of Management
Gateway Building, North Haugh
Fife KY16 9SS
Scotland, U.K.
Tel. 44-1334 46 2807
jic1@st-andrews.ac.uk

Abstract:

This paper builds on a detailed case study of how strategic planning in a middle-sized
company has changed to pursue different purposes over time. The evolution from a
mechanistic approach (back to 1997) to a singular approach, balancing aspects of the
planned and emerging approaches to strategizing (in the 2003-05 period), sheds light on
the interdependences of components of a planning system. Over time, the company has
changed the nature of top management intervention and placed an increasing emphasis
on the role of middle managers. More importantly, changes seem to be driven by more
elaborated responses to the central issue of ‘why do we want a strategy in the first
place?’ Finally, strategy, conceived as a shared framework in the mind of strategists, is
subsequently linked with policies for daily action at lower levels, in a way which builds
on the adaptive school and the interpretative notions of strategy.

The deployment of different approaches to strategic planning takes place in a way that
responds to CEO concerns (f.e. about translating strategy to daily execution, not just for a
future oriented task). The framework outlined helped top management efforts in building a
shared understanding of strategic issues and encouraging actions at the front-line which are
consistent with the strategy pursued by the firm.
Title: Strategic Planning serves different purposes as it grows

Discussion:
Since early 80s a growing number of companies strategic planning has received high
criticisms because it hardly served the purposes it had in its inception. The demands of
today's competitive environment are at odds with the way formal strategic planning was
designed and the culture it induced: the process inculcated a preoccupation with precision and
predictability, sudden external change was viewed as a threat, the need of mid-course
corrections was viewed as evidence of poor initial planning, etc.

Critics of formal strategic planning have explored alternative approaches to overcome its
limitations and to address CEO's concerns in turning strategic vision into operational reality.
Is it feasible to have well defined strategies and be quick in taking advantage of
opportunities? What attributes do adaptable strategy processes have? How does a top
management team effectively shape the process to get managers to act coordinately and with
integrated efforts?

There is an open debate in the strategy-making field between the contributions of a synoptic
deliberate view of the strategic process (Ansoff, 1991) and of an incremental emergent view
of it (Mintzberg, 1990). Moreover, the bitterness of the controversy and the extreme view of
their assumptions suggest that there is no single common ground. A number of recent
contributions suggest that the strategy making process is neither completely deliberate nor
completely emergent, for example (Lovas and Ghoshal, 2000). There is general agreement on
that the purpose of strategic planning can no longer be to generate plans; some authors
advocate that its goal should be to build strategic thinking. Recent notions of strategic
thinking and strategy have not been adequately defined and operationalized to make the
useful for managers.

This paper tries to go in depth into some core themes of strategy-making. From the field of
strategy practice some key ingredients are chosen. These ingredients are assembled into
different arrangements in order to set the main themes that may constitute the conceptual
anchor of the paper. The theoretical backbone used is the ‘strategy as guided evolution’
(Burgelman, 1996; Child, 1997; Lovas and Ghoshal, 2000). Along with this foundation, we
study the evolution of how the process is set and which outcomes are expected from it. Other
themes of interest we build on are, under what conditions does strategy comes out closer to
be emergent or deliberate; how does it relate to the subsequent use of strategy, once it has
being ‘conceived’. The last theme, on the role of middle managers (Uyterhoven, 1991;
Woolridge and Floyd, 1990). The creation of meaning to managers touches on a topic with
growing attention within the field (Fabian and ogilvie, 2005).

Our approach takes into account popular approaches and notions widely mentioned in the
field (strategic intent, logical incrementalism, ideal position, strategic flexibility, dominant
logic, adaptability, etc.). We try to study how these are integrated within the strategy making
process. Among others, some aspect draw on adaptation and evolution (Burgelman, 1991),
self-renewal (Barr et al., 1992), and Quinn’s logical incrementalism (1978). A contribution of
this paper is to integrate some of different aspects of the strategy.

The core of the paper is an attempt to suggest how changes in the main strategic planning
approach respond to the basic concerns of the top management team. Conceptual
developments contained here are illustrated by the insights drawn from a case study based on
Real Automobile Club of Catalonia (RACC), a fast growing and leading player in the
automobile-related services industry in Spain (an innovative company which diversified from
its original on-the-route assistance services to be present in several business units).

Data were collected both from primary and secondary sources. The primary sources include
twelve individual interviews with eight different managers (the general manager, the head of
corporate development and new projects, the manager of a core business area, the head of
human resources, and the head of management control and auditing unit). First round
interviews started in January of 2001. Subsequent interviews took place between May 2002
and October 2005.

The research suggests a numbers of aspects which deviate from the more traditional approach
to planning (for example, a deviation from the SWOT analysis to overcome some of the
limitations of formal planning). The end logic of purpose and change in the planning
approach is sustained by contrasting our basic propositions with the views of RACC
responsible managers on the strategy planning process. The findings can be synthesized in the
framework, briefly referred as a shared understanding among middle managers about
strategic issues, which may contribute to the debate on a number of issues:

How the split between Strategic Intent/Ideal Strategy and Possible Strategy sheds new
light on the tension between what a company would like to do and what it can do, along
the lines of the future driven strategy (Krinsky and Jenkins, 1997).
How decisions from different departments are better coordinated (given that managers
have a better understanding of the common purposes.
Consensus/agreement on objectives (not plans) engenders speed, since it facilitates
decision making.
It may provide a common language that invites employees at all levels into strategic
conversations and engages them as a result.
Consistency between managers thinking and action can be enhanced.

References

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Management Journal, 12:449-461

Barr. P.S., J.L. Stimpert, A.S. Huff (1992) Cognitve change, strategic action, and
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