A Lesson in the History of Strategic Planning

Posted by on July 22, 2010

When today’s business leaders think of strategic planning they are likely think of the planned strategic and organizational actions and innovations that will be used to maintain and build competitive advantage. In fact, an entire industry is built around strategic planning services and consulting to support these efforts to build advantage over one's business competitors. But strategic planning wasn’t always thought of this way. So how much do you know about the history of strategic planning? Would it help you to understand it better? We think so.

We believe that by understanding the origins and transformations of strategic planning as a discipline, you can gain valuable perspective and insight to improve the outcomes of your own approach.

Evolution of Strategic Planning:

The origins of strategic planning come from the military dating as far back as the 6th Century BC. Even Webster’s New World Dictionary defines strategy as, “the science of planning and directing large-scale military operations of maneuvering forces into the most advantageous position prior to actual engagement with the enemy.”
Certainly we can see how the term strategy translates so well into the business world where we are maneuvering our companies to compete in the marketplace.

Beyond the military, the timeline above shows the evolution of strategic planning from the 1900s to the 2000s. Here are some highlights:

In the 1950s strategic planning, then called strategic management, was rooted in budget planning and financial control.
In the 1960s, strategic positioning was the dominant theory as Harvard Business School promoted the role of strategic positioning in assessing how the strengths and weaknesses of key business functions relate to competitors’. Tools in this era focused on productivity and profits.
The 1970s very much followed the trends set in the 1960s.
In 1980 Michael Porter came on the scene. This popular Harvard professor and strategic planning expert came along at the peak of corporate America’s interest and confidence in strategic planning.
During the rest of the 1980s America saw a decline in the popularity of strategic planning as organizations began to question the ROI of their efforts. Despite this, military strategy books such as “The Art of War” by Sun Tzu, “On War” by von Clausewitz, and “The Red Book” by Mao Zedong became popular reading in business circles.
Also during the 1980s General Electric’s Chairman, Jack Welch, became highly influential and equally controversial in the world of strategic management as he focused on building competitive advantage for his organization.
The 1990s brought about a renewed interest and passion for strategic planning, as mergers and acquisitions and complex joint ventures arose in great numbers. Such trends forced strategic planners to focus on innovation through decentralized models, leveraging core competencies, and embracing emergent strategy.
So far, the 21st Century has continued its orientation towards building competitive advantage. At the same time we find added pressure to develop and nurture organizational innovation. Planning has definitely become more complex as strategies are being called upon to address multifaceted layers of global, economic, and competitive issues.

In the end, the road of strategic planning has led to the realization that corporate strategy and operational strategies should be inextricably linked. Along with this is the conclusion that it’s smarter to look back at what we know rather than trying to predict what may happen in the future. Doing this we can examine our current reality to build transformational strategies that leverage lessons learned from the past.

How will you leverage what we know about the history of strategic planning to benefit your organization? Clearly, this is just an overview of what the history has held. Take the time to learn what you can about strategic planning and find out the approach that will work for your organization.

While you’re at it, read "The Definition of Strategic Planning: A White Paper".

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You can contact Method Frameworks at 877-317-5264 (877-31PLAN4) or follow this link to request a meeting with a planning consultant. Check our articles and blog often at www.methodframeworks.com to get many more planning tips and information about our Plan4 process.

Strategic planning

Submitted by Anonymous on Mon, 08/16/2010 - 13:15.

In emmerging economies lets say in Africa,how can they use strategic planing to help build their busineses from small scale to large scale competitors on the international market?