The Fall and Rise of Strategic Planning by Henry Mintzberg Harvard Business Review Reprint 94107 Harvard Business Review JANUARY-FEBRUARY 1994 Reprint Number ROBERT H. HAYES BEYOND WORLD CLASS: 94104 AND GARY P. PISANO THE NEW MANUFACTURING STRATEGY NANCY A. NICHOLS SCIENTIFIC MANAGEMENT AT MERCK: 94106 AN INTERVIEW WITH CFO JUDY LEWENT REBECCA HENDERSON MANAGING INNOVATION IN THE INFORMATION AGE 94105 HENRY MINTZBERG THE FALL AND RISE OF STRATEGIC PLANNING 94107 F. GOUILLART AND F. STURDIVANT SPEND A DAY IN THE LIFE OF YOUR CUSTOMERS 94103 N. NOHRIA AND J.D. BERKLEY WHATEVER HAPPENED TO THE TAKE-CHARGE MANAGER? 94109 ROBERT C. POZEN INSTITUTIONAL INVESTORS: THE RELUCTANT ACTIVISTS 94111 HBR CASE STUDY CINDEE MOCK THE EXPECTANT EXECUTIVE AND THE 94108 AND ANDREA BRUNO ENDANGERD PROMOTION PERSPECTIVES TAKING ACCOUNT OF STOCK OPTIONS 94110 IN QUESTION BERNARD AVISHAI WHAT IS BUSINESS’S SOCIAL COMPACT? 94102 WORLD VIEW HOSSEIN ASKARI IT’S TIME TO MAKE PEACE WITH IRAN 94101 FIRST PERSON RICARDO SEMLER WHY MY FORMER EMPLOYEES STILL WORK FOR ME 94112 Planners shouldn’t create strategies, but they can supply data, help managers think strategically, and program the vision. by Henry Mintzberg When strategic planning arrived on the scene in planning often spoils strategic thinking, causing the mid-1960s, corporate leaders embraced it as managers to confuse real vision with the manipula- “the one best way” to devise and implement strate- tion of numbers. And this confusion lies at the gies that would enhance the competitiveness of heart of the issue: the most successful strategies are each business unit. True to the scientific manage- visions, not plans. ment pioneered by Frederick Taylor, this one best Strategic planning, as it has been practiced, has way involved separating thinking from doing and really been strategic programming, the articulation creating a new function staffed by specialists: stra- and elaboration of strategies, or visions, that al- tegic planners. Planning systems were expected to ready exist. When companies understand the differ- ence between planning and strategic thinking, they can get back to what Strategic planning isn’t strategic the strategy-making process should be: capturing what the manager thinking. One is analysis, learns from all sources (both the soft insights from his or her personal ex- and the other is synthesis. periences and the experiences of others throughout the organization and the hard data from market re- produce the best strategies as well as step-by-step search and the like) and then synthesizing that instructions for carrying out those strategies so that learning into a vision of the direction that the busi- the doers, the managers of businesses, could not get ness should pursue. them wrong. As we now know, planning has not ex- Henry Mintzberg is professor of management at McGill actly worked out that way. University in Montreal, Quebec, and visiting professor While certainly not dead, strategic planning has at INSEAD in Fontainebleau, France. This article, his long since fallen from its pedestal. But even now, fifth contribution to HBR, is adapted from his latest few people fully understand the reason: strategic book, The Rise and Fall of Strategic Planning (Free Press planning is not strategic thinking. Indeed, strategic and Prentice Hall International, 1994). HARVARD BUSINESS REVIEW January-February 1994 Copyright Q 1993 by the President and Fellows of Harvard College. All rights reserved. STRATEGIC PLANNING Organizations disenchanted with strategic plan- and articulating the anticipated consequences or re- ning should not get rid of their planners or conclude sults of each step. “I favour a set of analytical tech- that there is no need for programming. Rather, orga- niques for developing strategy,” Michael Porter, nizations should transform the conventional plan- probably the most widely read writer on strategy, wrote in the Economist.1 The label “strategic planning” has Planners should make their been applied to all kinds of activities, such as going off to an informal re- greatest contribution around the treat in the mountains to talk about strategy. But call that activity “plan- strategy-making process rather ning,” let conventional planners or- ganize it, and watch how quickly than inside it. the event becomes formalized (mis- sion statements in the morning, as- sessment of corporate strengths and ning job. Planners should make their contribution weaknesses in the afternoon, strategies carefully around the strategy-making process rather than in- articulated by 5 P.M.). side it. They should supply the formal analyses or Strategic thinking, in contrast, is about synthesis. hard data that strategic thinking requires, as long as It involves intuition and creativity. The outcome they do it to broaden the consideration of issues of strategic thinking is an integrated perspective rather than to discover the one right answer. They of the enterprise, a not-too-precisely articulated should act as catalysts who support strategy mak- vision of direction, such as the vision of Jim Clark, ing by aiding and encouraging managers to think the founder of Silicon Graphics, that three-dimen- strategically. And, finally, they can be programmers sional visual computing is the way to make com- of a strategy, helping to specify the series of con- puters easier to use. crete steps needed to carry out the vision. Such strategies often cannot be developed on By redefining the planner’s job, companies will schedule and immaculately conceived. They must acknowledge the difference between planning and be free to appear at any time and at any place in the strategic thinking. Planning has always been about organization, typically through messy processes of analysis – about breaking down a goal or set of in- informal learning that must necessarily be carried tentions into steps, formalizing those steps so that out by people at various levels who are deeply in- they can be implemented almost automatically, volved with the specific issues at hand. Call an informal retreat “planning,” let conventional planners organize it, and watch how quickly the event becomes formalized. 108 DRAWINGS BY GARISON WEILAND Formal planning, by its very analytical nature, Planners would have people believe that planning has been and always will be dependent on the fails when it does not receive the support it de- preservation and rearrangement of established cate- serves from top management or when it encounters gories – the existing levels of strategy (corporate, resistance to change in the organization. But surely business, functional), the established types of prod- no technique ever received more top management ucts (defined as “strategic business units”), overlaid support than strategic planning did in its heyday. on the current units of structure (divisions, depart- Strategic planning itself has discouraged the com- ments, etc.). But real strategic change requires not mitment of top managers and has tended to create merely rearranging the established categories, but the very climates its proponents have found so un- inventing new ones. congenial to its practice. Search all those strategic planning diagrams, all The problem is that planning represents a calcu- those interconnected boxes that supposedly give lating style of management, not a committing style. Managers with a committing style engage people in a journey. Real strategic change requires They lead in such a way that every- one on the journey helps shape its inventing new categories, not course. As a result, enthusiasm in- evitably builds along the way. Those rearranging old ones. with a calculating style fix on a desti- nation and calculate what the group must do to get there, with no con- you strategies, and nowhere will you find a single cern for the members’ preferences. But calculated one that explains the creative act of synthesizing strategies have no value in and of themselves; to experiences into a novel strategy. Take the example paraphrase the words of sociologist Philip Selznick, of the Polaroid camera. One day in 1943, Edwin strategies take on value only as committed people Land’s three-year-old daughter asked why she could infuse them with energy.2 not immediately see the picture he had just taken No matter how much lip service has been paid to of her. Within an hour, this scientist conceived the the contrary, the very purpose of those who pro- camera that would transform his company. In other mote conventional strategic planning is to reduce words, Land’s vision was the synthesis of the in- the power of management over strategy making. sight evoked by his daughter’s question and his vast George Steiner declared, “If an organization is man- technical knowledge. aged by intuitive geniuses there is no need for for- Strategy making needs to function beyond the mal strategic planning. But how many organiza- boxes, to encourage the informal learning that produces new perspec- tives and new combinations. As the The goal of those who promote saying goes, life is larger than our categories. Planning’s failure to tran- planning is to reduce managers’ scend the categories explains why it has discouraged serious organiza- power over strategy making. tional change. This failure is why formal planning has promoted strate- gies that are extrapolated from the past or copied tions are so blessed? And, if they are, how many from others. Strategic planning has not only never times are intuitives correct in their judgments?”3 amounted to strategic thinking but has,