Wednesday, July 15, 2009

Professional Vs. Passin' Through

Some companies like their strategic planning areas to be full of strategic planning professionals, who see this discipline as a long-term career choice. Other companies like to fill their strategic planning areas with young, fast-track, up-and-coming operators who are being groomed for bigger things and are only in planning on a temporary basis. Which is better?

In my opinion, either extreme can cause problems. I prefer a balanced mix of both professionals and those who are passing through.

The benefit of filling your strategic planning department with professional planners is that they have the proper long-term strategic mindset. They know all the proper tools to use. They are trained to think strategically. And since their professional focus is on long-range planning, they are less likely to become distracted by the day to day fires that need to be put out, and therefore can stay on the long-term task better.

Unfortunately, if all you have are strategic planning professionals, there is a risk that they can become too theoretical/academic and lose site of the realities of the business. This can lower their stature in the organization and make it harder to get the respect of the people who have to implement it. Second, good strategies exploit the nuances of the business, and people who have not spent some time in operations may not fully understand or appreciate those nuances.

The benefit of using key operating executives on a temporary basis is that they tend to have a more intimate understanding of how the business works. They also tend to be better connected to the people who have to put the strategy into action, which can give them an edge in strategic implementation.

However, if the entire planning function is put into the hands of people who are “passing through” there are negative consequences. First, if you know the assignment is short-term, there is not much incentive to focus on long-term results (which won’t have an impact until after you have passed through). Instead of comprehensive, integrated long-range plans, you are more likely to get a series of short-term “special projects.”

Second, even if intentions are good, if you are not trained in strategy, how good can you ultimately be at it? Without some professionals around, there is nobody to train these operators in strategic skills. The qualifications to be a good operations manager are often quite different than what makes for a good strategist. It doesn’t always work to switch roles—it may be a poor fit and not come naturally.

Therefore, in my opinion, there should be a blend of both professional planners and temporary operations people within a company’s strategic planning area. The benefits:

1) The operators help to keep the professionals grounded in reality.
They can let the group know when they are getting too academic or if the ideas are too impractical or too unrealistic to put into practice in the “real world.”

2) The professionals help to teach the operators about strategic thinking. This could be one of the greatest advantages of the blend. As operators flow through the department, you get each of them to think and act more strategically. They will take this knowledge with them when they go back into operations. As you do this over time, you will create a company where strategic thinking has been spread throughout the organization, like a good virus.

3) Implementation improves via better trust and better networking. People in the field will trust the professionals more (and view them less as out-of-touch academics) if they know that some of their own were involved in the process. This greater acceptance will help when handing off the strategy to the implementers. Even more importantly, by having some of the operators pass through, the professionals get exposed to more people. This improves their network, making it easier for the professionals to reach out to the field when they need to.

I think the blend works best if there are more professionals than those who are passing through. This reduces the amount of time lost in getting people acclimated to their new temporary role as a strategic planner. There is better continuity and a stronger learning curve if there are more professionals around to do the work on a long-term basis. Also, since the work load is strategic planning, I think results are better if most of the people in the area are experts in strategic planning.

For example, you may put a few operators into an R&D function to help ground the research in practical applications, but you would still want most of the researchers to be scientists and/or engineers. These professionals know how to do R&D. I think the same principle applies to strategic planning.

When putting together a strategic planning department, there should be a blend of strategic planning professionals as well as operations executives rotating through on a temporary basis. Within the blend, I think most should be strategic planning professionals.

Some firms like to rotate through professional planners. They do this by hiring professional strategic planning consulting firms to come in from time to time. Although this can work, it also has some risks. First, since they are outsiders, they may not understand the nuances of your business (which are often the source of a lot of strategic advantage). Second, these consultants are more likely to pull out a generic strategy from their bag of tricks than to create a strategy specifically designed for you. Third, they are usually gone before implementation is over, leaving you to clean up any of their messes. Finally, because they tend to work the entire industry, they will use what they learned at your firm with their other clients. Where’s the competitive advantage if all the firms are working off the same generic strategy?

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