Strategic planning conferences: the strategic planning conference can be more successful than traditional methods consultants and companies use to strengthen their planning efforts. William B. Carper; Terry A. Bresnick.

Full Text: COPYRIGHT Indiana University School of Business 1989

The strategic planning conference can be more successful than traditional methods consultants and companies use to strengthen their planning efforts.

According to Thomas Naylor, the essence of strategic planning is "to provide a conceptual framework for the company's CEO and line managers to enable them to make decisions today that will affect the company in the future" (1980, p. 30). During the last two decades, corporations have tried numerous and varied approaches toward formalizing their planning efforts. Firms have been BCG'd," PIMS'd," and SBU'd" to death as external consulting firms have attempted successfully to implement their own proprietary planning approaches. Still other companies have turned inward to develop a strategic planning capability by instituting an in-house planning team rather than being dependent upon external consultants.

Recently, however, serious concerns have been raised about the appropriate roles and effectiveness of both internal and external strategic planners. In a 1982 Fortune article, Walter Kiechel claimed that consulting firms were rapidly losing their influence because companies had become weary of consultants coming into the firm, making recommendations based upon approaches with which insiders might be uncomfortable, and leaving the companies on their own to implement the plans that were left behind. Kiechel referred to this as the "sea gull model" of strategic planning consulting: the consultants fly in from Boston, circle the client's head, drop a strategy on him, and fly away.

The internal strategic planning staff has not escaped unscathed either. A 1984 Business Week cover story described the new breed of strategic planners that has emerged in the 1980s and claimed that "the reign of the [traditionall strategic planner may be at an end." According to this article, CEOs are realizing that "planning is the responsibility of every line manager. The role of the planner is to be a catalyst for change-not to do the planning of each business unit" (p. 62).

As the pendulum continues to shift back and forth from external to internal, from qualitative to quantitative, and from formal to less formal, new planning approaches continue to emerge that seek to find the optimal balance. One particular approach, the strategic planning conference (SPC), has been gaining in acceptance among planning consultants over the last five years. The SPC attempts to combine the best of both the internal and external approaches by bringing together line managers and planners who provide substantive expertise with external facilitators who provide process expertise. The result is a series of intensive planning meetings that seek to identify key issues, evaluate alternative plans, and activate an implementation mechanism for a corporate plan.

The SPC approach that has evolved is the result of years of trying to assist decision makers with urgent organizational decision problems. The approach is not one of an external analyst coming into a corporation, gathering data on the facts, taking the problem away for study, and later returning with a recommended course of action. Rather, it can be viewed as planning facilitation. The major effort is accomplished in several days through a series of intense group meetings, in which key corporate planners and managers interact to explore the planning process as well as the plan itself O'Connor, 1984).

In addition, the expertise of the corporation is absolutely essential for the success of a strategic planning conference, and the level of expertise needed is typically found in the organization's top leaders. Although supporting information is important, it is supplemental to the SPC process rather than being its focus. As one conference facilitator puts it, "We don't want them to bring data. We just tell them to bring their minds. We don't want them to be preoccupied with searching through papers" ("Guess What?" 1980, P. 6). Even though computer-based models often are used to provide a focus for group discussion during the SPC, they are clearly relegated to a subordinate role as a tool rather than as an end in themselves. The structured conference process thus allows the participants to debate issues constructively while forcing the group to present its collective judgments in a logically consistent and easily communicated fashion aimed at developing a group consensus. CAVEATS

Before describing the structure and content of an SPC, it is necessary to state a few caveats about their nature and use. First, SPCs are not panaceas for corporate planning problems. Rather, they are tools, and like any tool they can be used or misused. Given that one of the basic tenets of using SPCs is that the process is based on developing a shared consensus and strategic vision for the organization, it is imperative that the facilitators be able to control the process and not let it become a forum for anyone's hidden personal agenda. Second, as with any planning process or corporate program, the top level of the organization must be fully committed to the SPC process and make this commitment known to all participants. This need for top-level support and commitment has long been acknowledged in the literature, and it is especially important here because of the intensity of the process and the amount of organizational resources that must be expended to make it work.

Third, depending upon the organization and its level of planning expertise, it may be necessary to engage in some amount of prior training in team building and group process before attempting to implement an SPC. In addition, if the organization's culture is characterized by authoritarian power figures, poor communications, or restricted information flows, it will be necessary to work on making that culture more open and conducive to the type of consensus-building process used in an SPC before an actual SPC can be convened. Fourth, as in all planning activities, the SPC process assumes at least a minimal amount of organizational rationality; without this assumed rationality, it makes no sense to talk about planning in the first place.

Finally, the SPC approach described below focuses on the first of what should be a series of conferences. This first conference would of necessity be limited to those top-level organizational actors who need to arrive at a general, initial consensus on the types of issues that should be discussed during the planning process. Following this, a series of other SPCs should be held at various organizational levels to communicate the plan and develop a total organizational commitment to it. Once initiated, these conferences should be continued on a regular basis throughout the year to review the plan, discuss its implementation, and make whatever revisions may be needed to adapt the plan to changing internal and external organizational environments. No plan should ever be thought of as being cast in stone for all times: Planning, flexibility, and adaptation all go hand in hand. FORMAT

A typical strategic planning conference consists of a very intensive three- to five-day planning session followed by day-long quarterly reviews throughout the rest of the annual planning cycle. The overall goal of the conference is to develop an informed consensus among key organizational players, which will in turn lead to the development of a shared strategic vision for the organization and ultimately to the strategies that will be necessary to implement that vision.

The SPC involves the client organization's planners and managers, as well as a team of three facilitators who specialize in leading, moderating, and documenting the working sessions. Although all team members usually are qualified to assume any of the following three roles, each facilitator normally plays a distinct role in the conference. The group leader moderates and controls the sessions, elicits information, asks questions, channels responses, and builds analytical models in response to group input. A second team member uses a computer to implement in real time the models developed by the group leader and performs any type of quantitative analysis that may be needed. The third team member acts as the conference's recorder, documenting all major decisions and providing a written audit trail of the session's rationale.

The composition of a facilitator team should not be left to chance. The team should be structured to bring to bear diverse experience in disciplines such as business administration, computer science, cognitive psychology, engineering, economics, and operations research. In addition, the facilitators need to possess strong leadership skills, a results-oriented philosophy, a high level of self-confidence, and the ability to think quickly and clearly on their feet. Finally, the more practical experience the facilitators have had in the client's particular business, the greater the probability that the entire SPC process will be accepted by the organizational participants as legitimate. FACILITIES AND EQUIPMENT

The strategic planning conference can be conducted almost anywhere, but most take place at either (1) the client's location; (2) an off-site "retreat" location; or (3) the the result is more qualitative in its orientation. Both the prioritization of objectives and the competitive analyses are examined quantitatively using a decision analytic framework that might include such tools as multi attribute utility analysis (MAUA) or probabilistic risk analysis to structure the issues, capture key uncertainties, quantify subjective and intuitive inputs, and play back" to the participants the implications of their judgments. The final focus of this phase is the identification of those aspects of the current situation where potential improvements are possible. The participants then evaluate these potential improvements and develop a consistent set of business priorities. The product of this phase is thus a clear picture of the current state of the focal organization's relevant business activity.

Strategic direction. This critical phase addresses the questions, "Where should we be several years from now?" "What are the major strategic thrusts that we might pursue?" and "How do we select the appropriate direction?" Often this phase is done in conjunction with the first phase. The emphasis here is on discovering and evaluating a broad range of strategic directions that might represent significant changes from current thinking. Risks, uncertainties, preferences, and priorities are considerable and discussed in detail. Relevant analytical tools might again include MAUA, probabilistic analysis, economic analysis, or a microcomputer decision support system such as Expert Choice. The outcome of this phase is the specification of a preferred strategic direction or strategic vision for the organization that then forms the springboard for the remaining analyses.

Resource allocation. The resource allocation phase of the analysis turns the strategic direction established above into a set of specific, realizable alternatives by addressing the question, "How do we get there from here?" By varying the assumptions about priorities and resources, different approaches can be identified for accomplishing various strategies. Here, participants are asked to evaluate the advantages and disadvantages of each proposed alternative using both subjective judgments and objective data. At this juncture, it should be remembered that resources can and should include more than just money and might be analyzed in terms of time, personnel, facilities, or even floor space. Among the analytical tools that might be used to support the extensive discussions of appropriate tradeoffs would be discounted cash flow analyses to measure monetary effects, probabilistic risk analyses to estimate the impact of uncertain events, or other cost/benefit techniques to evaluate the amount of bang for the buck. The objective of the resource allocation phase, in essence, is to determine an efficient ordering of alternatives and to allocate resources to those alternatives that provide the greatest benefit to the firm given its available resources. Again, the output of a decision support system such as Expert Choice could be useful here in combination with a spreadsheet and graphics package such as Lotus 1-2-3.

Implementation planning and monitoring. The final phase of the analysis turns the strategic plan into a program of action, based on well-defined objectives and clear reporting responsibilities. Objectives are defined in terms of specific tasks and subtasks, with explicit schedules and milestones set for each. PERT, CPM, or GANTT models can then be developed by the facilitators, and such microcomputer programs as Harvard Total Project Manager II can track the progress of the resulting plan. The product of this phase is a documented set of tasks that when implemented will make the changes necessary to accomplish the selected strategies. USE OF GROUP PROCESSES

Many of the inputs used to develop analytical models during the SPC are elicited from the participants using well-documented group processes. Various methods may be used by the facilitators to take advantage of the positive aspects of the group's behavior and to minimize the negative effects. These techniques can be categorized into three approaches: Delphi techniques, nominal group techniques, and consensus group techniques.

A Delphi can be described as a mechanical method for controlling group processes in which each participant gives his or her individual opinion in an anonymous fashion and is then shown all responses but not told who provided which one. The participants subsequently revise their opinions and the assessment process goes through additional iterations. The Delphi process stresses anonymity and works well if there are strong, dominant personalities in the group who need to be restrained without exerting overt pressure. On the negative side, Delphi process is time consuming, an the participants often lose interest after a few iterations.

Nominal group tec or all individuals to initially provide assessments to the group without discussion. Once these comments are made, the group then discusses all judgments for clarification and evaluation. Individuals may reconsider their assessments at this point and any remaining differences are resolved through an iterative process of discussion, clarification, and evaluation. The approach is most appropriate for combative groups that have wide variances in their perceptions and sources of data, and where there are important issues that have never really been discussed openly.

Group consensus techniques involve open group discussions aimed at producing a consensus view by encouraging face-to-face exchanges of information and direct interactions. They are most effective with cooperative groups, but skilled facilitators usually can overcome the problems introduced by the presence of combative participants. There is some evidence to indicate that conflict during group decision processes may lead to a more critical appraisal of assumptions and alternatives, but the same studies have found that consensus approaches are more functional in preserving the long term working relationships needed in top management teams. In addition to maintaining intragroup harmony, consensus processes have been shown t promote member satisfaction and in crease the likelihood that the group's decisions will be implemented by the members. The facilitator's job during these sessions, therefore, is to keep the discussion focused on the scheduled agenda, stimulate the critical analysis of assumptions and alternatives, and not allow any individual to dominate the group. Most of the documented SPCs have used group consensus techniques rather than the other approaches. ADVANTAGES AND DISADVANTAGES OF THE SPC

he Strategic Planning Conference

approach offers several advantages

when compared with more traditional, but less intensive and unstructured, strategic planning methods. Among these are the following:

* Since the SPC process is highly focused and productive, results that usually take weeks or months to achieve can be accomplished in a few days of concentrated effort.

* The process involves a broad base of technical expertise and management support throughout the organization. This widespread participation in the planning phase leads to a greater commitment from the organizational participants and a more successful implementation of the plan that results.

* The approach specifically embodies and capitalizes on the substantive expertise of the client organization. This means that the plan is produced with the client instead of for the client. This again increases the likelihood that the plan will be accepted and adopted.

* Because everyone participates in a series of directed discussions focused specifically on strategic planning, communication among the participants is reliable and efficient. Noise and translation problems are thus eliminated and the thorough documentation that is kept as the process unfolds provides a permanent record of the conference proceedings and results. This documentation also serves as a reliable organizational memory of how and why certain decisions were made.

* The use of explicit computer-based quantitative decision support models helps the participants understand and focus on the most critical issues, debate those issues logically and clearly, and apply their priorities consistently. Rather than debating personalities, the participants can debate the merits of a given alternative. Moreover, since the computer is operated by the facilitators, it does not create a distraction for the participants or become an end in itself.

* The SPC approach pays significant attention to the implementation of results, thereby ensuring not only that the strategic plan is analytically sound, but also that it can be used by the people who will have to implement it on a day-to-day basis.

* Finally, the approach ensures that participants have a vested interest in the strategic plan they have developed simply by virtue of having been a direct part of its formulation. Once again, the participants are more likely to support the plan if they have understood the approach and have had a fair opportunity to present and debate their own viewpoints.

This consideration of the advantages of SPCs should not be taken to mean that the approach is without its faults. Among the problems that can be associated with the use of SPCs are the following:

Since SPCs are built around intense, multi-day sessions, it is difficult to get high-level managers together for extended periods of time. Three days may be difficult to achieve, and five days may be virtually impossible.

The costs, both in man-hours and actual dollar expenditures devoted to the SPC, can be very high.

o If the wrong organizational members are selected to participate in the SPC, the results can be ineffective.

The heavy reliance on expert, subjective judgments as opposed to hard verifiable data can create problems during the process, especially for those participants with quantitative backgrounds or "you will have to prove that to me" attitudes.

Since the facilitators are not experts in substantive corporate matters, they may not understand the implications of the judgments elicited from the organizational participants. Although this can to a great extent be eliminated by the use of experienced facilitators, the possibility still exists that invalid analyses may be presented or that impractical alternatives may be chosen.

On balance, the SPC appears to be an innovative approach to developing a strategic plan, one that overcomes various problems encountered with other, more traditional, consultative methods. The two most significant benefits of using the SPC approach to strategic planning appear to be: (1) the product of the process (the strategic plan) is developed with the client rather than for the client; and (2) the product of the process is based upon a shared consensus and strategic vision of what the organization is now and what it wants to do and be in the future. These two factors greatly increase the likelihood that the organization will initially accept the plan and subsequently implement it. As most strategy consultants well know, the best plan in the world is of no value to anyone if it is stuck in a file cabinet and never implemented.

The product of a strategic planning conference is a well-defined, logical plan for action, supported by a thoroughly documented analysis of the organization's current status, environments, goals, constraints, and strategic options. The plan represents the best course of action for the organization consistent with the informed judgments of the participants and is based on a shared strategic vision. As such, the resultant plan should provide the organization with a road map for the future as well as a mechanism for its successful implementation.

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