Strategic planning helps marketers answer what to sell, who will buy it, and how to beat competitors in the marketplace. However, in today's volatile and chaotic marketplace, some executives argue that it's better to "fly by the seat of your pants" and skip forecasting. What happens when strategic planning is locked in the basement? Let's look at two cases to find out.
It is tempting to confine "strategic planning" to the ivory tower of executive decision making. And taking into account that most CMOs don't have a seat on the executive board; should marketers wash their hands of the topic? Not so fast, say the analysts at Gartner.
A report, "Top Ten Marketing Processes for 2008-2013", clearly labels "strategic planning" as a concern of the marketing discipline.
Strategic planning involves taking into account the necessary systems, people, resources and processes needed to design and execute a future picture. And while it can be argued that today's marketplace is simply too complex, interconnected, and unstable to plan and prepare for anything longer than a twelve month timeframe, the following cases show the importance of keeping the future firmly in front of you.
"The Smartest Guys in the Room" is a story about the rise and fall of Enron. The book details what happens when you take really smart individuals, and put them together in no-holds barred, survival of the fittest cauldron with loose rules and even looser ethics.
One of the more interesting quotes is from Jeff Skilling, the former CEO of Enron who said, "I think strategic planning is the antithesis of building a corporation." Jeff really was one of the smartest guys in the room and he said many brilliant things during his tenure at Enron. However, this phrase wasn't one of them.
Jeff believed in a "let the cream of the crop rise to the top" type of management style, where players would duke it out in a Darwinian/Machiavellian manner. If an initiative made sense, had the political backing of players in the firm, and promised to make oodles of money, it was usually funded. At Enron, strategic planning was locked in the basement. And we all know how the Enron story ended.
In "House of Cards", William Cohan chronicles the rise and fall of Bear Stearns. In a similar "locker room" mentality to that of Enron, managers were very insular and most were Bear "lifers" (they started their careers at the firm).
In a culture that was free wheeling, excessive, and pretentious, there was little room for strategic planning. Cohan writes, "(At) Bear the historical view of the firm is that they don't plan. They don't have business plans. At one point they were proud the only thing that was planned was the executive dining room. Everything else was opportunistic."
In fact, former CEO and Chairman Ace Greenberg said, "What our positions look like at the end of the day is long range planning as far as I am concerned." At Bear, strategic planning wasn't locked in the basement; it never existed in the first place.
In California's San Joaquin Valley, the fog sometimes gets so thick that when driving you can only see 200-500 feet in front of your car. These pervasive hazes are dangerous to all drivers because they literally have no idea what's ahead–drivers are lucky to see the tail lamps of the lead car! It could be open road ahead, or a fifty car pile-up. Limited visibility can be extremely dangerous.
We cannot hold the lack of strategic planning solely responsible for the downfall of Enron and Bear Stearns. There were too many other factors at play to draw this conclusion. However, it is also clear that when management has little visibility into upcoming adverse events (ex: credit crisis)–all heck can break loose, and possibly devolve into cataclysmic results.
Where is marketing's responsibility in this?
Marketers should not only have a pulse on customer wants/needs but also sentiment. Customers are pretty smart–they often "sniff" trouble or sign of a potentially adverse event coming long before we can. Marketers need to understand what customers are saying and thinking. We need to discern what constitutes a critical mass and tipping point. We need to have the mechanisms in place (not just social media) to capture and act upon this feedback.
With our eyes wide open, and backed with historical and near real time data (quantitative and qualitative) analysis we should be able to help our companies navigate times of stress.
Marketers–don't let your company become next case study for lack of strategic planning. We have a responsibility to our companies, customers and ourselves to let strategic planning out of the basement.
* A HBR article, Bringing Customers into the Boardroom argues, "In too many companies, marketing is poorly aligned with strategy." Do you agree? If so, why do you think this is the case?
* Will involvement in strategic planning help get marketing back on the CEO's agenda?
* Author Nassim Taleb says that humans tend to, "Focus on the minutiae instead of the large (unexpected and devastating) impact events." If you agree with this statement, what is a potential solution?
Take the first step (it's free).
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