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Volume 25 - March 2009

ASAE/CAL: The Perils of Strategic Planning

In a word, strategic planning stinks. Oh, it might do some good for some people, but all in all, the idea should be scrapped in favor of business practices that embrace flexibility.
By: James F. Hollan, CAE

A CEO makes his case against the strategic planning song and dance. 

Most strategic plans don't work. They involve too much paper, too much time, too many nodding heads, and far too many poorly informed so-called experts. I know that many association CEOs believe the same, but we exist in an environment where it is anathema to even question the validity of the strategic planning process. You might just as well stand up at the next board meeting and suggest everyone strip down to his or her underwear as question the usefulness of the strategic plan you have in place. 

It's all right to discuss ways to improve the plan or actualize the plan or even modify the plan. You can certainly pay consultants or facilitators to help set up a strategic plan or improve the one you already have in place, but the nonprofit sector currently has little room for questioning the usefulness of the strategic planning process itself. It's time to challenge that reality.

I've been in senior-level management long enough to remember when W. Edwards Deming's Total Quality Management was supposed to be the answer to all of our management and planning problems. I've spent countless hours listening to supposed experts walk various teams through expensive training programs with little to show for it at the end of the day. I remember other experts singing the praises of Management by Results as still others told us that Management by Objectives was the true path to enlightenment. Each new system was touted as the unassailable answer, and woe be the executive who dared to question the process, since one core dynamic built into each system is the dictate that those who question the system are the enemy. It was a frustrating time for workers on the lower rungs of the leadership ladder who questioned the process, which led management to think they were not team players. Sadly, this kind of shortsighted thinking is still common in our industry.
Not too long ago, I sat in on a strategic planning session with a facilitator who, for $5,000 a day, led a board through the strategic planning process. In his approach, he used Texas Instruments as a business model for the process, giving the impression that it was a success story. At no time did the facilitator mention that Texas Instruments later abandoned this system after a long series of marketing disasters. At no time did the facilitator mention that the system he was recommending had been described by a senior executive at Texas Instruments as a paperwork mill that made it absolutely impossible to respond to anything that moves quickly.

What worries me most is that so many in the nonprofit sector assume that strategic planning is the way to plan. There is a presumption of quality and effectiveness to strategic planning that is simply not justified by results. Many others have logically and creatively debunked the notion that strategic planning is an essential function.

Henry Mintzberg's brilliant study, The Rise and Fall of Strategic Planning, is the place to start if you want to liberate your thinking. This classic and compelling work traces the rise of strategic planning from the early 1960s through its heydays in the 1970s and 1980s. It also outlines the reasons behind the demise of strategic planning in the 1990s. Mintzberg fundamentally takes the process apart and offers compelling arguments that strategic planning discourages change, narrows a company's vision, limits flexibility, and is in fact oxymoronic. The system fails more often than not because strategy is about synthesis and planning is about analysis. Even more unsettling, he points out, is the "assumption of detachment" that separates strategy from operations to the detriment of the organization.
Now the real irony is that Mintzberg is also a past president of the Strategic Management Society. The book ultimately condemns the strategic planning process as one that doesn't work anymore, and it warns that the process can be downright dangerous. My favorite quote in the book comes from his collaborator, J. Brian Quinn of Dartmouth, who said, "A good deal of the corporate planning I have observed is like a ritual rain dance; it has no effect on the weather that follows, but those who engage in it think it does. Moreover, it seems to me that much of the advice and instruction related to corporate planning is directed at improving the dancing, not the weather."

Larry Bossidy, retired chairman and CEO of Honeywell International, and Ram Charan from Harvard Business School point out that it is time to radically change the way we think about business. In Execution: The Discipline of Getting Things Done, they say the following about strategy: "Strategy? So much thinking has gone into strategy that it's no longer an intellectual challenge. You can rent any strategy you want from a consulting firm." In their follow-up book, Confronting Reality, they argue that the methodologies used to plan the future of business have steadily drifted away from reality, and they point out that "the strategic plans of most companies don't work." They didn't say some. They said most.

From his classic In Search of Excellence back in 1982 through major works like Liberation Management  andThe Circle of Innovation, Tom Peters is certainly one of the most influential business thinkers of our age. In his recent Re-Imagine: Business Excellence in a Disruptive Age, Peters sets out his new philosophy in which he states it is the foremost task—and responsibility—of our generation of leaders to reimagine the entire business process. To that end, it is necessary to break away from that which does not work if we are to free up time to move forward. When it comes to management, he states that one of the three "Losing Bets" of the 20th century was the "Strategic Planning Bet," and he argues that we must reinvent the process of creating strategies by emphasizing informal learning and personal vision.
It's also worthwhile to look at ASAE & The Center for Association Leadership's 7 Measures of Success, which applies Jim Collins' Good to Great methodology to associations. 7 Measures notes that textbook strategic plans were most common not in the remarkable group of associations but in the less-successful comparison group of associations.

It is now a digital world. The internet and affordable high-speed technology have radically reduced timelines and profoundly changed the way we need to operate and the way we need to plan. Just a few years ago Meg Whitman, CEO of eBay, held enterprise strategy meetings once or twice a year. Now they are needed several times a week. Tom Peters is a bit more succinct when he says, perhaps a bit tongue in cheek, "You are lucky if you can write a five-week plan that makes any sense … yes … after five weeks." Speed and flexibility are essential to management success yet, time after time, I've found that the strategic plans in place at nonprofits, especially those in trouble, discourage both elements and are in fact inimical to success.

The job of association executives and board members should be to lead the organization. They must evaluate all that the organization does and examine how the organization does it. Planning is fundamental to success—always has been and always will be. However, it is naive and counterproductive to believe that strategic planning, as we know it, is the answer.
Are there great strategic plans out there? Yes. Do some strategic plans advance some associations? Yes. Is strategic planning necessary for association success? Absolutely not.
I took over the leadership of one national association that had a tightly coordinated and fully orchestrated strategic plan in place thanks to a very expensive outside consultant and many, many hours of board participation. The directors were stunned when I informed them that they would run out of money and have to shut down in 18 to 24 months unless the association made some radical changes immediately. They spent so much time planning for the future with a lot of big audacious ideas that they failed to get the current work done to keep the association solvent. I've seen most nonprofits regularly waste valuable staff time on mountains of useless paperwork in order to justify that which should be obvious. Here is the crazy thing: When I work with an association in crisis and point out that the strategic plan is a waste of time and should be ignored, it is typical that they confess individually that they always thought it was a waste of time but they didn't want to rock the boat. It's time to rock the boat.

Flexibility and fluidity, not strategic plans, are the keys to success. Flexibility itself has become a science with its very own Journal of Flexibility Management; however, I am talking about the ability to respond quickly without moving through layers of committees for approval to adjust the plan. Here is a simple example of flexibility in the workplace:

The planning committee for an annual meeting had agreed to test a jazz dinner cruise as a spousal event. The cruise boat held up to 325 people and the association would make a $7 profit on each ticket sold with no minimum commitment. When the cruise event sold out in two days, the meeting planner immediately asked permission to book an additional cruise boat. Permission required the approval of the planning committee, which met every other month. The planner received the go ahead almost two months later—just 10 days before the event. In the interim, 250 members trying to book the event were told to wait and see if another boat could be booked, their conference payments could not include the cost of the boat ride since it was in doubt, all had to be notified that the cruise was available when approved, and all were then charged for the extra event. A classic example of wasted staff time, extra bank charges for an additional charged event, and poor customer service. A flexible organization would have empowered the planner to make the needed addition or, at the very least, allowed the chief staff officer to decide. Members would be happy, staff time would be saved, and profits would increase. If the addition of another boat turned out to have a poor result with just a few more registrants, a great board in a flexible association would still say, "That was a smart call."

Here is a larger example:
When I served as the vice president of a university our standard process for hiring senior-level staff required a vetting process that involved five interviews and six to 10 months. The process was labor intensive, highly repetitive, and written in stone. Our compensation package was excellent and typical of peer institutions, but it was common that half of the candidates moving into the late stages of interviews would inform us that they had accepted employment elsewhere. I will tell you that almost all of the candidates who accepted another position during the process were the top choices in each round of our interviews.

The outcome of the university's strategic plan requiring input from so many teams is that we regularly lost our best candidates because of a cumbersome process. If you think it through all the way, you will realize we actually ended up hiring people who normally would have been our fourth or fifth choice. We lost our top candidates to institutions able to make a decision in a timely fashion.

One of the very best plans I've ever seen in the nonprofit sector was just two pages. At the top of page one was a brief statement that basically said, "We are doing a very good job and we believe that these three things will make this organization even better. We believe they are three things we can accomplish next year."

Below that were three goals for the coming year with the names of staff and board members in charge of accomplishing those goals, a very rough timeline for each, and a goal number for success. The second page listed two additional goals for the following year with staff and board members assigned to each with the understanding that they were "B" list items. It would be nice to accomplish them but not mandatory. The plan could actually have been collected on one page, but they used two for graphic clarity. This national organization had an annual operating budget of more than $10 million, and it consistently received very high satisfaction ratings from its members.

Far too many nonprofits have become process fat. When Tom Peters talks about reimagining the business process, he is not talking about the process from the 1950s or 1960s. He is talking about the way we do things today and the need to break away from practices that do not work. He also emphasizes that a successful process will emphasize informal learning and personal vision. If we are to lead successfully, the first step requires us to examine the basic tools we are using.

In other words, you can drive many nails for many years with the heel of a shoe, convincing yourself that the shoe is the very best way to drive a nail. You might even slap yourself on the back when you discover that loafers work much better than high heels. In some ways, it actually makes sense, up until the time someone introduces you to the hammer.
James F. Hollan, CAE, is president and CEO of GALA: Globalization and Localization Association. Email:

Reprinted with permission, copyright August 2008, ASAE & The Center, Washington, DC.
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