5 blunders in strategic planning


Is strategic planning still relevant? For most development agencies I have engaged, strategic planning is merely an exercise to comply with the ‘requirements,’ a checking of the box so to speak. Some were even contented that they have a vision and mission statements as if those were the end-all in a long-term plan.

Strategic planning as a tool in organizational development  allow institutions to easily adjust to the changing environment and the shifting trends in the industry. It usually starts with a SWOT (strengths-weaknesses-opportunities-threats) analysis, the basis for  strategic statements that determines the directions to take, and the key activities to be implemented.

As the blueprint for action, it should guide and enable the institution to pursue its growth targets and adjust when disruptive events happen. Despite having a strategic plan, there are institutions that are dislocated and finding it hard to cope when the environment changes. Being caught unaware when change happen is an indication that something is wrong with their plan. Five of the common blunders in strategic planning are discussed in this article.

1. Erroneous internal assessment. If the staffs are primarily responsible for evaluating the strength and weaknesses of the institution, partiality and personal biases usually cloud the results. Some staffs will tend to hide the weaknesses as it may reflect on them, or deflate the weaknesses in such a way that it will not reflect too bad on them. Strengths are also padded to offset the glaring weaknesses. In the end, you look at the mirror and be surprised when you cannot recognize the image reflected in it.

2. Misreading the external environment. A comprehensive picture of the environment, including future trends, is one of the vital elements in planning. Internal experts can provide their own reading of the environment, but it is also necessary to get opinions of external industry experts. It would also be helpful to get resource persons from other industries as their movements will also affect the industry you are in. Getting the most comprehensive briefing on the trends and the directions of things will enable the institution to steer its strategies in the right direction and anticipate responses to disruptive events.

3. Failure to make decisions. Strategies are big, bold moves aimed at ensuring the institution is abreast with the latest trends in the industry. Strategic planning is the point when leadership is expected to decide and steer the institution towards further growth or adjustments in response to anticipated disruptive events. However, some leaders would rather not ‘rock the boat’ and stay on course with what is familiar and routine. And when the expected changes happen, put the whole institution into panic mode.

4. Recycled activities. There may be jargons and the latest terminologies in the document, but the activities in essence remain the same with those in the previous plans. Same activities with end-results projected in five years and divided into annual activities. Disruptive events derail these standard activities and will require special team and effort to address.

5. Reactive rather than pro-active plan. A strategic plan that does not address issues of innovation and disruption is a poor plan. The wind of change will easily sweep away the institution without a pro-active plan.

There is a saying that goes, ‘if you fail to plan, you plan to fail.’ It is the same if you have a flawed plan.

Clarifying Leadership, Governance and Management

For the past three months since May 2012, a series of seminars on leadership and governance were conducted for officers of microfinance institutions in Vietnam. The course was aimed at helping the participants clarify governance, leadership and management functions and be able to delineate roles of various positions in the structure of their institutions.

At the start of the seminar, most of the participants admitted during the discussions that the concepts of leadership, governance and management were confusing for them. The confusion usually stemmed from their practice of having positions with multiple functions. This practice was traced at the time when an organization, starting small, has to have people assuming multiple roles.  As the organization grows, the functions of these people became ingrained and cannot be segregated anymore.  Forcing the segregation would involve emotional and reputational concerns that may affect the smooth operation of the organization.  This apparent confusion was evident not only among the participants to the training but also to other microfinance institutions as well. It may even be true to other non-government organizations in the country. 

One of the sessions emphasized two main qualities inherent and distinct to a leader. The first is the ability to express and share a vision; and second, the ability to inspire the people to work towards the attainment of that vision. An exercise was done where each participant was asked to identify a person whom they think has the qualities of a leader, a sort of their model leader. The responses placed on top of the list Ho Chi Minh with four leaders considering him the ultimate model of a leader.  Following closely after Uncle Ho were responses pointing to the director of the MFI as the other model of leadership. These responses were mostly from the participants who are senior leaders of the MFIs.  The fact that MFIs in Vietnam are part of the Women’s Union explains the tendency to look at leaders of mass organizations as the epitome of leadership.  Steve Jobs, Mohamad Yunus and Jesus followed after Uncle Ho and the MFI leaders.

Governance on the other hand, refers to the decision-making structure of an institution. This function is usually the mandate of the board of directors of an institution. The board that represents the general assembly of a membership-based organization or the investors of a company provides policy directions to the management team of the institution.

Finally, the implementation of the policies approved by the board is given to the management team. The team is composed of the executive director and his team who makes sure that the policies are translated into work plan and budget designed to attain the long-term vision and the immediate operation of the institution.

The confusion is mostly in not knowing the difference between policy-making and implementation. There are instances where some members of the board who are more knowledgeable than the executive director tend to micro-manage and even do the implementation themselves. There are also instances where the executive director is dominant and the board has degenerated into a mere rubber stamp. The ideal situation therefore is the capacity of the people in the institution to maintain a balance between the two functions.     Image