Strategic Planning Rethought

Traditional strategic planning approaches are built on hard, analytical, just-the-facts thinking. Since the mid 1990’s, and as codified by Michael Porter of Harvard University, the gold standard of strategic planning has been “a rational decision-making process focusing on getting the right data, avoiding biases and choosing activities that differentiate a firm from its competitors.”

This is well and good; those elements are fundamental to any thorough planning process. Such approaches are limited, however, and new studies in neuroscience show that analytic thinking does only part of the job.
What does the data show for the huge amounts of money spent by businesses, corporations and organizations on strategic planning processes? In 2011, the Economist reported the estimate of that year’s expenditures at $20 billion. As most high-end private consulting firms do not make their revenues public, that figure was decidedly conservative. Of 197 companies included in the report, 63% anticipated positive results from strategic planning initiatives, leaving a failure rate of more than one-third. Clearly, the price of missing the mark in both process and product is immense. Additionally, losses occur on multiple levels: the more obvious money and time, but also the indirect and often more damaging denigration of employee morale and trust in organizational leadership. 
What’s going on? Where is the breakdown? Why is SPOTS - Strategic Plans On The Shelf – now an industry epidemic? Smart people are hiring likewise smart, competent organizations to improve an area critical to the success of companies and businesses, and yet things are not as they should be. 

Recent neuroscience research may shed a light. These studies indicate that a major contributor to sub-optimal performance may be an incomplete, even flawed, understanding of the very thinking that strategic planning is built on. The purely analytical, linear, cognitively-driven approach is only one aspect of our brain’s enormous capacity. It is becoming clear that depending entirely on the rational at the expense of insight and intuition, and ignoring the emotional, social, and sensory wiring that is basic to our survival, actually undercuts our effort.

How else might we look at these other highly valuable brain activities? 

Daniel Goleman, pioneer in the field of emotional intelligence and author of a new book called Focus, states simply, “In order to make a good decision, we need to have feelings about our thoughts.” More importantly, we need to move beyond just having the feelings to cultivating the capacity to understand and make appropriate meaning of them. Individuals skilled at processing feelings can think clearly and engage in substantive dialogue with others. They also make better decisions. 

Based on numerous studies and years of experience with successful organizations, Goleman directly counters the long-standing suspicion of using feelings in decision making - “Regarding emotions and feelings as soft or as noise compared to cognitive reasoning results in a limited understanding of both strategy and leadership. Emotional intelligence isn’t soft. If emotional obliviousness jeopardizes your ability to perform, to fend off aggressors, or to be compassionate in a crisis, no amount of attention to the bottom line will protect your career. Emotional intelligence isn’t a luxury you can dispense with in tough times. It’s a basic tool that deployed with finesse is a key to professional success.”

Goleman’s stance is not unique. Jeanne Liedtka, professor at the University of Virginia’s Darden School of Business who publishes extensively on Design Thinking, has a similar view. In a recent Rotman article, she writes “I have come to believe that an even more fundamental and seemingly obvious cause (of the failure of strategic plans) is the long-standing failure to align word with deed. Nobody really cares about these strategies. Decisive strategies must be felt as personally meaningful and compelling by the members of the organization who must adopt new behaviors in order to execute them.Thinking alone won’t get you there.”

In moving a person to action, feeling trumps thinking. This is primal human behavior, unchanged throughout our time on the planet. As Antonio Damasio, a leading neuroscientist/neurobiologist and prolific author, says succinctly, “If reasoning makes the list but emotion makes the decisions, then the integration of thinking and feeling becomes a key area for the development of effective executive functioning.”

Effective strategic thinking involves a clear understanding of our own feelings about a given idea and consideration of how others may react or be affected. A good test for judging the appropriateness and usefulness of a decision is its impact on all of those involved. If we are to reduce the losses caused by strategic planning failures, leaders would do well to account for both the cognitive and emotional impact of their decisions, on others as well as themselves, before moving into action.

Adapted from an article in The NeuroLeadership Journal, Volume 4, authors Roderick Gilkey, Ricardo Caceda, Andrew Bate, Diana Robertson and Clint Kitts.

Antonio Damasio, The Feeling of What Happens (1999)
Daniel Goleman, The Brain and Emotional Intelligence: New Insights (2011)
Jean Liedtka, Beyond Business Strategy: Strategy as experienced (2011)