1 Stop Making Plans Start Making Decisions

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DECISION MAKING

In most companies, strategic planning isn’t about making decisions.
It’s about documenting choices that have already been made, often haphazardly.
Leading firms are rethinking their approach to strategy development so they can make more, better, and faster decisions.

STOP MAKING PLANS

START MAKING
DECISIONS
by Michael C. Mankins and Richard Steele

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S STRATEGIC PLANNING COMPLETELY USELESS? That was the question the CEO of a global manufacturer recently asked himself. Two years earlier, he had launched an ambitious overhaul of the company’s planning process. The old approach, which required business-unit heads to make regular presentations to the firm’s executive committee, had broken down entirely.
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Richard Steele
(rsteele@marakon.com) is a partner in Marakon’s New
York office.
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thing else, this disconnect – between the way planning works and the way decision making happens – explains the frustration, if not outright antipathy, most executives feel toward strategic planning.
But companies can fix the process if they attack its root problems. A small number of forward-looking companies have thrown out their calendar-driven, businessunit-focused planning processes and replaced them with continuous, issues-focused decision making. By changing the timing and focus of strategic planning, they’ve also changed the nature of top management’s discussions about strategy–from “review and approve”to “debate and decide,” meaning that senior executives seriously think through every major decision and its implications for the company’s performance and value. Indeed, these companies use the strategy development process to drive decision making. As a consequence, they make more than twice as many important strategic decisions each year as companies that follow the traditional planning model.
(See the exhibit “Who Makes More Decisions?”) These companies have stopped making plans and started making decisions.

Where Planning Goes Wrong

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n the fall of 2005, Marakon Associates, in collaboration with the Economist Intelligence Unit, surveyed senior executives from
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