Nonprofit sector adopted the strategic planning in the mid-1980s. Organizations were interested in management techniques, they held meetings and continuous training in order to accomplish the strategic planning.
Organizations often involve everyone in planning, they claim to support teamwork and value individual entries; which are goals could be achieved in different ways efficiency and productivity.
Strategic planning usually focus on real problems in the organization, issues related to the chief executive officer, financial planning and mismanagement, conflicts between the board and the executive team, racial tension, and other problems.
Reasons of the Strategic Planning Failure
– Financial Sustainability: Financial sustainability should be connected to strategic planning, and a priority of the organization’s goals. Finance must be an essential and clear part of the strategic plan.
– Analytical Capability-Building: Strategic planning often fails to build internal analytical capabilities or to review relationships with stakeholders in the organization. Instead, it often benefits consultants or for-profit companies.
– Key Questions Remain Unclear: There is a problem in strategic planning related to key question that remain without a clear answer at the end of the planning process. It does not provide clear answers to the important questions that require scientific answers.
Five Examples of Strategic Alternatives:
– Concentration: It means that the company is ready to get rid of many of its diverse holdings, in order to focus on its core business.
– Diversification: It indicates that the company suffers from declining sales and/or profits and hopes to link up with other companies to increase its net profit.
– Stability: The company does not need a strategic alternative in case of good condition and high sales and customers are demanding its services.
There is an alternative, in addition to the alternatives mentioned, seems promising, has a lot of discussion and is adopted by global consulting institutions. It is the methodology of “zoom in and zoom out” strategy in a world that challenges predictions and accelerated changes.
The Flaw in the Five-year’s Plan
Despite the challenges of strategic planning in a rapidly changing world, most companies have maintained the five-year plan as a key framework. Regardless of the time frame, executives have increasingly adopted a strategy-reaction approach that aimed at predicting and dealing with developments as quickly as possible.
Many see that action strategy, not reaction, is the most effective way to deal with change, taking into consideration flexibility and speed as keys to success.
Many companies are forced to disperse their efforts and distribute their energies more than ever to deal with a growing range of initiatives and challenges. In fact, even the largest companies are constantly aware that they are no longer able to cover their new programs and initiative needs due to the limited resources available.
If the goal of the strategy is to maintain current financial performance over time at least, this is unfortunate evidence that the current strategic planning methodology is not working properly.
The Appropriate Alternative Approach of the Strategy
There is an alternative of the reaction strategy that some of the most successful digital technology companies have adopted over the past few decades called the “zoom in/ zoom out” strategy.
In this strategy, short or long-term parallel time horizons are used. The short horizon is 6 to 12 months, while the long one extends between 10 and 20 years. Both promote immediate and long-term strategic impact.
Zoom in /out Strategy is Suitable for a Continuous Changing Era
With accelerated change, performance pressure and rapid achievement, pressures are accelerating and traditional planning methods are no longer commensurate with the speed of change and increased risk. Companies have begun to lose competition points and challenges.
The desire to learn and plan faster is what drives this strategy to emerge and stand out. Leaders of companies seek to enhance what is learned in the short and long term to constantly modify and refine business methods and business strategies, in order to achieve greater impact on outcomes in a less predictable world
What does the Zoom Methodology achieve?
It brings a number of benefits, pushes leaders out of the comfort zone especially (quarterly or semi-annual) results.
This methodology resists the tendency to strongly disperse institutional resources and capacities through many scattered initiatives, and focuses, in the short term, on initiatives that will have the greatest impact in improving our movements towards a future opportunity.
Possible Objections to the Zoom Methodology
– The future is uncertain and difficult to predict
– Everyone wants short-term results
– Any short-term economic impact of this methodology is likely to be marginal and will take a long time to reap.
The “zoom in/zoom out” methodology is a great example of combining two contradictory goals: preparing for the future in a serious way with greater near-term results and impact.
It is about determining the future path rather than taking successful temporary positions or smart quick moves.
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