Strategy for an Uncertain Future

A colleague of mine was asked a really interesting question recently about strategic planning. I thought that his question and her response merited a blog entry on the topic.

Strategy and planning (hereafter, planning) ought to serve one of two ends, execution or learning, but not both. Choosing the right mode will save us a lot of pain. (So-called "strategic planning" is often a mixture--we figure out where we want to go and chart a course to get there--which, as experienced people can tell you, often yields mixed results.)

First, I think it is important to note that planning-to-execute is well suited to "linear" problems--relatively static current state, known input-output relationships, predictable future influences, etc. Planning-to-execute is also the default mode of planning for most organizations. (I think the reason for this is that as a species we are prone to underestimating uncertainty. But that's another subject for another entry.) In many organizations planning-to-execute, it is the only mode of planning.

My experience, though, is that most of the challenges organizations face are non-linear--sensitive to initial conditions, messy or unknown input-output relationships, uncertain future influences, etc. Thus, organizations would be better served if planning-to-learn was their default mode.

Boeing has been suffering over just this issue in recent years. After Airbus outdid Boeing in 2005, Boeing decided it would transform itself to become the first producer of "all-composite" commercial aircraft. ("All composite" is in quotes because in reality they merely inverted the ratio of aluminum and composites from roughly 50% aluminum/15% composites to 15% aluminum/50% composites.)

To plan for this transformation, Boeing used their familiar and very effective planning processes. The unfortunate result has been lots of trouble. Rather than drag you through all the details, I thought I'd cite one fact alone: the 787 was scheduled to enter service in May of LAST year, and currently looks as though it might enter service in Q4 of NEXT year.

I'm not trying to pick on Boeing here. They are, in fact, better at planning than most any organization around. In this case, though, they used the wrong process for their situation. Given the discontinuity between sourcing, designing, and actually making an "all-composite" airplane, they needed a different process for planning--one designed to discover what they didn't know, to clarify emerging problems, and to develop new plans based on recent learning.

The lesson I draw from their experience--and that of many others--is that we ought to choose the right tool for the right job. And because I believe that most of the challenges we face are less certain than we think, I also believe that our default mode ought to be planning-to-learn. After all, given our current proficiencies, when the need arises we can easily pull out our planning-to-execute toolbox.