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The rise and fall of strategic planning

Book cover

by Henry Mintzberg, Pearson Education, 2000.


Mintzberg at his most iconoclastic. Rational, ivory tower, analytical activity, removed from the scene of action, is attacked as no basis for strategy, which emerges from and in the action. Leaders should get their hands dirty, feeling the trends as they develop a strategy which is concerned with the direction of the company. Planning belongs to a later stage when programming the detail of implementation.

(Reviewed by Edgar Wille in June 2004)

(These book reviews offer a commentary on some aspects of the contribution the authors are making to management thinking. Neither Ashridge nor the reviewers necessarily agree with the authors’ views and the authors of the books are not responsible for any errors that may have crept in.

We aim to give enough information to enable readers to decide whether a book fits their particular concerns and, if so, to buy it. There is no substitute for reading the whole book and our reviews are no replacement for this. They can give only a broad indication of the value of a book and inevitably miss much of its richness and depth of argument. Nevertheless, we aim to open a window on to some of the benefits awaiting readers of management literature.)


The rise and fall of strategic planning written in 1994, is a classic, one which managers should know about, but one with which they may well disagree, even quite strongly. But even if they do, they will have learnt something of value. For over 30 years Henry Mintzberg has been challenging sacred cows and often thinking the unthinkable.

It isn’t possible for me to provide a totally objective, neutral summary of this book. Mintzberg demands debate. You don’t read him; you argue with him. You challenge him as he challenges you. So this summary will include some of my own reactions and in that regard will be a review as well as a summary.

From the start you know he is going to oppose strategic planning and you may find yourself saying: “Well that’s stupid; of course you have to plan, whether it’s just about your domestic affairs or running a large multinational”. It took me to page 270 to realise that he was opposing the use of detailed, highly documented plans developed by a team of planners as a means of forming a strategy. In his last chapter he actually approves a measure of planning; after a strategy has been formed, planning can assist with implementation.

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Planning and the future

But strategy, as he sees it, is the development of a direction in which an organisation is to go, with a recognition that the future can change rapidly and that the best laid plans of men as well as of mice can go awry. He gives the example of the 1973 oil crisis which wrecked the finely tuned plans of a number of oil companies.

He goes back to World War One and gives the example of military planners who had the most detailed plans for victory on the Western front. However they hadn’t reckoned with the weather; the mud of Flanders defeated them and made nonsense of their best plans. The tragedy there was that they stuck with their plans and millions died. Plans take on a life of their own and become sacrosanct. Instead of becoming the road to competitive success they have actually often impeded it.

Seven years after his book, 9/11 would have been an obvious example of the way in which forecasting, which is so much part of the planning process, has limited success. We still don’t know the full impact of that dread event.

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Emergent strategy

Mintzberg considers that detailed plans that look into a long range future and are seen as the basis of strategy are not the way the biggest business successes are achieved. Leaders responsible for deciding the direction in which a company should go are often people of vision with an intuition for what will work, and a feel for what competitors are planning and what is feasible for the company to do. They have a lot of tacit knowledge which enables them to think and act broadly as ideas emerge in the light of what is going on around them. They have a relatively uncluttered view of things, whereas the mass of detail in the conventional plan often throttles the creativity involved in this kind of perspective.

Contrary to much planning wisdom, such leader/managers do involve themselves in understanding the operations of the company and they have networks of information that clarify what is likely to succeed in a given situation. They know their own companies and the core competences which can be built upon. They have a feel for the customers’ wants and they are prepared to take risks to turn their knowledge and sense of what is feasible into reality.

As they gain this sixth sense in specific situations a strategy emerges, not from a plethora of integrated information which outlines the way ahead in scheduled detail, but much as a potter may find a particular pot is not cooperating with the deft fingers of the potter, who finds a different pot emerging out of the process. This is the parable Henry Mintzberg uses in his famous article in the Harvard Business Review (July/August 1987) under the heading Crafting Strategy. (His wife was a potter). To have this sixth sense all the other five must be attuned to emerging opportunities. Rigid planning can so easily deflect the power of the senses and even bury ideas which might have led to brilliant strategies. The Plan becomes the basis of the culture. It is “the way we do things round here”.

Of course strategy does not emerge only from the top. At all levels people are using their five senses to observe the impact of internal decisions and external forces. A sudden Archimedian insight possesses them, and even if they dress first, they rush out to shout “Eureka” to colleagues or bosses. In a favourable climate others will listen and the boss may adopt the idea as part of his overall emerging strategy. In a climate dominated by highly documented, detailed planning, such a person may well be seen as a nuisance or a crank, disturbing the company’s hard won stability with new - fangled schemes.

Throughout the book Mintzberg re-conceives the process by which strategies are created by emphasising informal learning and personal vision and synthesis rather than analysis. Later in the book he offers a six-point model of his pervasive emergent strategy theme. He recognises that it is at the extreme end of a continuum which has deliberate strategy at the other end.

  1. Strategies grow initially like weeds in a garden; they are not cultivated like tomatoes in a hothouse.
  2. These strategies can take root in all kinds of places, virtually anywhere people have the capacity to learn and the resources to support that learning.
  3. Such strategies become organisational when they become collective, that is when the patterns proliferate to pervade the behaviour of the organisation at large.
  4. The process of proliferation may be conscious but need not be; likewise they may be managed, but they need not be.
  5. New strategies, which may be emerging continuously, tend to pervade the organisations during periods of change, which punctuate periods of more integrated continuity - “there’s a time to sow and a time to reap”.
  6. To manage this process is not to preconceive strategies but to recognise their emergence and intervene when appropriate.

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Personal experience

Many readers will know what he is talking about from their own experience. That is the value of Mintzberg’s way of challenging. He, in effect, invites the reader to write some extra sections in the book. I literally did in the margins of the book.

As I grasped his theme it was illuminated for me by a trip down my own memory lane. Although my example is obviously not in his book, it so encapsulates what he is saying that it is not out of place in a summary which aims to enable managers to know what he is writing about and how it might affect their business lives. They will have their own stories to tell.

In the mid 1950's I was a junior manager in the Pit Control section of the National Coal Board’s West Midland’s division in the UK. Our job was to allocate scarce coal to the wholesalers in the domestic and industrial markets. We were rationing agents in a time of shortage.

So acute was the shortage that it was the guiding light behind the work of the Market Planning Department at Headquarters in London. Its Director gave us a talk at a weekend course unravelling some of the mysteries of his very detailed plan. As an exercise we broke into groups to discuss the circumstances under which customers for coal should be recommended to switch to oil for some of their purposes!

A few weeks later in Pit Control, we noticed that instead of our allocating the scarce resource, the customer demand began to reduce and the collieries were beginning the costly process of stocking coal instead of shipping it out. We were later able to identify the Clean Air Act and the rise in the price of supposedly scarce coal as contributory causes. Our national Plan assumed the status quo and, well prepared though it was, it didn’t spot the emerging trend. It wasn’t a matter of inefficiency on the part of British Coal, as it later became known. It had just adhered to the way large companies did things in those early post war days.

When I took early retirement from the post of Head of Management Development, nationally, some years later, I looked back and realised that I had spent at least a third of my career doing things that really didn’t need doing; they didn’t add value. I was often involved in developing plans and budgets which by the time an attempt was made at implementation, were already out of date. The future had moved on as it has a knack of doing! Many people in GE Planning Department must have felt the same when Jack Welch cut out strategic planning, as Mintzberg notes.

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The fundamental fallacies of strategic planning

This is the title of Chapter Five which is the nub of the book. Mintzberg indicates his view of where the underlying philosophy of strategic planning is at fault, illustrating his point, as throughout the book, by a liberal range of quotations from the literature on the subject, from Ansoff to Porter, from George Steiner to Lorange.

The first fallacy exposed is that strategy making can be programmed by use of systems. The implication of this is that strategies are created by systems not by people. It is the managerial equivalent of Frederick Taylor’s scientific management which programmed every physical movement of the workmen. People can’t be trusted. Systems, in contrast, are reliable and consistent. The system does the thinking; intuitive managers are a menace to coherent management. Staff driven planning has “the rational impulse to fight complexity with analysis and stamp out every inconsistency with policies and procedures”.

In 1990 the Head of Planning for Bell and Howell was claiming that the “responsibility of strategic planning” (the abstraction, the system, not people, not even planners)” was to make sure that the entire organisation knows very well what its customer’s requirements are, what is the direction of customer needs and customer requirements, what is the direction in which customer needs and customer expectations are changing, how technology is moving, and how competitors serve their customers”. All that, bound up in thousands of pages of heavily documented sheets of computer printout - a far cry indeed from emergent strategy and from the way in which the world’s most successful business leaders have operated.

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Planning and intuition

Steiner is quoted as saying that “in a fundamental sense, formal strategic planning is an effort to duplicate what goes on in the head of a brilliant intuitive manager”. This duplication takes place by reducing intuition to a series of carefully delineated steps, to be executed in sequential order. Analysis is seen as providing synthesis by pulling into component pieces what to the leader were flashes of insight, born of experience and plenty of listening to well honed networks.

Mintzberg castigates the idea that intuition in the human mind can be recreated in a system as sheer nonsense. We don’t understand how intuition works anyway. He adds:

“Strategy making is an immensely complex process, involving the most sophisticated, subtle, and at times subconscious of human cognitive and social processes. We know that it must draw on all kinds of informational inputs, many of them non-quantifiable and accessible only to strategists who are connected to the details rather than detached from them. We know that the dynamics of the context have repeatedly defied any efforts to force the process into a predetermined schedule or predetermined track. Strategies inevitably exhibit some emergent qualities, and even when largely deliberate, often appear less formally planned than informally visionary. And learning - in the form of fits and starts as well as discoveries based on serendipitous events and the recognition of unexpected patterns - inevitably plays a key role, if not THE key role in the development of strategies that are novel. Accordingly, we know that the process requires insight, creativity and synthesis, the very things that formalisation discourages.”

But for the planners, Taylor-like, thought must be detached from action, strategy from operations, thinking from doing and strategists from what they are strategising about. Virtue is made of this detaching of managers from the daily pressures of running the business, to concentrate on the big thoughts, without the supposed hindrance of knowing too much operational detail, which in fact is the source of many intuitions.

And to leave them in their ivory towers free to think, such information as planners prepare for them must be aggregated and numerical, lest the messy world drags them down into the pressures of every day business life. In other words the planners are making sure that such an idea as emergent strategy does not take hold and ruin the smooth running of the business. (My summaries are reflecting the irony with which Mintzberg laces his writing.)

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The fallacy of predetermination

Almost everything that is written about planning places the accent on accurate forecasting. Because, as we have already commented, the future is, by definition, unknown; even planners do not know where it will be during execution of the plans. They therefore tend to work on the basis of extrapolating from the present with a bit of tweaking here and there. This may work on changes, such as seasonal ones which are regular, but is unsafe ground for dealing with the ad hoc changes which are often the basis of the best opportunities.

Planners reckon to deal with the uncertainty of the future by predicting the level of predictability in their predictions. And remember, too, that if in any instance you get it right, so may your competitors.

An anecdote about a supermarket chief in Canada in the 1950’s, shows how success about the future is really achieved by skilled intuitive leaders, without detailed scientific forecasts. They may create the future, but not after a long process of analysis, by which time someone else has captured the opportunity. Sam Steinberg was offered the chance to bid for a supermarket in Montreal’s first shopping centre. He could see that if he had to bid for supermarkets in each new shopping centre, he would not be able to sustain his required rate of growth. He must control those shopping centres himself. “So, quite suddenly, he launched his business into shopping centres, for the first time entering the capital markets to get the necessary funds.”

The signals for success were weak. Retrospectively it looks obvious. But, asks Mintzberg, “Could any formal system of forecasting have known?” He contrasts this story with a long drawn out series of steps elaborated by Ansoff in 1984 for dealing with weak signals. His typical comment is “It all sounds like those complex formulae mathematicians need to describe how to keep a bicycle upright, something any five year old can do with ease, thank you.” Steinberg’s intuition wasn’t just luck. It was based on a deep understanding of an industry and its context (shopping habits, moves to the suburbs, greater use of motor cars etc.) It would have taken a very complex model to bring it all together. Steinberg had sophisticated broad models in his head, built up over the years.

Of course they don’t always get it right. Thomas J Watson of IBM said in 1948 that he believed there was a world market only for about five computers. A British Foreign office researcher described how year after year, “the worriers and fretters would come to me with awful predictions of the outbreak of war. I denied it each time. I was only wrong twice”!!!!

Mintzberg refers to scenario planning (described in another book summary) and sees some value in this. It obviously worked well for Shell. But you need a number of scenarios to be ready for a good number of eventualities and these are time consuming. Also, inevitably, much of the effort will not be used, particularly as the thing which happens may only in part have been foreseen and planned for in the contingency planning process. The failure of contingency plans is illustrated by the Vietnam War and might be again when the 2004 situation in Iraq has become history. It might turn out to be due to this danger that plans may omit the very things you most needed to be ready for.

Weick suggests that people who “cultivate future adaptability, and sacrifice current adaptation…live in an eternal state of readiness and loneliness and are able to handle everything except the next customer who walks through the door.” Another writer spoke of the Canadian military who planned everything when they had nothing else to do, then scrapped the plans when they had to act.

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The fallacy of detachment

This has already been referred to under the heading of planning and intuition, where planners try to lock up leaders in ivory towers to think without getting their hands dirty and their minds confused with a lot of daily detail. In one company a senior executive asking for information was told by the planners: “You are above the level in this company authorised to have this information”. The chief executive of a world famous consulting company tried to convince a British executive that top level managers should have as little as possible knowledge relative to the product. So long as they had well quantified aggregate figures they would be able to deal with all business matters in a detached and uninhibited way.

Mintzberg asserts that effective strategists are not people who abstract themselves from the daily detail but quite the opposite; they are the ones who immerse themselves in it, while being able to abstract the strategic messages from it. The forest and the trees need to be perceived and indeed the opportunities which may lie underneath the leaves. Much of this could be called soft data derived from the messy world of random noise, gossip, inference, impressions. Planners often see this as a distraction for top and senior management. So they try to turn it into hard data, aggregated to be supplied regularly in digestible form.

Hard data is that which can be documented unambiguously, but it is from ambiguity that opportunity may emerge. But that means direct finding of soft, non-aggregated data, collected by getting out to meet the troops and the customers. Mintzberg summarises the deficiencies of reliance on hard data as follows:

  1. Hard information is often limited in scope, lacking richness and often failing to encompass important non economic and non quantitative factors (eg a single conversation with a disgruntled customer may be more revealing than a major marketing research report; expressions of the face, tones of voice, atmosphere in a factory – all can mean something to a manager, but not to a Management Information System (MIS)).
  2. Much hard information is too aggregated for effective use in strategy making. So much is lost in the process of aggregation. “It’s fine to see forests, so long as nothing is going on among the trees”. Tangible stimuli are needed to trigger action.
  3. Much hard information arrives too late to be of use in strategy making. Time is needed for trends and events and performance to become recorded as facts. Opportunity can be lost while managers wait for data to harden. The example is given of the military commander who needs to know about enemy movements as they take place, and not later on in terms of official statistics. So managers bypass the official planning and go back to hearsay and jungle drums.
  4. A surprising amount of hard information is unreliable. Does publication frequency really indicate the effectiveness of University research? Does an un-categorised number of arrests by the police telling us much about the war on crime? Does the reject count in a factory tell us the true quality situation? Do exam results necessarily tell us about the learning which takes place in a school or college? People statistics are notoriously unreliable; interpretative skill is often needed to know which column to put people data in. Yet it is assumed that wherever there are figures there is precision – an air of scientific rationality.

Equally serious is that planners are divorced from the realities which their figures portray. They are not in touch with that of which they speak, be it competitor analysis or performance reports. They don’t have the tacit knowledge which guides the manager who knows more than he can tell. Planning departments are often staffed by analytical people who lack operating experience. Financial experts, young MBA’s, who have never managed anything, recently hired consultants are unlikely to have the requisite interpretative basis. And in the Planning Department they will not gain the experience they need.

“Strategic learning is an inductive process; it cannot take place in the absence of detailed, intimate knowledge of the situation. Strategic vision cannot be developed by people who deal with little more than words and numbers on pieces of paper.”

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Making strategy

A few more challenging contributions:

“You can’t play tennis by watching the scorecard instead of the ball”

(The Economist, June 11, 1988).

Many of the great strategies are simply great visions, big pictures. But the big picture is not there for the seeing, in three ring binders, MIS reports or financial statements. It must be constructed in fertile minds. And like all big pictures, these are constructed from myriads of little details.

Big things and little things are my job. Middle level arrangements can be delegated. (Konosuke Matsushita). Systems do not think and they can’t make up for the shortcomings of managers who can’t think strategically. Either the leaders must be able to probe deeply into the organisation or else people deep inside the organisation must be able to influence the strategies that are formed. Can society afford to be led by people who set the direction, but do not know the terrain?

Managers and planners seated round a table drawing up lists of strengths and weaknesses may achieve nothing unless the context in which these strengths and weaknesses appear is clear. (Insufficient attention to context explains why sometimes programme participants SWOT analyses are of little value in assessing a company.) The SWOT analysis is situational. “How can we know that a strength is a strength without acting in a specific situation to find out?”

The detachment theme is applied to Levitt’s famous “Marketing Myopia” principle. To say that railways could have reassessed themselves as in the transport industry and therefore could go into air travel seems to Mintzberg to detach aspirations from core competences.

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The fallacy of formalisation

This is another major section of his Chapter Five. In it he elaborates the view that the more complex planning becomes, the less is it likely to help with strategy formation.

Formalisation is at the opposite end to emergent strategy, and the trouble is that it is taken so seriously. Formalisation proceeds through decomposition, in which a process is reduced to a procedure, a series of steps, each of which is specified. The whole is broken down to its component parts. Such programming has its place, but not when you are trying to determine a strategy.

It can consolidate hard information, aggregate it, move it about. But it cannot internalise it, comprehend it, synthesise it. It cannot learn. Human minds are needed for that and they refuse formalisation. It does not deal with the problem of information overload on the human brain. If anything it makes it worse. There is more of it to comprehend, instead of the relative simple things in which intuition deals.

Planning by its very nature defines and preserves categories. Creativity, by its very nature creates new categories and rearranges established ones. Formal planning can neither provide creativity nor deal with it when it emerges by other means. Creativity can’t be put into little boxes; hence the phrase about “thinking outside the box”. Life is larger than our categories.

The analytic thinking of formal planning is convergent, whereas creativity demands divergent thinking, and does not depend on neat frameworks. To think that these formal processes will deliver strategy overlooks the fact that we are substituting mechanics for thought. “People would fill out forms thinking they were doing strategies. It was strategy by cookbook.”

The chapter on the fallacies of strategic planning also links the roles of the two hemispheres of the brain with the two approaches to strategy. The planners are said to have a left side emphasis which concentrates of the rational, logic, language and systematic thought aspects of mental activity. The right side is said to be more attuned to emotion, dreaming, voice tone, movement. It is where intuition is likely to emerge.

This chapter ends:

“Thus we arrive at the planning school’s grand fallacy. Because analysis is not synthesis, strategic planning is not strategy formation. Analysis may precede and support synthesis, by defining the parts which can be combined into wholes. Analysis may follow and elaborate synthesis, by decomposing and formalising its consequences. But analysis can never substitute for synthesis. No amount of elaboration will ever enable formal procedures to forecast discontinuities, to inform managers who are detached from their operations, to create novel strategies. Ultimately the term “strategic planning” has proved to be an oxymoron.”

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Pitfalls of planning

I feel that in taking Chapter Five of the book as the basis for the main part of this summary I was ensuring that readers will have an idea of the principles Mintzberg is seeking to expound. To go back to Chapter Four and look at mere pitfalls is a bit of an anticlimax, but for completeness I will give some idea of what he is saying.

In the actual reading of the book you are being led from a few contentious definitions to the history of strategic planning seen through the lens of the voluminous literature on the subject. It is necessary to have read the earlier chapters to see how the literature on the subject clearly does divide into publications that justify the cook book approach to strategy formation and those of the emergent persuasion.

Then Chapter Four, by dealing with pitfalls of strategic planning, is getting you ready for the tour de force in Chapter Five.

The main pitfalls are the lack of commitment at the top, which is used by some planners as an excuse for their relative failure of their field. Then there is lack of commitment in the company as a whole. Inflexibility is presented as a major pitfall.

“Without a clear strategic framework to define what the organisation wants to be, long range planning is forced to build a composite picture of the organisation by projecting every detail of the business forward…Such effort acts as a deterrent to change; it transforms most long range plans into Gothic structures of inflexibility.”

Mintzberg ranges over the way in which planning is a political tool in a company, a public relations exercise. It symbolises rationality in running the company. The people who see strategic planning as the route to strategy, emphasise that their planning is good, because it is systematic rather than random, efficient rather then wasteful, coordinated rather than helter-skelter, consistent rather than contradictory and above all, rational rather than unreasonable.

But on the whole, as Mintzberg says at the end of this chapter, pitfalls are skin deep compared with the major fallacies, which he goes on to expose as we have seen.

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Some value in planning

Mintzberg had done such a good hatchet job on strategic planning as the key to good strategy that I was ill prepared for his last chapter where to some extent he rehabilitates a kind of planning. It runs to nearly a hundred pages and does not leave one with the clear impression that his central chapters do. He admits that he has been overstating his main theme in order to get attention for it. He does not mean to say that there only two positions; that planning can do everything or nothing. On a continuum he still sees strategic planning at the wrong end. But he admits that so long as it is not trying to create strategy it has value.

He sees it as support for the strategy process in producing the programmes which will enable an already decided strategy to be detailed and implemented.

Some quotations will give somewhat of the flavour of this last chapter, which occupies a quarter of the book spent in finding something useful for the planners to do after he has opposed and ridiculed their work most of the time.

“Organisations engage in formal planning not to create strategies but to programme the strategies they already have, that is to elaborate and operationalise their consequences formally”. “Strategy is not the consequence of planning but the opposite; it is the starting point. Planning helps to translate intended strategies into realised ones, by taking the first step that can lead to effective implementation. We present this not as the first role for planning, but as its only one.”

In the aftermath of the General Electric blitz on their Planning Department, its chief planner could claim in an interview:

“I make a distinction between planning and strategy. They are two different things. Strategy means thinking through a company’s basis of competitive advantage….Planning on the other hand, focuses on making the strategy work – adding capacity for example or increasing the sales force.”

Mintzberg sees the value of some strategic programming, which codifies a given strategy, clarifying and articulating it; it elaborates it into sub strategies, ad hoc programmes and action plans of various kinds; and it converts these sub strategies, programmes and plans into routine budgets and schedules.

There is a lot more that he has to say, but in a summary it would be opening a whole can of worms, because at the end of the day he laces his role for planners with so many ifs and buts that I am not sure how far he takes his ideas of a role for the planners. The above quotes do seem to have some common sense about them, without denying his main theme of strategy forming as not being the role of planners or the planning department.

Reconceived as strategic programming, Mintzberg sees planning as having “an important role to play in an organisation, as do plans and planners when matched with the appropriate contexts. Too much planning may lead us to chaos; but so would too little, and more directly.”

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