The Problem With Planning As It Exists Today
When done well, strategy planning can create a real competitive advantage. However corporate executives, business unit leaders and dedicated planning managers, know all too well that strategic planning does not typically drive a company's critical decision making process.
A recent survey by the McKinsey Global Institute on Strategic Planning revealed that a mere 23% of a company's important strategic decisions are made within the recognised strategic planning process. In other words, nearly 80% of a company's most important decisions are made either by the CEO or by small groups of senior executives, outside the formal process.
The concern is what this can lead to. In the McKinsey survey, corporate executives reported a number of startling statistics that expose the problem with planning as it exists today:
- 17% of the capital invested by their companies went towards underperforming investments that should have been terminated.
- 16% of their investments were a mistake to have been financed in the first place.
- 21% of capital should have been approved but was not hampering future profitable growth.
