The Real Value of Strategic Thinking, (2003) published in Sloan Management Review proposes the idea that few strategic decisions are made in the context of a formal process because a company’s most important strategic decisions are made as developments unfold.The authors contend that companies that achieve success use strategic planning not to generate strategic plans but as a learning tool to create a preparedness within an organization to make strategic decisions as the need arises. According to authors Kaplan and Beinhocker, the goal of the strategic planning process should be to make sure that the key decision makers “ have a solid understanding of the business, share a common fact base, and agree on the important assumptions” (p.8). When managers have this foundation, good strategic decisions can be made throughout the year.
The authors argue that the utility of the strategic planning process is really whether the participants are better prepared for the real-time job of strategic decision making. A number of real-world examples are presented in which companies were presented with opportunities for growth through acquisitions that were not anticipated. Understanding their business, armed with a common fact base and agreement on important assumptions prepared the executives to make sound strategic decisions that in retrospect, were the correct ones.
The conclusion drawn in the article is that strategic planning for the sake of preparing plans is unjustified and leaves managers unprepared to make sound decisions as the need occurs. By repositioning strategic planning as a learning process, formal strategic planning will prepare managers to make better strategic decisions.