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CONFIDENTIAL
WORK IN PROGRESS
STRATEGIC PLANNING:
BEST PRACTICES AND
BEYOND
Eric Beinhocker - DC
Sarah Kaplan - NY
Client workshop document (release 2.0)
Revised March 1999
This report is solely for the use of client personnel. No part of it may be
circulated, quoted, or reproduced for distribution outside the client
organization without prior written approval from McKinsey & Company.
This material was used by McKinsey & Company during an oral
presentation; it is not a complete record of the discussion.
TODAY’S DISCUSSION
• Background
• Key findings from best practices
• Reinventing strategic planning
• Organizing to do strategic planning
• How to get started
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1
WHAT DO WE MEAN BY STRATEGIC PLANNING?
Strategy is
The handful of decisions that…
• Largely or entirely drive most of the subsequent decisions
and actions of the firm
• Have the greatest impact on whether the firm’s objectives
will be achieved
Strategic planning is the process by which those
decisions get made, whether
• Formally
• Informally
• Top down
• Bottom up
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2
MANY COMPANIES HAVE ISSUES WITH
THEIR STRATEGIC PLANNING PROCESSES
• Formal processes are time consuming with little value added
− Few good ideas emerge
− Paper and numbers driven
− More tactical than truly strategic
• Informal processes very ad hoc
− More reactive than proactive and shaping
− Insufficiently fact based
− Poor institutional learning
• Poor linkages to other processes
(budgeting, people, performance management, capital)
• Lack of clarity on roles (corporate center, business units, groups)
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3
PLANNING HAS GONE THROUGH 3 ERAS
1990’s - 2000
Loose-tight approach
1970’s
Central planning
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1980’s
Planning is dead, let 1000
flowers bloom
4
MCKINSEY IS RESEARCHING PLANNING FROM 3 ANGLES
Best practice cases
•...