Planning

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

•...