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Its Purpose
Its
Purpose Overview
Where
Planning Works
Where
Planning Doesn't Work
What Does Work
and Why
Competition and Production
The
Information Problem
Where Planning Doesn't Work
 In
dynamic,
external environments, planning doesn't work because information about the future is limited
(more about that here), people are
competing, the critical resources are
contested, and key decisions are outside of the control of existing agreements. In these external competitive
environments, what you need is not better planning but the powerful toolkit of
front-line strategy.
The larger environment, in business or
otherwise, is outside our direct control. People want to cooperate with their customers, but
to do so they must take into account the opportunities offered by their
competitors. Our information about what is happening and possible in the
competitive environment is limited.
People want to get
along, but they also want to get ahead. They all
have different priorities. Known resources are always both
limited and contested. The nature and value of resources continually change
with the unpredictable changes in human knowledge.
People battle against nature to make more
resources available.
Sometimes the battle is to discover knowledge that unlocks new potential
resources. The most important resource, the potential locked within each of us,
is the most mysterious of all.
Different people have different ideas about which
choices are best.
Since we cannot
agree, competition over resources is not only
unavoidable but necessary. Only competition can resolve the question about
who uses what resources the most productively. In economic contests, the winners are
determined by the marketplace, where people invest
their own hard-earned dollars on what they
think is valuable. Non-economic competitive
environments have other ways of determining the winners and losers, but every
competitive arena determines who is the best at choosing resources and employing them.
Success in this competitive process does not come
from planning alone. Everyone in the contest "plans" for success. In these chaotic
environments, a series of predetermined steps leading to a predictable result is
simply impossible. Competitive plans collide, producing results that no one can
plan. Since the contest is ongoing and past winners continue winning—at least
for awhile—we have the illusion of control and predictability where none
exists. Over time, past winners fall and new winners arise in unexpected ways.
People can plan in these
environments, but, as the saying goes, our plans do not survive first contact with
the enemy. Good front-line strategy starts with the humble acceptance
that competitive
environments are outside our control. Any competitive arena—the marketplace, the job market,
or a sports arena—is defined by complex, unpredictable dynamics.
Competitive environments are both much larger and much more complex
than controlled environments. Many players are unknown. Individuals and groups behave in
unpredictable ways. Where plans exist, they are not shared. Competitors actively mislead
each other about their plans. People often act on an impulse, reacting to
fast-changing conditions. People don't know what they are going to do, much less
share their plans with others. The competitive environment is a puzzle that
reshapes itself continuously.
You can practice or
rehearse the execution of specific strategic moves and responses
beforehand as part of the planning process, but when this "playbook" of
moves is taken to the front lines, success depends upon
instantly selecting the appropriate moves and responses for the specific
situation.
If planning doesn't work in these environments,
what does? Read on...
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