LEARN TO LEAD - Civil Air Patrol

themselves on the realism of their financial objectives,while middle management congratulates itself on its skillin planning to meet those objectives. Planning againstobjectives that are unconnected to a larger strategy maylead to self-satisfaction; in time, however, it may very welllead to a dead-end future.3. Since long-range planning consists of a series of projectionsabout the future, the future picture of the organization canonly be a composite of these projections. Under this approach,the plans companies make determine their direction insteadof providing a clear sense of direction determiningtheir plans. Long-range plans are built up from the lowestlevels, where information exists to make projections.These projections are additive for the various parts of theorganization and, in total, tend to become the recommendedplan. But by the time these detailed plans reachthe top, there is virtually no opportunity for interjectingfresh insight about the future. In fact, top management’sability to modify these plans, except in minor ways, ispractically nil. Flexibility vanishes. The comment of onechief executive immersed in the planning cycle is typical:“By the time we get through with our long-range planningcycle, we are all so engrossed in the precision of ourprojections that we have lost our ability to questionwhether they are taking us where we want to go.”4. Long-range plans invariably tend to be overly optimistic.This results primarily from the desire of those making theprojections at various levels of the organization to do betterin their respective areas in the years ahead. By thetime this optimism reaches top management, every unitpredicts it will do 15 percent better in the years ahead.Such projections tend to become the prevailing corporatewisdom, further restricting the ability of top managementto make changes. Any changes that are not purely perfunctoryappear arbitrary and capricious to the rest of theorganization. Since the allocation of resources is tied tothese basically optimistic plans, the persuasiveness ofstrong personalities and the unrealistic goals they guaranteeto reach often determine future resource allocation.5. Long-range planning usually begins with assumptionsabout the environment – the economy, technologicalchange, sociopolitical events, and so on – and the organization’sstrengths and weaknesses. Though this informationcould have great strategic significance, long-range planningtends to utilize such data only as a guide for determininghow optimistic or pessimistic to make thelong-range product/market projections. This is so becauselong-range planning is not a process that enablescritical information to be used for strategic purposes.6. Long-range plans tend to be inflexible (even though theyare usually presented in three-ring binders as evidence oftheir “flexibility”). It takes a tremendous amount of workto project five years ahead; such effort acts as a deterrentto change and transforms most long-range plans intoGothic structures of inflexibility. This inflexibility makesit difficult to react to unanticipated changes int the environmentand to adjust plans accordingly. Modification oflong-range plans usually occurs only when events reachcrisis proportions.7. Long-range planning is more short-range than anyone reallycares to admit. To be sure, long-range planning theorysuggests that planning should project out five years andthen recede back to one year out. But how can this bedone in the absence of a framework for looking ahead fiveyears? Without such a structure, the sheer force of necessityleads most managers to reverse the theory and beginby projecting from year one, but beyond that point projectsbecome iffy. Since so much work is involved, the firstyear usually gets the most thorough analysis. After all, themanager knows he can make changes in the followingyears; it is only the coming year that cannot be changed –and this year becomes the budget. The shorter the timefocus, the more easily a manager is locked in to the constraintsof current operations, and the less likely he is tobe influenced by information of potential strategic significance.Anyway, most rewards for performance are measuredby only first year results.CHECK YOUR STRATEGYIn summary, strategic thinking is in trouble. Operationallong-range planning is no longer adequate to copewith the complexities of today’s world.How is your organization doing? Ask yourself thesequestions:• Are your product-market policies and decisions toofrequently a reaction to outside influences such as thegovernment, competition, unions, and other outside factors?• Are acquisition and investment opportunities settingthe direction of your company?• Is the way you are currently organized determiningwhat your company will be doing in the future?• Do your annual budgets determine what your companywill be in the future?• Do your long-range projections establish the kind ofcompany you will be in the future?• Do you lack a systematic method to anticipate changesin the environment that may impact your company?• Do you actually generate assumptions about the environment,but use them for projecting and assessing plansinstead of as an input to formulate strategy?• Is the persuasive manager – the one who is getting29