Risk Commentary

You must have the best organizational planning practice you can muster to complement your Enterprise Risk Management regime! Was Mintzberg right in saying Strategic Planning was dead? We continue our discussion of strategic planning best practices, supported by research.

Show Notes

SHOW NOTES

Main points              

Last episode we started with an examination of the planning regime, as the first step in High Quality Risk Assessment.
I mentioned that an 80/20 rule seems to obtain, 80% of our efforts as risk managers is properly spent on fixing the quality and extent of the planning. For that reason, we expand that discussion today.

We set out steps in a planning process to help you assess and fix how planning is approached in your organization. 

Recall:
- What is the evolutionary stage of the organization?
- self-identification - Strategic Identity
- environmental scan - the outward view
- formulation of goals and objectives 

Let’s situate our organizational practices in a wider planning and management schema. As explained, good planning is the necessary condition for effective risk management.

But, pausing for a moment to take a wider view, these questions naturally arise: are there not hundreds of different types of planning and management techniques? How are they inter-related?

Planning and management schema 
- an attempt at a comprehensive listing
- purpose: to relate various management practices to one another in a logical order
- to use as a reference to compare and make changes to your own organization
- don’t forget all the wasted time in meetings
- is there potential for meaningful organizational change?

Is strategic planning dead?
- common attitudes: planning
- strategic planning is popular; yet somehow mysterious and ineffective (kinda sounds like ERM!)
- Mintzberg’s article “The Rise and Fall of Strategic Planning“
- his true complaint: not predictive; focused on quantitative targets; not participatory
- quote from Wall & Wall article: better characterization of strategic planning

Recommended practices
Subsequent research: Effective strategic planning is:
 
· an iterative process; participatory, involving dialogue and exchange between planners and the rest of the employee group
· well-informed by detection of trends, conditions and emergent issues; it has to stay relevant in order to arrive at creative and innovative solutions, rather than simply state a static target based on last year’s results
· helps promote an integrated culture, and a sense of belonging to the firm, based on common values

- examples and quotes from a few sources (cited in the show notes):
- business failure studies - yup, we do need planning!
- elements of strategic planning
- benefits of strategic planning, including psychological benefits and improvement of morale
- highlight on implementation
- lists of criteria are useful for risk assessment!

Conclusions
What is the best definition Strategic Planning? 
What is the rationale for Strategic Planning?
Does this imply an extraordinary amount of work?

Summary: What did we cover today?
1. We reiterated that to begin High Quality Risk Assessment (our core practice in ERM), we must review the planning practice. 
2. We reviewed the steps in a suggested planning process (discussed in more detail in Ep 5).
3. We situated strategic planning and many other techniques in a sort of grand schema.
4. Rationalize planning, meetings and management techniques: there is potential for meaningful change
5. We discussed the reason for negative impressions of planning.
6. We cited examples from the literature to show the best practices.
7. We finished with a recommended definition of Strategic Planning and its ultimate rationale.

KEY QUOTE
“Traditional planning fails to take into account the creative processes and discoveries that generate breakthroughs.” (article ~ Wall, S. and Wall ,S.R.)

LINKS 
Aldehayyat J & Anchor J (2010) “Strategic Planning Implementation and Creation of Value in the Firm” 
Wall, S. & Wall, S R (1995) “The Evolution (Not the Death) of Strategy” 
E. Robertson Strategic Planning: Process, Templates and Effective Implementation (2019)

What is Risk Commentary?

We see a striking contradiction in all businesses: the sharply increasing need for Enterprise Risk Management, as opposed to risk managers' persistent reports of low perceived value of their own processes. Correctly implemented, High Quality Risk Assessment will not only address uncertainty, but even solve chronic business problems. Join Edward Robertson, successful ERM practitioner and thought leader, to discover a simple process that delivers clear value.