Well-managed businesses generally thrive in poor and healthy economies alike. Such visionary organizations have a tendency to change gears in accordance with market demand. They  invest in capacity-building in growth industries and grab technological advantages. They invest in, and continue developing, strong human capital, which can lower turnover and ensure smoother management successions without a blip in leadership.

But all these reasons – and many more – hark back to one key concept: strategic planning. Companies which have integrated the discipline into their cultures fare better than those which don’t, surveys have shown again and again. Yet fewer than 20 percent of the Fortune 100 companies’ CEOs say they have a strong planning component in their organization. My own understanding of its importance came through personal experience as a communications executive at the parent company of Kentucky Fried Chicken Corp. I’ve been tracking, using and studying the need for strategic planning ever since.

In one sense, the economic meltdowns of 2007 and 2008 can be viewed as failures of strategic planning – failure to monitor the external environment in an aggressive and competitive fashion; failure to adapt to changes in the national and global economies; failure to seize opportunities to dominate emerging markets and shrug off losing lines of business quickly enough.

Even the large public corporations with global lines of business have been affected by the current credit crunch and ensuing bear market — and they, presumably, can afford to hire the costly experts or in-house staff who could have prevented such selective vision. What, then, of the cohort generally known to business academics as small- to medium-sized enterprises, or SMEs? How could they manage — even after the fact, to survive and prosper — in a world where the doors of car dealerships, big-box retailers and investment and community banks alike are slamming shut on a daily basis?

Images: Wikimedia Commons.

There are no simple answers, but there is one common thread: both Wall Street and Main Street, not to mention government regulators and watchdogs, were too slow to acknowledge and respond to significant changes in the national and global economies. In our high-technology world, speed is a make-or-break factor. Sometimes, in cyberspace, the difference between profit and loss can be measured in nanoseconds.

At the same time, the strategic mindset as bellwether is far from new: It can be traced at least as far back as the sixth century B.C., when a Chinese military man, Sun Tzu, outlined a series of concepts about warfare that resonate today, thousands of years later. The Art of War is a classic resource in the most distinguished graduate business schools and boardrooms around the globe.

Sun writes of the essential nature of agility: “Speed is the essence of war. Take advantage of the enemy’s unpreparedness; travel by unexpected routes and strike him where he has taken no precautions.”

Both in battle and in business, not merely rapidity but timing in its larger context is the strategist’s greatest ally. The means by which a leader – a “visionary leader,” as some scholars have written – does this is strategic planning: essentially a template for monitoring the internal and external environments and matching strengths with opportunities and overcoming challenges and weaknesses.

For any business leader familiar with the budgeting process, this template is a very compatible companion, and a remarkable advantage in the war for sales and profits. It proved essential at my old company. In 1964, a Connecticut-based purveyor of liquors and pre-mixed cocktails acquired KFC’s quick-service restaurant system, one that the company soon found was in such foul disarray that only an alumnus of that icon of strategic leadership, General Electric, could (and did) save it.

Hicks Waldron, one of the finalists to replace GE’s legendary CEO Reg Jones (Waldron lost out to Jack Welch), was recruited by Heublein and quickly dispatched to Louisville, Ky., to wrench Colonel Sanders’ once-profitable system out of the mire in which its former owners had entrenched it – again, by taking their eyes off the ball and ignoring the strategic planning discipline.
As the communications director for Heublein’s CEO beginning about midway through that process in the 1980s, I witnessed firsthand the extraordinary power of strategic management to align disparate lines of business, eliminate waste and return the operations of the system to the basics – quality, service, value and a host of others. It was a lesson never forgotten and indeed reinforced by subsequent corporate roles in other public companies.

Had the Colonel’s chick, which hatched into a superchicken, been strategically managed much sooner, the course of fast-food history might have been altered. Such is the power of strategy as a bellwether of the impending future.
Both a short-term survival mechanism and a time-tested resource for long-term corporate health, the discipline of strategic planning is one that once was the purview of wealthy multinational public companies but now is available to every organization from real estate brokerages to aerospace equipment manufacturers.

Editor’s note: Contributing Editor Billie Brown is the co-author, with Dr. Bruce Ellis of MIT and Cambridge, of a primer on strategic planning geared for companies of all sizes. The audio book, text and workbook, Strategic Planning: High-Impact Solutions, will be available online in August from Ellis Strategy Group.

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