Planning for a volatile world
Put aside the illusion of control, advises consultant
It wasn’t a 3am, lightbulb moment that set Steve McCrone on a different path. It was more a dawning realisation that the theories he’d been taught at university — and was espousing each day to business leaders as a management consultant — weren’t taking account of the whirlwind of change and complexity shaping today’s business environment.
Based on setting objectives, the plans he helped write laid out a linear path to achieving strategic goals.
“You were drafting a strategic plan for an organisation using a traditional framework and you’d go back and see the client three, six months later and say ‘How was the plan? How was the strategy?’ and they would literally search for it in a bookcase somewhere.
“They’d obviously only ever read it once.
“I guess it had value but that value was no more than the executive summary.
“You ask them ‘how many people actually read it’ and it would be a handful.
“Do the operational staff actually understand it? The real answer is no.”
What amazed him was that most clients were happy to pay to get him back and repeat the work.
McCrone, 43, says he began to feel like a snake oil salesman, at best getting a business a small improvement for a short period.
“It’s very comfortable to think you can control your strategic environment through a planning process,” he says. “Literally, you can’t do it. “Once they make that realisation, they start to operate in more authentic manner.
“It’s the illusion of control that is the battle.”
Taking a step-by-step path to a goal is fine in some circumstances — working out how to build a structure based on a design blueprint — but it can’t be translated to a setting typified by volatility and uncertainty, he says.
“If you take a linear planning approach to an uncertain environment, you’re effectively setting yourself up for failure.
“People intuitively know that and that’s why the strategic plan goes in the bookcase and they just get on with it.
“Businesses literally couldn’t operate if they just followed their strategic plan, so where’s the value of that document?”
Today, McCrone leans heavily on the Cynefin Framework, developed by former IBM executive Dave Snowden, for his model of identifying and implementing the appropriate strategy for different business environments.
He says he has sometimes felt like a voice in the wilderness, particularly when he was only in his early 30s and began pushing back against traditional theories.
“A lot of people found the idea of me saying ‘Look, this approach you’ve used for the past 10 years isn’t working, why don’t you try something different?’ quite confronting — and they still do.”
McCrone says he tested his methodology “in the line of fire” for engineering firm Hawkins, after the Christchurch earthquakes.
The army analogy is no accident, although his brush with the military wasn’t exactly premeditated.
McCrone joined the army on a whim at the end of his commerce degree, having ducked into the recruitment office on a wet Dunedin day, hoping to kill some time until the rain eased up.
He spent six years, based mainly in Waiouru, working initially in logistics before becoming an ammunitions technical officer responsible for disposing of unexploded ordnance and unsafe or obsolete ammunition.
“I had a lot of fun blowing things up in the desert and once I saw I was moving back into a more deskbound ammunition logistics job, then I lost interest, to be honest.”
He says the army likes to pretend it does linear planning but in reality the phrase “no plan survives the first shot” is true.
What he did learn from the military was tempo.
Plans are tested and adjusted at a very fast rate — something that can be carried over to business, he says.
“The speed of that circle matters, not whether or not you get it right.”
But at what point does agility become muddling along?
McCrone says there is a big risk of that. “One of the things that you need in a strategically agile environment is a relax on constraints around resources.
“If you do that to the point where people are just working on their pet projects or working on crazy ideas or going on a golden goose chase, then you lose momentum, you lose focus and you waste a lot of time and effort.
“On the other end of that scale, if you get overly analytical you lose momentum, you lose focus and you waste resources.
“You’ll see the same conditions and if all you’re looking at is the financial performance of the business, often you can’t tell which one of those places you are — it looks like the same thing — which is dangerous because people will retreat back to what they know, which is more analysis.”
It’s a method of operating, not a big plan, he says.
“You can still do goal setting, you’ve still got this end state in mind, it’s just that you’re not over-describing the trajectory.”