A strategic planner is a staff person who helps line executives in their planning efforts. Thus, there may be a corporate strategic planner working closely with the CEO. A strategic planner may also be attached to an SBU. This section examines the role of a strategic planner at the SBU level. The planner conceptualizes the planning process and helps translate it for line executives who actually do the planning. As part of this function, the planner works out a planning schedule and may develop a planning manual. He or she may also design a variety of forms, charts, and tables that may be used to collect, analyze, and communicate planning-oriented information. The planner may also serve as a trainer in orienting line managers to strategic planning.

The planner generates innovative ways of performing difficult tasks and educates line managers in new techniques and tools needed for an efficient job of strategic planning. The planner also coordinates the efforts of other specialists (i.e., marketing researchers, systems persons, econometricians, environmental monitors, and management scientists) with those of line management. In this role, the planner exposes managers to the newest and most sophisticated concepts and techniques in planning. The planner serves as an adviser to the head of the SBU.

In matters of concern, the SBU head may ask the planner to undertake a study. For example, the SBU head may seek the advice of the SBU strategic planner in deciding whether private branding should be accepted so as to increase market share or whether it should be rejected for eroding the quality image of the brand. Another key role the planner plays is that of evaluator of strategic plans. For example, strategic plans relative to various products/markets are submitted to the SBU head. The latter may ask the planner to develop an evaluation system for products/markets. In addition, the planner may also be asked to express an opinion on strategic issues.

The planner may be involved in integrating different plans. For example, the planner may integrate different product/market plans into an SBU strategic plan. Similarly, an SBU’s plans may be integrated by the corporate strategic planner from the perspectives of the entire corporation. For example, if a company uses the growth rate-relative market share matrix to judge plans submitted by different businesses, the planner may be asked not only to establish the position of these businesses on the matrix but also to furnish a recommendation on such matters as which of two question marks (businesses in the high-growth-rate, low-market-share quadrant of the matrix) should be selected for additional funding. The planner’s recommendation on such strategic issues helps crystallize executive thinking. Matters of a nonroutine nature may be assigned to the planner for study and recommendation. For example, the planner may head a committee to recommend structural changes in the organization. Obviously, the job of strategic planner is not an easy one. The strategic planner must

1. Be well versed in theoretical frameworks relevant to planning and, at the same time, realize their limitations as far as practical applications are concerned.

2. Be capable of making a point with conviction and firmness and, at the same time, be a practical politician who can avoid creating conflict in the organization.

3. Maintain a working alliance with other units in the organization.

4. Command the respect of other executives and managers.

5. Be a salesperson who can help managers accept new and difficult tools and techniques.

In short, a planner needs to be a jack-of-all-trades.

MEASURING STRATEGIC PERFORMANCE

Tracking strategy, or evaluating progress toward established objectives, is an important task in strategy implementation. There are three basic considerations in putting together a performance measurement system: (a) selecting performance measures, (b) setting performance standards, and (c) designing reports. A strategic performance measurement system requires reporting not by profit center or cost center but by SBU. It may require allocation or restatement of financial results based on the new type of reporting center. Most management reporting is geared to SEC (Security and Exchange Commission) and FASB (Financial Accounting Standards Board) requirements and focuses on the bottom line. For many business units, however, profit is not the pertinent measure of a unit’s strategic performance.

In selecting performance measures, only those measures that are relevant to the strategies adopted by each SBU should be chosen. For example, brand building, advertising, and many public relations activities are commonly designed to build long-term value for the brand and the organization. In reality, most marketing expenses are investments. They are investments in customers. Amarketing investment that makes certain customers more loyal can deliver a return by persuading these customers to buy and pay more, by costing less in sales and service, and by referring new customers through existing customers’ visible use of the product or service and their advocacy. Ford estimates that each percentage point gained in carowner loyalty is worth $100 million in profit every year. Further, when setting performance standards, the targets, or expected values, should be established so that they are consistent with both the strategic position of business units and the strategies selected. Finally, reports should focus management attention on key performance measures.

ACHIEVING STRATEGIC PLANNING EFFECTIVENESS As mentioned above, most companies have made significant progress in the last 10 to 15 years in improving their strategic planning capabilities. Clear, concise methods have been developed for analyzing and evaluating market segments, business performance, and pricing and cost structures. Creative, even elegant, methods have been devised for displaying the results of these strategic analyses to top management. Few today would argue the value in theory at least of the strategic approach to business planning. RJR Nabisco’s former CEO, Lou Gerstner (now CEO at IBM), describes that value in the following words: “It is my absolute conviction that you can out-manage your competition by having brilliant strategies.”

17 Unfortunately, RJR Nabisco’s successful experience appears to be more the exception than the rule. Much more typical are reports of dissatisfaction with the results of strategic planning. Why the achievement gap between strategic planning and strategic performance? Reasons undoubtedly will vary from corporation to corporation, but certain ones appear to be critical. First, many companies have found that top-down strategic planning produces resistance on the part of operating managers. Second, strategic planning efforts have failed to encourage innovative ideas and techniques to implement the strategy. Third, even in companies known for excellence in strategic planning, lack of adequate emphasis on marketing has led to poor implementation of strategic plans.

Strategy Implementation and Management Behavior Strategic planning as currently practiced has produced resistance on the part of operating managers. One observer has identified three types of resistance: measurement myopia (i.e., managers behave in ways that show good short-term performance), measurement invalidation (i.e., managers supply top management with distorted or selected biased data), and measurement justification (i.e., managers justify their behavior excessively and become excessively cautious about specific factors identified as critical cash flow or ROI determinants). To solve this resistance problem, it is important to remember that, although sophisticated management tools and the up-to-the-minute techniques of business schools may help identify a desirable strategic course, implementation of a strategy requires time-honored simple and straightforward approaches. As a matter of fact, the latter are still vital prerequisites for success. Experience shows the following specific steps are helpful in effective implementation.

• Benchmark using world standards. Find the world champions in every process you measure, from inventory turns to customer service, and try to exceed them.

• Use process mapping. Break down your organization’s activities to their component parts. Identify the inefficiencies, then redesign each process as if from scratch. For each step, ask whether customers would pay for it if they knew about it.

• Communicate with employees to encourage them to focus on external reality customers and competitors. Define a clear vision that creates a sense of urgency. Help them understand the impact of their own behavior.

• Distinguish what needs to be done from how hard it is to do it. The difficulty of doing is irrelevant; real emphasis should be on what is to be done.

• Set stretch targets. There is nothing wrong with asking employees to perform as well as the best in the world. But don’t tell them how to do it. They will come out with ideas to accomplish what has to be done.

• Never stop. When you get ahead of the pack, don’t relax. That is just when your competitors are getting energized by benchmarking against you.

Effective Innovative Planning Effective strategic planning should eliminate organizational restraints, not multiply them; it should contribute to innovation, not inhibit it. In the coming years, strategic planners face a unique challenge because innovation and new product development must be stimulated within the structure of large, multinational corporate enterprises. A number of companies have proved that innovation and entrepreneurial drive can be institutionalized and fostered by a responsive organizational structure. 3M and IBM, for example, have established technology review boards to ensure that promising product ideas and new technologies receive adequate startup support. Adopting another approach, Dow Chemical has instituted an “innovation department” to streamline technology commercialization. To encourage perpetuation of new ideas and innovation, management should:

1. Focus attention on the goals of strategic planning rather than on process; that is, concentrate on substance, not form.

2. Integrate into its business strategy the analysis of emerging technologies and technology management, consumer trends and demographic shifts, regulatory impact, and global economics.

3. Design totally new planning processes and review standards and acceptance criteria for technological advances and new business “thrusts” that may not conform completely to the current corporate base.

4. Adopt a longer planning horizon to ensure that a promising business or technological development will not be cut off prematurely.

5. Ensure that overly stringent financial requirements aren’t imposed during the start-up phase of a promising project.

6. Create special organizational “satellites,” such as new venture groups, whose mission is to pursue new ideas free from the pressures of day-to-day operations.

7. Institute financial and career reward systems that encourage bold, innovative development programs.

STRATEGIC PLANNING AND MARKETING ORGANIZATION Strategic planning deals with the relationship of the organization to its environment and thus relates to all areas of a business. Among all these areas, however, marketing is the most susceptible to outside influences. Thus, marketing concerns are pivotal to strategic planning. Initially, however, the role of marketing in the organization declined with the advent of strategic planning. As Kotler noted in 1978: Strategic planning threatens to demote marketing from a strategic to an operational function. Instead of marketing being in the driver’s seat, strategic planning has moved into the driver’s seat. Marketing has moved into the passenger seat and in some companies into the back seat. It has generally been believed that the only marketing decision that has strategic content is the one concerned with product/market perspectives.

As far as other marketing decisions are concerned, they are mainly operational in nature; that is, they deal with short-term performance, although they may occasionally have strategic marketing significance. Product/market decisions, however, being the most far-reaching in nature as far as strategy is concerned, are frequently made by top management; the marketing organization is relegated to making operating decisions. In brief, the inroads of strategic planning have tended to lower marketing’s status in the organization. Many marketers have opined that marketing would continue to be important, but mainly for day-to-day operations. For example, Kotler predicted that

1. The marketer’s job would be harder than ever in the 1980s because of the tough environment.

2. The strategic planner would provide the directive force to the company’s growth, not the marketer.

3. The marketer would be relied on to contribute a great deal of data and appraisal of corporate purposes, objectives and goals, growth decisions, and portfolio decisions.

4. The marketer would assume more of an operational and less of a strategic role in the company.

5. The marketer would still need to champion the customer concept because companies tend to forget it.

Experience has shown, however, that marketing definitely has an important strategic role to play. How neglect of marketing can affect strategy implementation and performance can be illustrated by Atari’s problems. This company had been a pioneer in developing video games. Because of negligence in marketing, however, Atari failed to realize how quickly the market for video games would mature. Atari based earnings projections on the assumption that demand would grow at the same rate as in the past and that the company would hold its share of the market. But its assumption proved to be wrong. The market for video games grew at a much lower rate than anticipated. Continuous close contact with the marketplace is an important prerequisite to excellent performance that no firm can ignore: Stay close to the customer. No company, high tech or low, can afford to ignore it. Successful companies always ask what the customer needs. Even if they have strong technology, they do their marketing homework.

More businesses today than during the establishment years of strategic planning are making organizational arrangements to bring in marketing perspectives an understandable development because, with the emergence of strategic planning (particularly in organizations that have adopted the SBU concept), marketing has become a more pervasive function. Thus, although marketing positions at the corporate level may have vanished, the marketing function still plays a key strategic role at the SBU level. Businesses, by and large, have recognized that an important link is missing in their strategic planning processes: inadequate attention to marketing. Without properly relating the strategic planning effort to marketing, the whole process tends to become static. Business exists in a dynamic setting. It is only through marketing inputs that perspectives of changing social, economic, political, and technological environments can be brought into the strategic planning process. Overall, marketing is once again assuming prominence. Businesses are finding that marketing is not just an operations function relevant to day-to-day decision making. It has strategic content as well.

As has been mentioned before, strategic planning emerged largely as an outgrowth of the budgeting and financial planning process, which demoted marketing to a secondary role. However, things are different now. In some companies, of course, concern with broad strategy considerations has long forced routine, highlevel attention to issues closely related to markets and marketing. There is abundant evidence, however, of renewed emphasis on such issues on the part of senior management and hence of staff planners in a growing number of other companies as well. Moreover, both marketers and planners are drawing increasingly from the same growing body of analytical techniques for futurist studies, market forecasts, competitive appraisals, and the like. Such overlapping in orientation, resources, and methods no doubt helps to reinstate the crucial importance of marketing in the strategic planning effort. Accumulating forces have caused most firms to reassess their marketing perspectives at both the corporate and the SBU level. Although initially marketing got lost in the midst of the emphasis on strategic planning, now the role of marketing is better understood and is reemerging in the form of strategic marketing. The decade of the 1990s will indeed be considered as a period of marketing renaissance.

The article examined five dimensions of strategy implementation and control: creation of a market-responsive organization, the role of systems in implementing strategy, executive reward systems, leadership style, and measurement of strategic performance. It is not enough for an organization to develop a sound strategy. It must, at the same time, structure the organization in a manner that ensures the implementation of the strategy. This article examined how to accomplish this task, that is, to match organizational structure to strategy. Inasmuch as strategic planning is a recent activity in most corporations, no basic principles have been developed on the subject. As a matter of fact, limited academic research has been reported in this area. However, it is clear that one fundamental aspect that deeply impacts strategy implementation is the proper linking of organization, systems, and compensation. This article examined how to ensure maximum market responsiveness, how to fully exploit management systems as a strategic tool, and how to tie the reward system to the strategic mission.

Strategy implementation requires establishing an appropriate climate in the organization. The CEO plays a key role in adapting the organization for strategic planning. Also examined was the role of the strategic planner in the context of strategic planning and its implementation. Many companies have not been satisfied with their strategic planning experiences. Three reasons were given for the gap between strategic planning and strategic performance: (a) resistance on the part of operating managers, (b) lack of emphasis on innovations, and (c) neglect of marketing. Suggestions were made for eliminating dysfunctional behavior among managers and for improving innovation planning.

As far as the strategic role of marketing is concerned, with the advent of strategic planning, marketing appears to have lost ground. Lately, however, marketing is reemerging as an important force in strategy formulation and implementation.