Summary:

Strategy planning is important but needs to be met with action in the real world if the strategy is to move from fantasy to reality. Dealing with reality requires the ability to cope with the facts instead of ignoring them from a twenty-thousand foot point of view. An example of this is what happened inside the Toyota company. Toyota executives had knowledge of fatal crashes involving their automobiles back in 2007, yet customers had to wait until February 2010 for Toyota to finally announced a full recall of over 8.5 million vehicles.

The problems of fatal crashes in other countries were not immediately important to the executives of Toyota. The planning process involved consensus in Japan rather than consensus worldwide. They were busy too looking at the big picture at a distance to see the detail that mattered.

Article Quote:

“Strategy isn’t always wrong. It can be extremely valuable. Planning doesn’t always fail. And it is certainly necessary. Yet overconfidence in the power of strategic planning has led to financial crisis, to botched and illegal wars, to missed opportunities in business, politics, sports, and life.”

Link: http://www.management-issues.com/2010/2/15/opinion/strategy-is-fantasy–action-is-real.asp

Strategic planning can be considered a fantasy because it looks to an unknown future and makes predictions about how it will unfold. Keeping the focus of the strategic plan on the core business values; in Toyota’s case that would be to design and manufacture dependable cars, will keep your company from trying to be everything to everyone.

Toyota became the largest car manufacturer in the world in 2009, in part because they wanted to make cars and trucks for each class of consumer. By changing the focus from dependability to ‘be everything to everyone’, Toyota’s quality controls were compromised.

Faulty parts were installed in their vehicles and when the fatal crashes were brought to Toyota’s attention, nothing was done to correct the problem. Nothing, until a widely publicized crash in California brought the problem right to Toyota’s front steps.

For more on strategic planning, see http://www.performancesolutionstech.com/category/strategicplanning/