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Does Strategic Planning Matter?

Mallon, William T. EdD

doi: 10.1097/ACM.0000000000002848
Invited Commentaries
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In this Invited Commentary, the author examines the history, use, and effectiveness of strategic planning in higher education, academic medicine, and nonprofit settings. Strategic planning is a process by which an organization differentiates itself from its direct or emergent competition to achieve its mission. This form of planning is distinct from operational planning, in which an organization identifies the ways in which it will continuously improve. Many organizations employ a combination of strategic planning and operational planning but use the former term to describe their planning process without a clear definition or conceptual framework.

The empirical literature across disciplines has not demonstrated that strategic planning leads to positive organizational outcomes. Over the modern history of academic medicine in the United States, strategic planning may have had limited impact on organizational outcomes because of favorable environmental circumstances that catalyzed growth and innovation regardless of planning efforts. In the current environment, organizational and departmental leaders need to define trade-offs between the various opportunities that they confront; allow for both planned and emergent strategy formulation; avoid platitudes and fluff; and focus on operational excellence.

Theories from anthropology suggest that strategic plans may be more important for what they express than what they produce. Repetition of the themes and language of strategy in formal and informal discourse can have a decisive effect on the culture of the organization. Strategic planning, therefore, matters for its effect on organizational values, rituals, and ability to move the organization in new directions.

W.T. Mallon is senior director, Strategy and Innovation Development, Association of American Medical Colleges, Washington, DC.

Editor’s Note: This is an Invited Commentary on Byrne N, Cole DC, Woods N, et al. Strategic planning in health professions education: Scholarship or management?

Funding/Support: None reported.

Other disclosures: None reported.

Ethical approval: Reported as not applicable.

Correspondence should be addressed to William T. Mallon, Association of American Medical Colleges, 655 K St., N.W., Suite 100, Washington, DC 20001; telephone: (202) 828-0424; email: wmallon@aamc.org.

I’m putting you on the strategic planning team. It’s like work but without the satisfaction of accomplishing anything.

—The Boss to Dilbert; Scott Adams, Dilbert1

What is it about strategic planning that has inspired such cynicism in the professional literature, the academic quad, and the funny pages? A debate persists in the peer-reviewed literature about whether strategic planning leads to improved organizational outcomes. Commentators issue warnings about “the perils of bad strategy”2; practitioners ask if “strategic planning [is] relevant anymore”3; and faculty flat-out assert that the strategic plan is “neither strategy nor plan, but a waste of time.”4 The Boss’s description of strategic planning from Dilbert, above, is funny because it may be closer to the truth than we would like to admit.

For more than 25 years, I have been a participant, facilitator, consultant, scholar, and leader of strategy development and strategic planning efforts in higher education, academic medicine, and nonprofit organizations. In these roles, I have encountered a fair amount of cynicism about strategic planning among faculty, staff, and other stakeholders, with many people questioning whether strategic planning matters. While I do not share that cynicism, as both a practitioner and researcher of organizational behavior and change, I have developed a healthy skepticism for what strategic planning achieves and a deep appreciation for what it means.

In this Invited Commentary, I begin with a conceptual framework to differentiate among different types of planning efforts and then offer 5 observations about strategic planning in the higher education, academic medicine, and nonprofit arenas. These observations apply to the academic environment in particular; they may or may not resonate with the clinical enterprise, which in many markets has a stronger need for competitive differentiation.

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“Strategic Planning” Versus “Planning”

Before we can examine whether strategic planning matters, we need to define the term. Too often, “strategic planning” is used as a catchall phrase without a common definition. When does an organization’s plan for the future become a strategic plan?

History shows that strategy, from its ancient militaristic origins to its 20th-century business application (from which higher education’s version of strategic planning developed), is predicated on competition. That is, strategy is focused on gaining advantage over one’s competitors—even in nonprofit settings, where direct competition still exists but may not be as apparent. “Strategic planning,” therefore, is the process whereby an organization identifies how it will differentiate itself from its competition to achieve its mission—whether that competition is a nearby hospital system, a national competitor for student or faculty talent, or a nascent competitive threat on the horizon.

Many organizations, however, hold a less specific, implicit definition of “strategic planning” that is akin to “ongoing planning”—a process whereby an organization establishes short- and long-term goals for improvement and measures progress toward achieving those improvements. While laudable (and mandatory for medical schools accredited by the Liaison Committee on Medical Education [LCME]5), such operational planning does not necessarily earn the “strategic” moniker. Organizational plans may be a combination of strategic planning (“How will the organization be different in response to external threats and compared with our competition?”) and operational planning (“How will the organization continuously be better to improve outcomes?”).

Operational planning is important. But it is not the same as strategic planning.

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Strategic Planning Has Not Mattered Much

The genesis of strategic planning in higher education stems from a meeting of university facility planners held at the Massachusetts Institute of Technology in 1959.6 It really took off in the 1980s, with groundbreaking books about strategic planning in the public sector and in higher education.7–9 Since those early days, universities, medical schools, and academic health centers have employed strategic planning techniques such as environmental scanning, SWOT (strengths, weaknesses, opportunities, and threats) analyses, program and product road maps, scenario planning, forecasting, and balanced scorecards, among other research-generated, consultant-sold, or home-grown tools and techniques. Most strategic planning efforts tend to follow a familiar process—such as the one that Byrne and colleagues describe in their article in this issue of Academic Medicine.10

Strategic planning has been studied extensively by researchers in diverse disciplines such as anthropology, public administration, management, decision sciences, and education, using quantitative, qualitative, and mixed methods. Meta-analyses have found positive relationships between strategic planning and organizational performance11–13; however, studies on strategic planning have been criticized for conflating correlation with causation.14 That is, strategic planning may not make a difference to organizational performance; rather, positive outcomes may be attributable to other factors, such as favorable external factors, competent leaders who know how to effectively manage organizations, and even luck. But we cannot say that strategic planning in and of itself causes strong performance. Ergo, does strategic planning matter—really?

Beyond the empirical evidence is the historical context of medical schools and teaching hospitals in the United States. In the long view, strategic planning has not mattered much for academic medicine as an industry: Since the 1960s, tremendous growth has created enough slack in the system that academic health centers have, in effect, not needed to make choices or trade-offs regarding one strategy versus another. They have been able to balance growth portfolios in all their mission areas. While there is and has been variation across the community, with some medical schools being disciplined and others facing significant crises that required dire strategic choices, academic medicine as an industry has been enormously successful being many things to many people.

Suffice it to say that unbridled growth has, if not disappeared, at least become more volatile. And the traditional funding sources for the tripartite missions have been under duress. Most academic health centers can no longer ignore the need for a true strategy—that is, making choices about what to do and what not to do to fulfill the institution’s reason for existence.15 This concept of strategy emphasizes choosing some things but not others and, therefore, involves a simple yet difficult word: “No.”

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Strategy Needs Leadership No-How

Leaders are critical because they are the ones who can say “no.”

This no-how surely is needed under difficult financial circumstances, but not only then. Even if an organization’s balance sheet is healthy, even when there are many opportunities for innovation and investment, no organization can pursue every opportunity.

Leaders define the trade-offs for the organization—meaning that “more of one thing necessitates less of another.”16 This is not to suggest a zero-sum game. Rather, by choosing to invest in, say, one area of clinical or research expertise but not another, leaders make organizational priorities clear. Organizations that try to be all things to everyone (patients, students, residents, faculty, staff, the public) risk diffusion of effort, budgetary and human resources, and even messaging. Trade-offs “purposefully limit what the [organization] offers.”16

That’s easier said than done. The reality of organizational life works against making choices about what to do and not do (i.e., having a strategy). As Porter states, trade-offs can be frightening.16 Who wants to make the wrong choice? We do not want to disappoint faculty, staff, and leaders. We want to minimize conflict. We want to avoid a dustup with an influential department or faculty member that escalates into bad press—or a pink slip.

In the face of these inclinations, perhaps the most important word that organizational and departmental leaders can assert in the successful development and implementation of strategy is “no.”

Leaders need to ask themselves whether the thing that they call the “strategic plan” for their organization or department is uniquely focused on trade-offs between various pathways they could take to achieve their mission or focused on goals that are important and laudable for any high-performing organization. If you could take a goal and easily drop it into the strategic plan of an organization in another industry, you are probably working on an operational plan, not a strategic plan.

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Planned or Emergent Strategy?

Most approaches to strategy and strategic planning have an implicit point of view of organizational rationality—one that emphasizes hierarchy, rational decision making, cost–benefit analyses, and planned interventions. What Mintzberg pointed out in 1987 is still true today: “Virtually everything that has been written about strategy making depicts it as a deliberate process. First we think, then we act. We formulate, then we implement.”17

Mintzberg argued that strategy can form as well as be formulated. It can and should emerge in response to evolving situations. Smart leaders “appreciate that they cannot always be smart enough to think through everything in advance.”17

Should strategy be planned or should it emerge? I’m a pragmatist, not a purist. I like a hybrid approach, the type of strategy development summarized by Hamel: “Strategy is poised on the border between perfect order and total chaos, between absolute efficiency and blind experimentation, between autocracy and complete adhocracy.”18 If Hamel’s description doesn’t sound like an academic medical center, I don’t know what does.

Medical schools and teaching hospitals are particularly well suited to this hybrid approach, in which strategy development is neither fully planned nor fully emergent. Strategic planning is both top-down and decentralized; rational and symbolic; and deliberate and emergent.

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What About Fluff?

Strategic plans have been criticized for their “fluff,” or “restatement of the obvious, combined with a generous sprinkling of buzzwords that masquerade as expertise.”2 Organizations across industries are prone to fluff, academe included. One well-known university stated that its strategic goals were to “epitomize the scholar–teacher ideal,” “provide an unsurpassed education and experience,” “demonstrate distinction in graduate and professional studies,” and “engage in the great ideas and issues of our time.”19 In other words, this university’s transformational goals were to be a university. A related criticism of traditional strategic plans is that their goals do not facilitate difficult trade-offs but, rather, constitute “a scrambled mess of things to accomplish. . . . A long list of things to do, often mislabeled as strategies or objectives, is not a strategy. It is just a list of things to do.”2

Thus, the list of things to do, aka the strategic plan, has been criticized for gathering dust on a shelf.20 Even organizations that employ dynamic, nimble, and shorter-span planning approaches sometimes spend too much time coming up with a strategy and not enough time implementing one. Mintzberg proffered:

Most of the time, [leaders] should not be formulating strategy at all; they should be getting on with making their organizations as effective as possible in pursuing the strategies they already have. . . . Organizations become distinguished because they master the details.17

Mintzberg was not arguing for sticking with a strategy that is not working. Rather, an organization should fully implement the strategy it already has when the environmental circumstances indicate it remains valid.

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Strategy as Culture

But let us dwell for a moment on those strategic plans stored on your shelf. Is strategic planning nothing more than a ritualized process, “full of storm and fury, signifying nothing”?21 Just “like work but without the satisfaction of accomplishing anything”?1

Before cynicism washes over, it is worth considering the relationship between strategy and organizational culture. One predominant view of this relationship is adversarial—that “culture eats strategy for breakfast.” While this viewpoint may be appealing (perhaps because it absolves leaders from needing to link strategy to organizational success), it is not accurate. Theories from anthropology, such as cultural theme theory22 and cultural schema theory,23 suggest that the recurrent words and phrases and themes in written documents “stimulate, guide, and pattern future behaviors.”24

These theories suggest that strategic planning, and those dusty documents on your shelf, may be important not for what they produce but for what they express.25 According to Wiedman and Martinez, “even though written plans with mission, goals, and objectives may not be read until they are updated again, the cultural themes, orally restated in committee meetings, informal conversations, job descriptions, etc., become a dynamic force of culturally accepted behavior.”24

Repetition of themes in the formal and informal discourse of an organization can, over time, change behavior and influence the culture. Wiedman and Martinez’s study of strategic planning at a new medical school found that “strategic planning can play an important role in directing organizational culture change.”24(p272) The language of strategy may have a decisive effect on culture, as Byrne and colleagues’ case study demonstrates.10 This symbolic, strategy-as-culture effect can be critical for leading stakeholders (e.g., governing boards, faculty, students, state legislatures, donors), many of whom may not intend to be led easily.

So maybe we have had it all wrong: Maybe culture is not an oppositional force that wreaks havoc with attempts at strategy setting in organizations. Maybe strategy and culture are different manifestations of the same force. Maybe the power of strategic planning is the way you talk about it to shape the culture of your institution. Maybe strategic planning matters for the values it conveys, the rituals it embodies, and the way it nudges your organization in new directions.

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New Directions for Research

Curiously, as important as effective leadership and management practices are for medical schools, teaching hospitals, academic health systems, and the associations that support medical education, there is little research on strategic planning and strategy development and execution within the academic medicine community. This is especially surprising for an institutional exercise that is mandatory for medical education programs to receive LCME accreditation. There have been only a few case studies published in the pages of this journal.10,26–31 Cross-institutional, multidisciplinary studies that could inform practice in meaningful ways are needed. If strategic planning does in fact matter, it would behoove institutional leaders, practitioners, and researchers to take a multidisciplinary approach to show us how.

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Acknowledgments:

The author thanks Anne Barnes, Peter Buckley, Jennifer Schlener, and David Skorton for helpful comments on an earlier version of this article. The author is solely responsible for its contents.

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