Tailored, not benchmarked. A fresh look at corporate planning

Area of Science:

• Business Strategy
• Organizational Behavior
• Management Science

Background:

• Many companies utilize standardized action planning processes.
• These generic approaches often prove ineffective for managers in competitive markets.
• Benchmarking processes can hinder focus on unique business situations.

Purpose of the Study:

• To argue that effective business planning requires tailored processes.
• To highlight the importance of aligning analytic techniques and organizational processes with specific business needs and managerial skills.
• To demonstrate successful examples of individualized planning.

Main Methods:

• Case study analysis of three companies: Granada, Dow Chemical Company, and Emerson Electric.
• Examination of how different business types (entertainment, chemicals, electrical products) and CEO leadership styles influence planning needs.
• Analysis of CEO approaches to target setting and managerial commitment.

Main Results:

• Individualized planning processes are more effective than generic ones.
• Business planning needs vary significantly based on industry maturity, growth stage, and cyclicality.
• CEO leadership styles impact the methods used to achieve business targets.
• Ineffective planning wastes resources and can lead to poor decision-making.

Conclusions:

• Companies should re-examine and customize their planning processes.
• Tailoring planning to business specifics and executive capabilities is crucial for value creation.
• Moving beyond generic benchmarking is essential for successful strategic planning.