The Big Lie of Strategic Planning – III

This would be the last in the series of posts on article The Big Lie of Strategic Planning by Roger L. Martin.

Circumventing the Traps

Companies that have fallen into the trap are the ones that are typically comfortable with their planning process.  Their focus is on getting more profit from the existing revenue than generating more revenue. Even their metrics are focused on finance and capabilities, rather than on customer satisfaction and market share. This anomaly is because they are accustomed to their comfort zone, whereas they should have be on their toes.  Therefore, it is recommended, to avoid such a situation, they should follow these three basic rules.

Rule 1: Keep the strategy statement simple

The first rule would be to focus their energies on revenue generating activities, such as on their customers.  After all, it is customers who decide to spend on a company which offers a better value proposition. Against this background, two broad choices determine a company’s success: target customers and creation of compelling value propositions. It is understood that this approach will also simplify the whole planning process.

In my opinion, all the discussion should be focused on how customer choices and value propositions will be impacted by the changes in the external environment.

Rule 2: Recognize that strategy is not about perfection

Here the premise is that managers believe strategy needs to be perfect.  But, as strategy is about revenue, and not cost, it is impossible to bring about perfection. So, this is something they need to keep in mind throughout the process.  But, for that to happen, the realization has to come from the top.  Until there is a realization within the organization, there will always be a greater emphasis on inflexible strategy.

Rule 3: Make the logic explicit.

So, the best way to increase the chances of strategy being correct, is to test one’s logic behind the thinking.  For that to happen, one needs to find answers regarding what one needs to believe about customers, about the evolution of the industry concerned, about competition, and about company’s capabilities.

Finally, the author argues that planning, cost management, and focusing on capabilities are dangerous trap for strategy makers. Yet, it cannot be denied that these activities are essential, and no company can afford to neglect it. Though, it is strategy that convinces the customers to spend on the company, it is these very traps that ensure that maximum profits are generated out of the revenue. So, even though planning and other activities will remain an important part of the whole process, a conscious effort will ensure that they don’t play a dominant role.

The Big Lie of Strategic Planning – II

Comfort Trap 3: Self-Referential Strategy Frameworks

Carrying forward from article The Big Lie of Strategic Planning by Roger L. Martin.  The author believes that the third trap is the most insidious of all. Because the major frameworks for articulating a strategy can lead managers to devise one around something under their control. It has to be understood that strategy is not about having complete control, but about adapting to environmental factors not under our control.  The author, therefore, quotes Mintzberg theory in highlighting the need to distinguish between deliberate strategy, which is intentional, and emergent strategy, which is about company’s response to unexpected events. According to the theory, managers overestimate their ability to predict future. So, he suggested they should concentrate on fine tuning their deliberate strategy in context of emerging trends in the external environment.

However there is a contradiction in this approach. If the future is that unpredictable, then how can managers be assured that it will become any less? Further, how will the managers realize that their environment has become predictable enough to make strategic choices? This realization has given credence to the belief that the concept of emergent strategy has become an excuse for avoiding difficult choices and prompts them to follow what others are doing.  But, following the competitors will not deliver unique results or deliver any advantage.

Mintzberg concept was further carried forward by Wernerfelt’s article, “A Resource-Based View of the Firm”.  According to the Resource-Based View (RBV), key to a firm’s competitive advantage would be some something which is valuable, rare, inimitable, and non-substitutable capabilities. This concept became very popular among managers as it gave them the idea that building “core competencies” or “strategic capabilities” was key to building strategy. Also, this is something that is knowable and controllable, and within reason can assure some success.  But, this approach is not as simple as it looks. A company may build its core competencies, but there is no guarantee that it will appeal to the customers. And customers’ choices are unknowable and uncontrollable. To strike a balance, some managers strive to focus on competencies that can be built with a degree of certainty.

So, rather than planning in every bit detail by just following a framework, it it is better to spend greater time in knowing the customer. And, based on that knowledge, focus on core competencies that can be built within the budget.

The Big Lie of Strategic Planning – I

The article The Big Lie of Strategic Planning by Roger L. Martin elaborates the pitfalls of blindly following a strategic management methodology. The author believes that most managers find the process overwhelming. It prompts them to predict the future, which can only be guessed. Further, making strategic choices rules out other possible options. So, against this background, their natural reaction is to resort to tried and tested methods. He believes this approach is not the best way, as fear and discomfort are an essential part of the process. On the other hand, if one is comfortable with the strategy, chances are it isn’t very good. He concludes that a good strategy is not an outcome of careful research and planning, which delivers a desired outcome. Instead, it is a broad approach of achieving what they want, and analysing how realistic are the various approaches. Further, he elaborates on five major traps.

So far, the take away would be to follow the procedure broadly. Also, to make the participants aware right in the beginning that the process can be as good as the insight they provide. The idea should be to make broad choices to achieve various goals. In practical terms, facilitators should give sufficient time to the participants, particularly while doing external environmental analysis.

Comfort Trap 1: Strategic Planning

The author cautions against confusing strategy with planning. Typically, managers develop a tendency of paying greater emphasis on planning – as it has a framework and is a familiar territory. Further, the planning process becomes the basis for the budgeting process. But, it has to be understood that all this is not strategy. Further, author is right when he says that planning does not question the choices an organization chose not to make. It does not question the assumptions. And, as planning forms the basis of budget, the dominant theme is affordability. This approach leads to decisions based on short-term goals. Instead, a strategy is something long-term.

Therefore, it is necessary that facilitators pay greater attention to strategy part of the process. In practical terms, that would mean paying sufficient emphasis on identifying value creating strengths and value reducing weaknesses. Also, it involves giving sufficient time to the participants for creating a strategic thinking map. As well as identifying strategic implications of competitively relevant strengths and weaknesses.

Comfort Trap 2: Cost-Based Thinking

The next trap in the planning process is when managers are tempted towards cost-based thinking. This thinking in turn supports the planning process, as both of them are in the control of a company. To put in simple terms, a company decides how much and where to spend. But, this cannot be called a strategy, which is something long-term. This thinking also put managers into a comfortable position, as it can be planned with relative precision. Also, this is an important and useful exercise. However, problems start when the same approaches are applied to the revenue side. Treating revenue planning on the same scale as cost planning is a folly. When the planned revenue is not incurred, it can even be perceived as a failure of planning. The reason why revenue planning does not deliver the same results as cost planning, is because costs are in the hands of the company, while revenue is in the hands of the customers. As the author states, revenue is neither knowable nor controllable. Therefore, predicting cost is fundamentally different from revenue.

The takeaway from this is that companies should plan for revenue very differently from costs. Rather than making plans salesperson by salesperson, channel by channel, and region by region – they should spend more time on knowing their customers and creating value proposition.

Erin Meyer’s Assessment Tool

Erin Meyer, the author of The Culture Map and “Navigating the Cultural Minefield” , had identified eight dimensions to capture the difference between various cultures.  Using her experience with these techniques, she has created an assessment tool for HBR.  As I am born and brought up in India and have significant work experience in Canada, I decided to take the test twice, by putting the same answers and different nationalities.  And the comparison is definitely something to talk about.  I will be evaluating all the eight dimensions in sequence.

Communicating:  This measures the degree to which a culture prefers low- or high- context communication.  In low-context communication cultures, such as in Germany and the Netherlands, the communication is precise, simple, and explicit.  Here, repetition and written communication are appreciated for the sake or clarity.  In high-context communication cultures – such as in China, India, and France – communication is sophisticated, nuanced, and layered.  Here, reading in between the lines is expected.  Less is put in writing and more is left to interpretation. 

Canadian culture is the extreme end of low-context scale, whereas Indian culture towards the high-context scale.  And I am placed right in the middle of the scale. And yes, I have seen this transition in me, as I feel I am no longer as ‘wordy’ as I once used to be.  Now, I prefer to convey the message in a little words as possible.

Evaluating:  This measures the relative preference for direct versus indirect criticism.  For example, French are high-content communicators as compared to American, but are more direct in their negative feedback.

Canadian cultures stand right in the middle on this scale, whereas Indian culture is slightly more towards indirect negative feedback.  As far as I am am concerned, I am strongly leaning towards direct negative feedback.  I am not sure where this influence came from.  It could very well be from my clinical background, where a direct word of caution is a norm.  Also, it could because of the fact that Indian culture varies a lot; and I am influence from a sub-culture that prefers direct negative feedback.

Persuading:  This dimension measures principles-first versus applications-first, also known as deductive versus inductive reasoning.  Typically, people of Germanic and Southern European cultures find it more persuasive to lay out generally accepted principles before presenting an opinion or making a statement.  In contrast, American and British managers begin with opinions or factual observations, and adding concepts later if deemed necessary.

Canadian culture, like that of America or Britain, lays strong emphasis on applications first.  In contrast, there is no mention of Indian approach, which means they follow a holistic approach.  I am myself place in the middle of the scale, from which I infer that mine would be typically Indian approach.  Though I must add that I haven’t paid much attention to  my own approach during routine conversation. 

Leading:  This scale measures the degree of respect and deference shown to authority figures, where the spectrum is between egalitarian and the hierarchical.  Those from Scandinavian countries and Israel fall into the egalitarian category, where those from China, Russia, Nigeria, and Japan are into hierarchical category.

Canadian culture leans towards egalitarian, where as Indian cultural is strongly hierarchical.  I am place right in the middle of the scale.  I believe this is how I have been, as far back as I can remember about myself.  And Canadian environment gave me comfort, and an opportunity to be myself.  I believe that in hierarchical atmosphere, the purpose or mission is lost in honouring the hierarchy. 

Deciding:  Contrary to popular perceptions, egalitarian cultures need not necessarily be consensual and most hierarchical one need not believe in top-down decision making.  For example, Japanese culture is hierarchical, but a firm believer in consensual culture.  Similarly, Germans are more hierarchical than Americans, but are more likely to take group discussions. 

Canadian culture straddles somewhere in the middle, and as expected, Indian culture strongly prefers top-down decision making.  And my approach mimics that of Canadian culture.  I believe my approached changed towards consensual after working in Canadian environment.

Trusting:  This scale balances task-based trust with relationship-based trust.  In a task-based culture, such as the United States, the UK, or Germany, trust is built through work.  However, in relationship-based societies, such as in Brazil, China, or India, trust is built by personal and affective connections. 

Canadian culture is at the extreme end of task-based trust, whereas Indian culture is strongly relationship based.  I myself have a strong tendency towards being task-based, but not as strong as Canadians in general.  I believe, being a person of technical background, I was always had leaning towards task-based trust.  They may have been reinforced further upon exposure to Canadian work environment.

Disagreeing:  Everybody agrees that a degree of disagreement or confrontation is healthy.  Typically, in countries like Indonesia, Japan, and Thailand, public airing of disagreement is considered something undesirable.  In contrast, in Germany, France, and the Netherlands, people are quite comfortable with it.  This dimension measure how an individual views confrontation.  This does not mean that the person himself is confrontationist.  It just shows how one feels it is likely to improve group dynamics or to harm relationship within a team.

In Canadian culture, the opinion is somewhere in between, whereas in Indian culture there is a tendency to lean towards non-confrontation.  I am a bit surprised here as I was expecting Canadians to be extremely non-confrontationist, as they are typically politically correct.  Similarly, I was expecting Indians to be extremely confrontationist, as they are quite argumentative.  But, being hierarchical and believers in top-down approach, it makes them non-confrontationist in work environment.  As for myself, there are no surprises as I am leaning towards confrontationist attitude.  I prefer to have thorough brainstorming before any decision is made, and generally an open discussion helps build trust and understanding.

Scheduling:  All business follow as schedule, but in countries like India, Brazil, and Italy, people treat a schedule like a suggestion.  In contrast, in Switzerland, Germany, and the U.S., people stick to the plan.  This scale measures you view of time as linear or flexible, depending on how much value you place on structure or adaptability. 

In Canadian culture, the norm is strongly suggestive of linear, where as in Indian culture it is extremely flexible.  As far as I am concerned, I am more linear than an average Canadian.  I think this is primarily because of how I am.  I was like that even when I was in Indian environment.                           

Do we dismantle the hospitals?

The Globe and Mail. (2014). Why the future of health care may depend on tearing down the hospital. [online] Retrieved from: http://www.theglobeandmail.com/life/health-and-fitness/health/the-hospital/the-future-of-health-care-may-depend-on-tearing-down-the-hospital/article17030106/?cmpid=rss1 [Accessed: 24 Feb 2014].

The article is about tearing down the hospital in favour of a network of community health-care centers.  It gives an example of a patients with comorbidities who had been in and out of the hospitals several times.  The argument being given is that the current system hasn’t helped the patient in long-term remission and the whole ordeal has been costly for the system.  The article further states that the current health care system is acute care centric and offers no additional benefits to such patients.

I would agree with the latter part, but we do need to have an alternative in place before we start tearing down these hospital.  What would have happened had there not been that tertiary care hospital?  Is our community based infrastructure ready for such patients? 

Further, the article talks about how such patients get caught up in vicious cycle of deterioration at home, only to return to the hospitals.  I would argue that this is what the hospitals are meant for.  Treatment in the community is best left for such diseases which can typically treated in ambulatory settings.  Patients with such comorbidities cannot be treated successfully in community hospitals, let alone in community health care centres. 

The article again brings to foreground that various innovative physicians have a solution, which is getting rid of the hospital to begin with.  They argue that their community based model will provide services such as physiotherapy, social workers etc.I would argue that before we think of that, we must have an alternative ready and successful.  There is no guarantee that such drastic measures will bear favourable results.  The unfortunate part is that the proponents of community based model are targeting the kind of patients that need the hospital setup the most. 

There is an argument put forward that channelling money towards home and community care without dismantling the hospitals would be counterproductive.  As this is something that will only increase the costs.  I would consider such a suggestion quite preposterous.  How can one do away with hospitals without any kind of alternative in place.  As all would agree, the transition away from the hospital has to be gradual and calculated.  The proponents, however, believe that there are many services, like tests, that cannot be administered from home, thereby contradicting themselves.  I would suggest that efforts should be made to use telemedicine more effectively in conjunction with home and community care, before efforts are made do reduce burden on the hospitals.  The articles does agree, however, that just spending money on home care won’t deliver desired results unless it is coupled with services to fully integrate the system.

The article gives an example of how the paramedics had take an intoxicated patient to the hospital, and by the time he could be admitted, he had already recovered and walked off the emergency.  I would recommend that the proponents of the community model should rather me concentrating on such patients.  We need to explore why paramedics couldn’t have taken such a patients a community based organization in the first place. 

The articles gives an example of a clinic in a homeless shelter, which welcomes patients brought by police and paramedics.  It goes back to the previous example, and elaborates how their small venture has expanded to more beds for homeless, and provide services of nurses; personal-support workers; additions; counsellors; and social workers.  I believe this would be a great starting point of integration and shouldering responsibility, rather than big ticket comorbidity ones. 

The article highlights another set of opinion that presence of a hospital based system prevents any innovation from taking place in the community.  I would argue that it is not hospitals’ fault, but lack of culture of innovation in the system.  Also, the impression in the public is that hospitals are meant for emergencies or serious conditions.  I really wonder how many really go to hospital out of choice?  I believe here lies the opportunity for making the Community Health Centres (CHC) more visible.  There should be an effort on their part to reach out to the public.  After all, do people even know what all services are available at their nearest CHC? 

Further, it elaborates on a particular shining example of innovation in community based settings at a Family Health Team (FHT).  I believe that here lies an opportunity for creating a governance structure to share such ideas.  I am not sure, but I would take the liberty of recommending this to the Association of Family Health Team of Ontario (AFHTO) to take up a leadership role in this regard.  At the time, involved LHINs so that they are aware of the ground situation, and gauge and plan any move from hospital to community sector.     

Employer Tie Financial Rewards, Penalties To Health Tests, Lifestyle Choices

This article is by Kaiser Health News (Appleby, 2014) goes into details whether incentives can help promote healthy lifestyles.  It gives example of various organizations.  Every year employees of Swiss Village Retirement Community have their check up done.  That helps to determine how much they pay for their health coverage.  For example, those who manage to keep level of smoking, obesity, BP and cholesterol below a certain level, get discounts on their premium.  Similarly, employees of Jones Lang LaSale, get cash discount upon meeting a certain targets.  Even though proponents of such approach agree that financial benefits help make healthier choices, the studies so far have been inconclusive.  On top of that supporters of those already suffering from chronic diseases fear of discrimination. 

The management of Swiss Village feels that this approach has helped slow down the increase in their health care cost.  And at the same time, helped keep employee health in focus.  Further, the health screening is being gradually extended to family members who are covered by insurance.

The article strongly supports the idea that such programs should be voluntary.  They should not be a condition for offering coverage.  And there should be a reasonable alternative for those who cannot achieve the medical goal.  Although there is not general agreement about what that alternate would look like.  The perception is that they are not voluntary as portrayed, as you are charge premium not participating. 

Taking the example of Broward County, which recommends employee participation in screening programs, and charges them if they decline.  Those who participate are offered disease management program for asthma, high blood pressure, diabetes, congestive heart failure or kidney disease.  This was disputed by the state of Colorado, which necessitated that the program be accredited, not penalize workers for not participating or not meeting the benchmarks.  This and other legislations recommended provision for alternatives and raised their concern that linking test results to insurance premium can result in discrimination.

They do raise the point rather strongly that by making deductibles higher, the employers are making life tougher for those already sick.  Though the employer contest this claim as they feel as they are the ones paying for insurance cost, they have every right to impose such measures. 

From the available data so far, it is hard to gauge the impact on the health care bill of employers.  Although have been reasonably successful in taking employee off smoking, the results for obesity have been less remarkable.  That could be due to the fact that the latter is multi-factorial.

Overall, I would agree with such financial incentives as they not only save money but also help keep one healthy.  I would call it an example of positive discrimination.  It may be called as loss of privacy by some, but they should see it as a greater good for themselves. 

It is indeed a good idea to involved the spouses or other family members in the screening process, especially if they are also covered by insurance.  It becomes necessary because employees are known to take leave because of illness in the family.  So, that would be loss of productive days even though the one employed is not sick. 

There is a lot of mention that the screening programs be voluntary.  I would party agree that agreeing to participate should not be a condition for employment.  But, there should  be disincentives for not participating.  As for alternatives for those who are unable to achieve the medical goals, there could be a few alternatives.  One of the possible one could be to pay them a fixed amount, which will allow them to purchase coverage from health care exchanges.  Also those who are suffering from  non-lifestyle diseases should be exempted as it of no fault of their own.  Included in this list should be those whose condition cannot be reversed by changing lifestyle behavior, such as those in advanced stages of Diabetes, Cardiovascular diseases, Cancer, etc.  With insurance cost of those undergoing assessment getting reduced, resources can be freed up for those critically or with disability.  Another option for those already having health problems is standard premium with penalty or best plan from exchange, whichever is lower.  Either way, health problem should not be a condition for employment. 


Appleby, J. (2014). Employers tie financial rewards, penalties to health tests, lifestyle choices – kaiser health news. [online] Retrieved from: http://www.kaiserhealthnews.org/stories/2012/april/02/employers-financial-rewards-penalties-health-tests.aspx [Accessed: 2 Jan 2014].

Employee health incentive: Employee wellness program prod workers to adopt healthy lifestyles

According to this article (Hsph.harvard.edu, 2013), employers are considering various options to encourage their staff towards primary care.  Without going into the details of the options, we will try to understand the thought process behind these innovative approaches. 

On of the obvious ways of encouraging the employees to change their behaviour is the “carrot and stick” policy.  They can start off with concentrating on the most widespread and critical contributing factors, such as smoking and obesity.  For those who are already on the wrong side of these parameters, the penalties should be less strict and the wellness programs should have more reasonable targets. 

Employers broadly use three ways of encouraging healthy behaviours.  Firstly, there are certain companies like IBM that provides incentives to those will to work towards healthy lifestyles.  Then there are certain organizations like State of Alabama that mostly provide incentives, but also impose penalties under certain conditions.  Lastly, there are likes of Scotts Miracle-Gro who are most proactive, and use a balance of incentives and disincentives.  They provide membership of fitness centre, healthy living coaching and free prescriptions of generic drugs.  At the same time, employees who don’t participate in their voluntary health-risk appraisal have to pay higher premium.  Those found to be of mid- to high-risk can take advantage of wellness measures.  And those who don’t follow up on measures, pay even higher premium.  

Researcher concur that there is insufficient evidence to show if incentives or heath risk assessment actually work.  But there is general opinion that penalties will.  In summary, the “carrot and stick” policy would be the best way to go.


Hsph.harvard.edu. (2013). Harvard school of public health » hsph news » employer health incentives: employee wellness programs prod workers to adopt healthy lifestyles. [online] Retrieved from: http://www.hsph.harvard.edu/news/magazine/winter09healthincentives/ [Accessed: 31 Dec 2013]