So far, the 1990s have been the decade of downsizing. But the era of the chainsaw may be nearing its end. At companies such as Procter & Gamble, Sears Roebuck, and Hewlett-Packard, the new emphasis is on strategic planning: that is, identifying and shaping new markets. More managers are turning into architects and carpenters, visualizing and building rather than cutting. And there is a whole new school of management gurus who exhort companies to focus on where they are going, rather than where they are today.
The biggest benefit of strategic planning is its stress on growth. Many companies are nearing the limits in their current markets. Strategic planning creates an atmosphere that encourages managers to look for new opportunities, rather than simply cutting a few more workers.
But the danger of strategic planning is that it can lock companies into a particular vision of the future--one that may not come to pass. Once-attractive markets may not fulfill their promise, while new industries can arise suddenly. Today's strategic plan may be tomorrow's garbage.
That poses a quandary for corporate executives: How to plan for the future when the future changes so quickly. The answer is to make the planning process more democratic. Instead of relegating strategic planning to a separate staff, as in the past, it needs to include a wide range of people, from line managers to customers to suppliers. Top managers must listen and be prepared to shift plans in midstream, if conditions demand it. Achieving a balance between flexibility and planning is the best way for both Corporate America and the economy.