By John Barrington
A colleague asked me recently about the Argenti System of Strategic Planning and made the point that he did not think it applicable to his organisation as he wanted to develop an aggressive Vision, or as Jim Collins would call it, a Big Hairy Audacious Goal (BHAG).
I suggested otherwise. We have worked with many a client at organisational and industry levels to create so-called BHAG’s. They are aspirational, can be inspirational and, as Collins’ documents in Good to Great and Built to Last, can drive exceptional outcomes over long periods of time.
The Argenti system, and John Argenti himself, is not opposed to setting grand Visions. Having said that, John is not a fan of the audacious goal setting approach. In this respect, he is in good company: esteemed Australian business leader, Michael Chaney, is a self-confessed ‘logical incrementalist’ and the long-term out performance of Wesfarmers demonstrates the success of such an approach (Wesfarmers’ 10 year Total Shareholder Return is 7.8% CAGR against the All Ords 6.3% CAGR - Source: http://www.media-server.com/m/p/2i7ewv2i). Logical incrementalism actually stems from the work of James Brian Quinn and is a proactive approach to the development of strategy whereby managers intentionally choose to let unintended strategies emerge. Of course, dreaming up strategies on the run could also be considered as emergent, but it is reactive and usually ad hoc. When Quinn uses the term ‘logical’, he means ‘reasonable and well-considered’.
But back to Argenti. The brilliance here is that Argenti proposes that the Vision work come at the end of the planning process. While this is counter-intuitive, it is very powerful because it forces the strategic planning team to begin where strategy must: understanding the true purpose of the organisation. Once the raison d’etra of the firm is understood and agreed, a performance indicator from the intended beneficiaries’ perspective is developed. It is against this Beneficiary Performance Indicator that all subsequent work of setting targets, calculating forecasts, identifying Strategic Issues and developing strategies is completed.
Only then, when the real reason for being is fully understood and the true strategic issues have been hunted down, can a planning team reasonably develop a Vision; be it audacious or not.
This is certainly not the normal approach. But if you think it through, logically, you will find that it makes eminent sense.
For more information, please feel free to email me at firstname.lastname@example.org.