In complex environments, our job isn’t to predict the future—it’s to create conditions where good things can emerge and then amplify what’s working.
“A beautifully detailed plan feels great—until reality intervenes.” In this episode, Richard and Peter share hard-earned lessons about annual planning from their work with hundreds of organizations. They reveal why most companies should spend less time on detailed strategies and more time clarifying vision.
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Episode transcription
Richard Lawrence
There’s something quite seductive about a beautifully detailed plan. The more specific it is, the more real it feels – even if it’s completely made up. So, as we enter the end of the year– beginning of the next year– planning season, many organizations are spending lots of time crafting detailed strategies and cascading goals for the coming year. But what if all that detailed planning is actually working against us? In this episode, we’ll explain how, for most organizations, you’re much better off spending your time clarifying your vision than you are creating a detailed strategy and goals.
Peter Green
But first a quick reminder that the Humanizing Work show is a free resource sponsored by the Humanizing Work company, where we help organizations get better at leadership, product management, and collaboration. Visit the contact page on our website, humanizingwork.com, and schedule a conversation with us if your organization wants to see stronger results in those areas.
Richard
Let’s start by describing what we call the planning paradox, which is the phenomenon where detailed, long-term planning feels productive and essential, yet often proves ineffective—or even counterproductive—in complex and uncertain environments.
The paradox lies in the comforting perception that a well-laid plan creates control over the future, while in reality, the more detailed and the more inflexible the plan, the less adaptable it proves to be when conditions inevitably change.
At best we’ve wasted a lot of time creating a plan that didn’t turn out to benefit us in any way. At worst, we hang on to the plan for far too long and miss out on other opportunities.
Peter
Detailed planning is the right move in two specific contexts. First, crafting a detailed plan can rally support and buy-in for an initiative. Now, we might debate whether it’s ethical to use the planning paradox to get buy-in for an initiative that will probably or maybe even inevitably change later, but there are some situations where that’s the only way to get something big and important started.
The other context is when we’re planning an initiative where all the variables are known, and then good, detailed planning is the right move. It helps us execute smoothly without unpleasant surprises.
Richard
But we should be very cautions of these two scenarios. Pitching an initiative based on a plan we know is likely to change can have disastrous results for our reputation and for the well-being of the organization we’re a part of.
And most business domains these days are primarily dealing in unpredictable work.
The Cynefin framework helps us make sense of big initiatives. At first glance, an initiative might seem to fit primarily in the complicated domain, where cause and effect are discoverable through analysis, and where detailed plans are valuable. But big initiatives that look Complicated before we start often contain some core hidden complexity.
And in the complex domain those same detailed plans are harmful. They create an illusion of certainty that makes us less responsive as reality emerges. We become invested in our story about the future rather than paying attention to what’s actually happening.
Peter
Now, looking back over the past few years, Richard, we’ve spent a decent amount of time crafting detailed strategies, forming OKRs, tracking those OKRs, trying to get back on track when the OKRs didn’t seem to be delivering any benefit, and then maybe feeling guilty if we didn’t meet the OKR, like maybe we just didn’t do it all correctly.
Richard
To give ourselves some credit there, we started doing that because people had talked about how great they found OKRs, and we didn’t quite get it, and we wanted to give it a real experiment, but…
Peter
Ya, in hindsight, our strategy and goals were all sort of future predictions about what would lead to better business outcomes and more impact for our clients. Maybe a simpler term for “future predictions” is guesses. And here’s the thing–all leaders are guessing. Sure, we’ve got data, we’ve got our intuition, we’ve got desired outcomes in mind. But we’re still trying to guess what will happen in the future.
Thinking about our guesses, some of them were right, and others weren’t. And while we’ve gotten faster at abandoning a strategy or goal that wasn’t paying off, we’ve certainly spent plenty of our collective time and energy creating plans and goals for things that turned out to not be worth the effort.
Much of my success in business has been a result of pushing back on things that have felt like a waste of time, so these days I’m a little bit hesitant to recommend lots of time spent in conference rooms, video conferences, and email or chat threads creating those detailed strategies and cascading OKRs or KPIs. I’ve come to believe that there’s limited benefit in that level of detailed guessing about the future. I’m sure many of our listeners have had a similar reaction.
So should we just cancel all of our annual planning? That would probably be throwing the baby out with the bathwater, to use what I’ve always considered kind of a weird adage.
Richard
Oh—I was so close to just pulling them off our calendars. [Peter chuckles] But I think you’re right. There are some clear benefits to thinking about the big picture. It’s really easy to slip into a reactive execution mode, where we’re always just doing the next most urgent task. Responding to the next email that hits our in box. We can transcend that reactive approach by pausing from time to time to look up from our desks, and do some introspection, and decide what outcomes we’re trying to create. Then we can evaluate what actions we can take to make those outcomes most likely. And the end of the year and the beginning of the next year is a decent time to do some of that looking up and introspecting and thinking about where we want to go.
The big problem though is spending lots of time creating the details that give us this illusion of certainty. Instead, we’re finding it much more useful to create clarity about purpose and vision. Where are we trying to go? What outcomes are we trying to create? What difference do we want to make in the world? Unlike our strategies, which need to adapt as we learn, purpose and vision tend to be more stable. They’re the North Star, helping us evaluate whether our current approaches are going in the right direction.
Peter
Right. Informed by complexity and that clear North Star, we can approach strategy in a new, more effective way. Instead of plotting out those detailed plans, strategy looks much more like scattering seeds to see which ones take root, rather than carefully laying out rows and creating detailed schedules for planting, weeding, and harvesting.
Now, we recommend four steps for this approach to strategy. First is to gather data to aid us in creating as clear of an understanding as possible of our current state. Next, we identify multiple options for moving toward our vision. In that last analogy, these are the seeds that we’re going to plant. Then in step three, we treat those options as experiments that we design to give us new information as quickly as possible. And then, finally, we keep ourselves sort of emotionally and tactically ready to abandon approaches that aren’t working.
Richard
I’m glad you mentioned the emotional readiness. Because it can feel uncomfortable, especially for leaders who are used to providing detailed direction. It might even feel like we’re not doing our job if we’re not giving detailed plans. But in complex environments, our job isn’t to predict the future – it’s to create the conditions where good things can emerge and then amplify what’s working.
Peter
So, as you approach annual planning, how do you do it well?
- Invest time creating clarity about purpose and vision
- Identify your current state honestly
- Generate multiple possible approaches
- Create clear experiments to test those approaches
- Build in frequent check-ins to evaluate what you’re learning
- Be ready to pivot when the data suggests you should
The key here is holding your strategies loosely while holding your vision firmly.
Richard
We’d love to hear about your experiences with annual planning. How do you balance the need for direction with the need for adaptability? Share your thoughts in the comments on the episode on YouTube or LinkedIn.
If you found this episode valuable, please like and subscribe to the show, and share it with others who might benefit. And if you’d like help improving your organization’s planning and execution capabilities, visit our website, humanizingwork.com to learn more about how we can help.
Thanks for joining us today on the Humanizing Work Show. We’ll see you next time!
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