صعود و نزول - یا تحول؟ تکامل برنامه ریزی استراتژیک در شرکت جنرال الکتریک، 1940-2006

We challenge conventional accounts of the rise and fall of strategic planning by examining the history and evolution of strategic planning practices at the General Electric Company (GE) during six CEO regimes: Wilson, Cordiner, Borch, Jones, Welch and Immelt. We distinguish strategic planning — a system of strategy formulation, decision making and control — from particular planning technologies such as SBU planning. We show how an integrative system of strategic planning was first established in GE in the 1950s and continues, albeit transformed, to this day. Integrative strategic planning at GE was originally called long range planning, later strategic planning, and after the abandonment of SBU planning, GE'S Operating System, but changes in the use of labels mask continuities in prevailing practices. The history of strategic planning at GE has several implications for contemporary strategy making: first, the practice of strategic planning cannot remain static but must evolve to facilitate changes in corporate agenda and management style. Second, the CEO's involvement in design of the strategic planning system is critical to its endurance and centrality. Third, specialized governance channels for decision-making and communications focus attention of corporate executives on distinct, yet critical, planning tasks to shape the corporate agenda. Finally, the tight coupling of information and communication flows across governance channels is critical for the overall integration and effectiveness of the strategic planning system.

The role and importance of strategic planning in corporate practice remains a subject of controversy for both academics and practitioners. Hailed as a critical corporate function during the late 1960s and 1970s, its effectiveness came under attack in the 1980s and 1990s.1 The decline of corporate staffs during the 1980s was widely reported in the business press, even though at the same time strategy consulting firms flourished and expanded in size and offerings. Hamel, Prahalad, Pascale and have others questioned the contribution of strategic planning to firm innovation and global competitiveness, and these critiques culminated with Mintzberg's influential and award-winning 1994 treatise The Rise and Fall of Strategic Planning, which focused on the failings of formal planning processes and described its widespread abandonment. 2 Yet the topic of strategic planning remains visible in the research literature, with almost 900 papers on the subject being published since 1995.3 Recent studies suggest that strategic planning is not extinct, but that it has evolved in response to dynamic environmental conditions.4 However, if strategic planning is not ‘dead’, in what form has it survived? How has strategic planning practice changed?; how is it practiced in large corporations today? and can formal strategic planning still benefit large, multi-business corporations?To help answer these questions, we study the history and evolution of strategic planning at the General Electric Company (GE). Since the early 1970s - if not earlier - GE has been a model and archetype for effective strategic management practices, and the introduction of portfolio planning and the implementation of the strategic business unit (SBU) concept by then-CEO Fred Borch in the early 1970s has led the company to be considered as an early developer of corporate strategic planning. This was further developed under his successor, Reginald Jones, and the GE strategic planning system was promoted as a best practice for diffusion to other corporate settings. However, strategic planning at GE is widely viewed as having been substantially abandoned under Jack Welch, when he decimated strategic planning staffs at the corporate and business unit levels, and focused instead on corporate-level initiatives, such as restructuring, cultural change and Six Sigma. Based on the highly visible changes under Borch, Jones and Welch, Mintzberg characterizes GE as FIFO (first in-first out) as far as strategic planning was concerned, and widely emulated both in its adoption of a formal strategic planning system, and its abandonment. Under Jeffrey Immelt, the importance of strategic planning appears to have grown once again, with the role of strategic planning now highlighted as part of GE's growth strategy and corporate governance practices. Does GE's practice of strategic planning conform to Mintzberg's characterization, or to those of other strategy scholars?5 Given GE's prominence as a widely admired model of effective management, we seek a clearer understanding of how strategic planning evolved at GE, and to provide insights on the broader question of its rise, fall and transformation in other large multi-business corporations. To understand the evolution of strategic planning at GE, we examine the history of corporate and business-unit planning under the regimes of six CEOs from 1940 to the present—Charles E. Wilson, Ralph J. Cordiner, Fred J. Borch, Reginald H. Jones, John F. Welch and Jeffrey R. Immelt. We begin our analysis in 1940 to explore whether and how planning was undertaken at GE prior to the formal development of what later became known as strategic planning. In exploring the evolution of planning, we examine how practices were shaped by changes in the firm's structure and strategy. We utilize both primary and secondary data sources to analyze changes in the formal agendas, decision-making channels, roles and vocabularies that have constituted strategic planning at GE. Our methodology uses both narrative analysis and analytical induction, relying on evolutionary perspectives on strategy and the attention-based view of the firm to help guide our analysis and interpretations.6 Our analysis yields a different view of the evolution of strategic planning at GE from standard accounts such as those by Mintzberg and Chandler. As we discuss below, the practice of strategic planning began earlier than previously thought, albeit in a less developed form and under different labels and organization. The practice was later renamed and transformed under Jack Welch, but not abandoned. Strategic planning practices were conducted as part of GE's commercial development and post-war planning during the 1940s. Since the early 1950s, GE has adopted an integrated system of long range planning which incorporated activities that we would now consider strategic. While this system has evolved with changing activities, positions and vocabularies, an integrated system of planning, focused on guiding strategy formulation and implementation, remains in place to this day. In analyzing GE's history, the rise and fall of large strategic planning staffs experienced at GE and in other large U.S. corporations must be distinguished from the overall practice of strategic planning. Strategic planning continues to thrive at GE, albeit in altered form. GE adopted an integrated long range planning system in the early 1950s, incorporating activities we would now consider strategic. [Despite] changing activities, positions and vocabularies, it remains in place today. We explore the implication of our findings for research on strategy processes and practices and for strategy practitioners in large multi-business corporations. We focus on strategic planning as a system, with an evolving set of component positions, vocabularies, decision making channels, agendas and routines. We find that GE's evolving corporate and business unit planning practices continue to offer a viable model of best practice.

The sixty-year evolution of strategic planning practices at GE indicates that strategic planning is not a management fad, but an enduring and evolving management practice. Strategic planning is more than the application of any specific tool or technique, whether it be long range forecasting, PIMS, SBU planning, Six Sigma, or any specific planning methodology. While specific management practices (such as SBU planning) were first adopted and subsequently abandoned at GE, strategic planning practices have remained consequential because of their direct impact on strategic decision making. Our analysis suggests that strategic planning systems evolve over time and are subject to transformation by the CEO. The system's evolution reflects its history, the current environment, the organization's decision making structure and changing leadership agendas. Though significant transformations of planning practices occurred under every one of the CEOs studied, our analysis indicates that strategic planning practices are not invented de novo, but reflect the history of component strategic planning channels, positions and vocabularies. For example, the GE Operating System was a new name introduced by Welch for a network of channels that had developed over many decades, and was a direct descendant of Jones' strategic planning system. The success of Welch's planning system was the result, in part, of its precursors under Borch and Jones, and of the financial control system initiated by Cordiner. Rather than create new channels, Welch primarily repurposed existing channels (such as Session C, Boca and the CEC) to focus attention on corporate initiatives and leadership development. Understanding the evolution of a strategic planning system requires that we examine not only the adoption, transformation or abandonment of its component parts, but also how changes in practices interact with other parts of the system. For example, the effects of both adopting and abandoning SBU planning by Borch and Welch respectively, must be understood in the context of the on-going practices of annual planning and business reviews, originally developed by Cordiner and continuing to this day. In an age of ‘celebrity CEOs’, the tendency is to highlight innovations in practices, without relating changes to continuing activities.33 Our analysis of the history of strategic planning at GE provides a new perspective on how strategic planning is organized. Unlike Chandler and Williamson's characterization of strategic planning as the exclusive responsibility of corporate headquarters, GE's history reveals how strategic planning practices can effectively be a responsibility shared between both corporate executives and operating unit managers.34 Decision-making channels that integrate participants from different organizational levels are consequential to achieving collective engagement in strategic planning activities. Our historical analysis further indicates that characterizing planning as either line or staff activities is a great over-simplification. What is common to strategic planning throughout GE's history is the centrality of the CEO in both its design and implementation. Staff have always played a role in assisting the CEO in strategic planning, yet even under the eras of greatest staff influence on strategic planning (during Borch's and Jones' tenures) strategic planning directly involved line managers at multiple organizational levels. While strategic planning staff may play an important role, strategic planning cannot be exclusively a staff activity if it is to be consequential for strategic decision-making and organizational action. to be consequential, planning must be closely coupled with concrete organizational initiatives The analysis of strategic planning at GE suggests that planning, to be consequential, must be closely coupled with concrete organizational initiatives. The Louisville Appliance Park, GE's exit from the computer industry, long run investments in Lexan, and the incorporation of Six Sigma into GE Medical Systems product development efforts, were all directly influenced by strategic planning activities at GE. The success of these initiatives lent credibility and support to strategic planning systems. The continuing viability of strategic planning at GE, in its various forms, suggests that planning cannot be decoupled from operational activities, nor strategizing from managing. The GE case further reveals that the conventional history of strategic planning conflates changes in the labels that describe planning and strategizing with changes in strategic planning activities. The vocabularies used to characterize strategic planning activities evolve as practices evolve, with both changes in words or labels used to categorize key activities, and changes in the meaning of the words. While different labels like long range planning, strategic planning, and strategic management are used at some times to mean very similar practices, at other times they reflect quite distinct activities. However, the use of distinct labels often implies greater discontinuities than are actually revealed by our careful examination the evolution of actual practices. GE did not invent the term strategic planning, but the abandonment of the label during Welch's era has led, in our judgment, to a misunderstanding of the continuing importance of planning as a form of strategizing and as an integrated part of GE's system of management. Strategic management has replaced strategic planning as a favored term to characterize best practices in strategizing, but the history of GE reveals that strategic planning, as a system of practices, is central to strategic management. The centrality, endurance and effectiveness of strategic planning at GE have important implications for practitioners. CEOs should adapt the design of strategic planning systems to reflect their own strategic agenda and management style. CEO commitment to strategic planning is required for its centrality in strategy formulation and implementation, and this commitment requires the CEO to have direct involvement in the design of the system. At GE, each CEO actively engaged in transforming the design of the strategic planning system to meet their own priorities and to reflect their own experience, management style and background, as well as the changing market and institutional environments.35 For example, Jones' financial orientation and more detached management style were facilitated by the adoption of a hierarchical system of SBUs and Sectors. Welch transformed the GE's strategic planning system to reflect his operational orientation and cost-cutting agenda, eliminating the SBUs and Sectors and incorporating Crotonville into his agenda management system. Immelt's addition of the Commercial Council reflects his focus on organic growth through product and market development. These examples indicate that no single form of strategic planning system can serve all corporate agendas and orientations, and CEOs should adapt the design of the planning system to meet their vision and agenda for the corporation. no single form of strategic planning system can serve all corporate agendas: CEOs should adapt their planning system design to meet their vision for the corporation. The GE experience also reveals the critical importance of governance channels for the design of strategic planning systems. Governance channels generate opportunities for formulating, implementing, and monitoring strategy, and create a formal setting for strategic decision making. Two design features of channels are essential for practitioners: channel specialization and channel integration. Given the complexity of strategy formulation, implementation and control, specialized governance channels are required to focus attention on particular aspects of strategizing. At GE business strategy formulation, financial planning and manpower planning are distinct components of its integrated strategic planning system and specialized channels: Growth Playbook, Operating Plan and Session C have been developed to focus attention on each of these three functions: strategic agenda management, operational planning, and executive development. For practitioners interested in the craft of strategy, our analysis illustrates how formal strategic planning can be most effective when understood not as an ad hoc process, but as a part of an integrated system of formal channels for developing strategic and operating plans, reviewing executive manpower needs, financial reporting and evaluation, and agenda management. Information and communications flows across channels are just as important, if not more, than the formal reporting relationships in the organizational chart. Channel integration is facilitated through common issues, initiatives, positions and vocabularies, across the channels. By strengthening the integration of agendas across channels, firms may more effectively communicate corporate strategic priorities, allocate resources, train and evaluate executives, bolster moral, report on competitors, integrate acquisitions and monitor performance. When new governance channels are created, such as Immelt's Commercialization Council, they are likely to be most effective when tightly coupled with existing governance channels to ensure that the decision making system remains coherent and that critical issues and initiatives remain the focus of attention throughout the system.