GILL: I've been through a change of this type with a previous company, and it was related to mergers and acquisitions. It's a big culture change for organizations to work through. The necessary elements for these changes to happen are centred around executive sponsorship and leadership. These types of changes need to be lead very clearly and firmly from the top of the organization. It's essential to have a well-articulated, broadly communicated and re-communicated message on the necessity for change. Large changes imply large risks. People get outside of their comfort zone and to make that leap of faith, you have to create discontent with the status quo, to develop a burning platform that people need to leap from. That articulated message of the need for change is very important. You require courage and commitment to drive through the adversity, because it's not a smooth process; things aren't going to go swimmingly. And when you encounter resistance and problems, you need to hold your vision and drive through them. Failing to do so turns your change into a flavour of the day exercise and those are disastrous.
WOOD: One of the questions I have is how many of the daring strategic plans have actually successfully been taken through to fruition? Having been there a number of times, sometimes successfully and other times not, I would agree with Brian on the need for executive ownership along with the commitment and determination to see through the adversity. Without the commitment to accept the adversity, and to let people go who are not aligned with the new approach, irrespective of their tenure with the organisation, failure is guaranteed. From my perspective, if the executive doesn't have the determination and doesn't clearly understand the risks in defining a daring strategic plan, then they shouldn't embark on it in the first place.
Dwight Eisenhower said, "In preparing for battle, I've always found that plans are useless but planning is indispensable". Do you believe this statement applies to strategic planning in business?
KALIA: I totally endorse that statement. Some years our plan is fine. Other years there'll be some tectonic shift in the marketplace so our plan is useless; it has to be scrapped and we have to start again. What the planning process has done is make us all understand what our boundaries are and what our limits are in terms of capital resources - just what we have available to us to execute on even if we change our minds. A good example is back in 2000, when Centrica, our parent, purchased Direct Energy in Canada. We had to change the company's strategic plan based on the fact that Enron collapsed and a lot of states pulled back from plans to deregulate the energy market. The northeast blackout and the rolling blackouts in California also changed people's views on energy. All of those things happened at pretty much the same time and we still delivered on our financial promise to shareholders, but we had to deliver that in a totally different way because the markets were no longer behaving as we had anticipated.
KENT: I agree that the planning process is incredibly important, especially if you get buy-in from everybody and have them understand everything. I also think that the plan itself is important. Where I think it falls down is when you try to align the plan to some sort of calendar that doesn't make sense. We all tend to plan for the year; I don't know why. Plans change, so we need to set the plan for a realistic timeframe. Parts of your business might run on six-month cycles so you should have a planning process to lead you through that six-month cycle. If something happens in the marketplace that shortens or lengthens that, you need to get back in there and adjust it properly. Other parts of your plan, such as erecting buildings, take a longer time to do and you need a longer term for the plan.
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