Rumelt on strategy (III): Dudes, don't confuse budgeting with strategic planning

One of the themes of Richard
Rumelt's book
on strategy is that strategy is about confronting problems, not covering them
up. "If you fail to identify and analyze the obstacles, you don't have a
strategy. Instead, you have either a stretch goal, a budget, or a list of
things you wish would happen."

Rumelt argues
that most corporate strategic plans are simply long-term budget plans, not
coherent strategic approaches. "You can call these annual exercises 'strategic
planning' if you like, but they are not strategy. They cannot deliver what
senior managers want: a pathway to substantially higher performance. To obtain
higher performance, leaders must identify the critical obstacles to forward
progress and then develop a coherent approach to overcoming them."