Edward Herzstock - Why Do Some Companies Ignore Strategic Planning?

Many businesses do not engage in strategic planning and those that do so in a poor and ill-conceived manner. The following are some of the causes behind these firms' terrible state of affairs: The main and most important cause for inadequate strategy is a lack of strategic management experience, which is attributable to a scarcity of experienced managers and executives, as well as the presence of individuals who do not comprehend strategic management.- Edward Herzstock

 The next factor is the ineffective reward system in existence, which rewards success but punishes failures.

Top management does not have the time or energy to engage in strategic management since a business is continually battling fires, which means it is engulfed in internal problems. This is frequently the situation in many businesses, where a lack of coherence and control in organizational processes means that the majority of time is spent addressing problems rather than preventing or solving them.

Some companies believe that strategic planning and strategic management are a waste of time because they believe they can handle longer-term imperatives by doing things the same way they have always done them-Edward James Herzstock. This is typically the case with companies that have been around for centuries, with new management believing that "if it ain't broke, don't repair it. In a similar spirit, many organizations, particularly those that have been successful, see little sense in developing novel strategies because their position is secure and they are satisfied with their achievements. As the case of Nokia, which fell from market leader to bottom in a few years, demonstrates, success fosters arrogance.

Many managers believe that because they "have been there, done that," they can weather any storm. This mindset, however, is unproductive because it is vital to plan for the unexpected, and formal models of strategy must be developed because experience is not always the greatest guide. This is especially true in the present period, as the digital revolution has altered the game's laws.

One of the major reasons why companies avoid strategic management is their fear of the "unknown." They overlook the fact that, exactly because of the unknown and unexpected, they must plan ahead of time. Furthermore, the managers' capacities to learn new skills, their proficiency with new systems, and their ability to take on new roles may be questioned.

Finally, the lack of consensus and differing perspectives about what a successful strategy should be is another key reason why organizations and their managers do not engage in strategic management.