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IBM's Continuous Strategic Evolution: Constant Planning for Rapid Innovation

Author: Naomi Steinberg
Published: April 9, 2002
Ref. Number: CS0002
Pages: 7

In 1996, Louis Gerstner, then president and CEO of IBM, set his sights on radically revamping the company’s existing strategic planning and execution practices and policies. At that time, IBM’s corporate strategy processes resembled those of most corporations, with several annual planning activities.

In overhauling the program over the next several years, IBM’s executives and marketing leaders concentrated on five critical objectives:

  • Designing a strategic issues review process that focuses outwardly on economic and technology issues rather than on internal organizational concerns
  • Ensuring that strategic planners focus directly on the critical implications, risks, and tradeoffs inherent in strategic alternatives
  • Structuring an ongoing process to keep top executives focused regularly on fundamental strategic challenges and opportunities and not just on operational issues
  • Connecting strategic planning directly to resource allocation decisions, thereby keeping implementation at the center of the planning process
  • Promoting widespread support and involvement in the entire process

Today, strategic planning at IBM looks quite different than it did in the late 1990s. A continuous strategic planning process involves ongoing review of major issues and executive decision making on a twice-monthly basis. “Deep dive” research initiatives enable the firm to fully explore a new challenge or opportunity, develop a strategy, and allocate resources within 30-90 days. With economic (and political) upheaval, technical innovation, and competitive initiatives happening rather more frequently than annual strategic reviews, IBM’s continuous strategy evolution enables the firm to act and react more quickly than most to critical market challenges and opportunities.

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