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Unless commitment is made, there are only promises and hopes... but no plans.

Enlightened trial and error succeeds over the planning of the lone genius.

It is a bad plan that admits of no modification.

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Planning and control processes depress variance in favor of better near-term performance. Performance looks best when variance is limited, but that's a terrible place to be when things change.

If you're thinking strategically today, you need some way of keeping uncertainty alive and kicking, of maximizing rather than minimizing variance.

There is value in careful planning and thoughtful preparation. However, until there is execution, no plan is flawed; no preparation inadequate. Execution spotlights all. Cultures can get enamored with the preliminaries since there are no consequences.

Planning and control are Siamese twins. You can't have control if you don't have a plan, because the very definition of control is that you compare progress against your plan and take corrective action if you are off course. Another thing to remember, which seems counterintuitive, is that the more important a deadline is, the more important a plan becomes.

If you're an outsider, don't be ruled by plans. Planning is often just a weakness forced on those who delegate.

There are only two ways to get [substantially higher performance]. One, you can invent your way to success. Unfortunately, you can't count on that. The second path is to exploit some change in your environment-in technology, consumer tastes, laws, resource prices, or competitive behavior-and ride that change with quickness and skill. This second path is how most successful companies make it. Changes, however, don't come along in nice annual packages, so the need for strategy work is episodic, not necessarily annual.

Now, lots of people think the solution to the strategic-planning problem is to inject more strategy into the annual process. But I disagree. I think the annual rolling resource budget should be separate from strategy work. So my basic recommendation is to do two things: avoid the label "strategic plan"-call those budgets "long-term resource plans"-and start a separate, nonannual, opportunity-driven process for strategy work.

There is no doubt that planning through a hierarchical structure has significant advantages, such as breaking a complex problem into more easily solvable parts or enabling lower levels to respond more quickly to problems. However, hierarchical organization poses two major problems. First, while one or more areas may find local ways to improve planning and production, the net effect on the whole organization may be sub-optimal or entirely negative. A second problem is that different levels of a company may have incompatible objectives, which leads to inconsistent planning decisions. In this case, different levels can cancel out each other's adjustments, wasting resources and creating uncertain outcomes.

A plan is only a scenario, and almost by definition, it is optimistic. Any complex undertaking is subject to myriad problems – from technology failures to shifts in exchange rates to bad weather – and it is beyond the reach of the human imagination to foresee all of them at the outset. Although the probability of any one of these events could be low, the aggregate probability of something going awry can be high. As a result, scenario planning can lead to a serious underestimate of the risk of failure.

If you ask young men what they want to accomplish by the time they are 40, the answers you get fall into two distinct categories. There are those—the great majority—who will respond in terms of what they want to have. This is especially true of graduate students of business administration. There are some men, however, who will answer in terms of the kind of men they hope to be. These are the only ones who have a clear idea of where they are going.

The same is true of companies. For far too many companies, what little thinking goes on about the future is done primarily in money terms. There is nothing wrong with financial planning. Most companies should do more of it. But there is a basic fallacy in confusing a financial plan with thinking about the kind of company you want yours to become. It is like saying, “When I’m 40, I’m going to be rich.” It leaves too many basic questions unanswered. Rich in what way? Rich doing what?

There is a tendency in our planning to confuse the unfamiliar with the improbable. The contingency we have not considered seriously looks strange; what looks strange is thought improbable; what is improbable need not be considered seriously.

A common pitfall is tying incentive compensation, such as annual bonuses, to performance against a predetermined plan or budget. This inevitably leads people to restrain their aspirations for the business in order to make it easier to “beat plan.” In turn, this is interpreted as sandbagging by corporate headquarters or investors. The end result is a time-consuming, soul-destroying, and ultimately unproductive gaming of the planning and budgeting process. Instead, your plan should drive resources and actions that help you realize the full potential of your best strategy. Your budget should be a tool for controlling costs relative to revenue. Neither should be used for determining annual bonuses.

Given today’s volatile environment, the overall focus for planning must move away from precise forecasting and toward more strategic, top-down ambition-setting that is validated with bottom-up business insight. This approach should be tied to contingency plans in case the targets cannot be met—and complemented by more frequent short-term forecasts of key metrics. However, embracing unpredictability and encouraging entrepreneurship within reasonable limits entails a significant shift in the management culture of many large corporations.