Strategic plan: if it never changes, it has stopped working

In the video, in Italian, I say that a strategic plan identical to itself after a year has stopped working, and I quote the French physiologist Claude Bernard. Here I tell what Bernard discovered by observing seeds, marmots and warm-blooded animals, and why his lesson helps us understand what must stay fixed in a strategy so that everything else can move.

Video transcript (translated from Italian)

A strategic plan that stays identical to itself after a year is not a good plan. It is a plan that has stopped living.

Strategy is a living organism. It reacts to its environment, adapts to change, absorbs the unexpected and turns it into new directions.

Markets change. People change. Technologies, regulations, the balance of power: everything moves. And the strategic plan has to move with them.

This is not a flaw. It is strategy that works.

Changing direction does not mean you started out wrong. It means acting intelligently in a context that does not stand still.

Companies that fear a change of course confuse consistency with rigidity. But real consistency is not standing still: it is holding the direction while adapting the path.

Claude Bernard, the great nineteenth-century French physiologist, discovered that an organism’s stability depends on its ability to regulate itself continuously from within. He called it the milieu intérieur.

That is exactly what a good strategy does. It changes on the outside to stay solid inside.

For Bernard, the free organism is the one that keeps its inside constant

In 1878 Claude Bernard published in Paris his lectures on the phenomena of life common to animals and plants, and in the second lecture he divided living beings into three groups, according to their relationship with the outside environment. Latent life is that of seeds, which can stay suspended for years. Oscillating life is that of plants and cold-blooded animals, which slow almost to a stop in winter, and of hibernating mammals such as the marmot and the dormouse. Constant life, which Bernard also calls free life, is that of warm-blooded animals, active in any season.

A strategic plan identical to itself after a year has stopped working.

What makes the third form of life free, Bernard says in the line he is remembered for: “La fixité du milieu intérieur est la condition de la vie libre, indépendante,” the constancy of the internal environment is the condition of free, independent life. A warm-blooded animal, he writes in an image that sticks, is an organism that has put itself in a hothouse.

In the video I say Bernard called the ability to regulate oneself from within the milieu intérieur. More precisely, the milieu intérieur is the internal environment, the blood and fluids in which cells live. Bernard’s discovery is that keeping it constant frees the organism from dependence on the outside world: the marmot sleeps because its inside follows the winter; the warm-blooded animal stays awake because its inside does not.

Stability is work that never stops

Almost half a century later, in 1926, the American physiologist Walter B. Cannon gave that work a name: homeostasis. In his 1932 book The Wisdom of the Body he shows how much effort constancy takes. Blood sugar normally sits around 100 milligrams per 100 cubic centimeters (that is, per deciliter): below 70 problems begin, and around 45 come convulsions and coma. The body stays within that narrow band because it corrects continuously, in one direction and the other.

This is the point that matters for a company. The stability Cannon describes is the result of small, frequent corrections on what matters, and it has nothing to do with standing still. An organism that corrected nothing would not stay stable for long, and the same goes for a plan no one reviews.

What stays fixed in a strategy, and what moves

Translated into a company, Bernard’s lesson raises a question that comes before all the others: what must be held constant so that everything else can change.

In my work the answer is shorter than people expect. What stays fixed is the direction, meaning where the company has decided to go, and the criteria by which it chooses, written with the owners. What changes are the priorities of the coming months, the order of the steps, sometimes the people involved.

To work, the criteria must be concrete enough to decide a real case. A company might write, for example, that it does not enter a market where it cannot reach the top three, that no customer should account for more than a fifth of revenue, that a new product must stand on its own within two years. These are examples, and every company has its own. But it is sentences like these, more than grand values, that act as the internal environment: they stay fixed, and they let you change everything else without losing your way. That is why the strategy changes during the work and the plan is reviewed month by month, in our weekly meetings.

Changing the path does not mean you started out wrong: a strategy’s consistency is holding the direction; rigidity is never touching the path.

Companies that fear changing course confuse the two. They mistake the plan for the direction, and they defend the plan convinced they are defending the direction. Rigidity in the face of change is also one of the most common project manager mistakes: in projects as in strategies, whoever never touches the path ends up losing the destination.

The rigid plan and the oscillating plan make the same mistake

Bernard’s classification also reveals a mistake I do not name in the video, the opposite of rigidity. Oscillating life follows the outside environment in everything: it slows when it is cold outside and starts again when the warmth returns. A plan can oscillate the same way, changing with every piece of news, every competitor’s move, every bad quarter. It looks like flexibility, and it is dependence.

In small and mid-sized companies this second mistake is as common as the first, and harder to see. A plan that changes every time the owner comes back from a trade fair, or is rewritten after every call from the biggest customer, gives the impression of a responsive company. In fact its direction is decided by whoever is on the phone.

The rigid plan and the oscillating plan have the same origin: no one has decided what to hold fixed. The first touches nothing because it does not know what it would be legitimate to change; the second touches everything because it has nothing to defend.

Whoever runs a company decides first what stays fixed, the direction and the criteria for choosing, and only then what can change.

A caveat on the analogy, best stated before the reader does. A company is not an organism, and Bernard’s lesson holds for the mechanism, not the biology: a warm-blooded animal does not choose what to keep constant, a company does. That choice is the heart of the work of whoever runs it, and it is the part I work on with the owners in direction and priorities, together with the tools that give shape to a business strategy.

What to do and what not to do

• Write down with the owners the direction and the criteria for choosing: these are the things to hold fixed.
• Review the plan at fixed intervals, every month or every quarter, and change what no longer holds.
• Distinguish each time between a change of path, which is normal, and a change of direction, which is a decision for the owners.
• Do not defend a plan just because it was approved.
• Do not change the plan with every piece of news: a plan that follows everything leads nothing.

Sources

• Claude Bernard, Leçons sur les phénomènes de la vie communs aux animaux et aux végétaux, vol. I, J.-B. Baillière, Paris, 1878, second lecture, pp. 67–113 (the quotation on p. 113). https://archive.org/details/leonssurlesp01bern
• Walter B. Cannon, “Organization for Physiological Homeostasis,” Physiological Reviews, 9 (3), 1929, pp. 399–431; The Wisdom of the Body, W. W. Norton, 1932 (revised edition 1939, chap. VI).