Making strategic planning work: A case study of Countrywide Financial

ArticleinHandbook of Business Strategy 7(1):187-193 · December 2005with40 Reads
DOI: 10.1108/10775730610618800

    Abstract

    Purpose – Strategic planning is a misunderstood and maligned managerial tool. Most organizations have tried it but relatively few actually achieve success in strategic planning. Design/methodology/approach – The experience of Countrywide Financial Corporation demonstrates how strategic planning can be used as a key lever for change and describes the benefits that accrued to it through this process. Stanford Kurland, the Company’s COO, engaged Eric Flamholtz to assist with developing a more sophisticated approach to strategic planning at Countrywide. Flamholtz introduced: a template for organizational assessment and development; and a systematic process for strategic planning that had been applied elsewhere with considerable success. The new planning process s became a corporate priority. Findings – The planning system has also led to a variety of other significant organizational benefits including: a constructive forum for elevating management’s focus from tactical and operational concerns to broader strategic challenges; a shift away from a “silo mentality” to a “Countrywide perspective”; a clear set of priorities to guide operating unit activities and decision-making; measurable objectives that emphasize linkages across organizational boundaries; and greater understanding and communication of the plan throughout the organization. Originality/value – Kurland was focused on longer-range issues for the company, but most of the other members of Countrywide’s senior management were more focused on short-term competitive success in their own divisions. It led to significant changes and benefits at Countrywide, including a strategic shift in corporate direction.