FAQ  #2. Aren’t financial plans and strategies useless? Why not to focus instead on tactics and improvisation in a world where we have to respond to new challenges all the time?

There is a lot of truth and validity in the view these questions express, … and also I lot of misunderstanding. If someone interprets plans and planning as guarantees for wonderful outcomes and perfectly clear ‘manuals to the future’, I feel inclined to shake those interpretations myself. My point is that we do not have to, and we shouldn’t, think in terms of the extremes of perfection versus uselessness.

Yes, plans are not more than imperfect guides, and they should be revised even in that role from time to time. Life brings about brand new decision making situations all the time, and we necessarily improvise a lot. However, improvisation informed by, among other things, plans - or rather: previous planning processes - has arguably better chances for success than another without this input. In the spur of the moment, it is easy to get bogged down with tactical considerations, because they are visible, direct, and immediate. On the long run, and in a broader perspective, however, strategies matter more than tactics, … and strategies cannot be improvised. The presence of good strategies offers better chances for improvisation because it implies previous learning, exploration, value clarification, prioritizing, etc. In other words, the right attitude is not of an ‘either … or’ nature: either plans or improvisations, or either strategy or tactics. These contrasting aspects should be balanced all the time.

Sun Tzu, ancient Chinese writer of ‘The Art of War’, ranked and contrasted strategy and tactic this way: “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” If we want victory, we need strategy; if we want to achieve it fast and efficiently, we need tactics as well. Tactics alone won’t do the trick. (It reminds me of the occasional big hits of stock pickers.) Not that I’m a militaristic person, but here is another quote from a general, US President Eisenhower, that in a somewhat oversimplified way but succinctly expresses the essence of how I think about planning: “Plans are useless, but planning is indispensable.” I see value in plans as well, provided we treat them what they are: as snapshots, the documentation of certain stages on a journey, as oppose to canned ready-made solutions.

Using another metaphore: with smart improvisation and tactics, we can run fast and efficienly, … but perhaps to a completely wrong direction or destination. It is important to do things well, but it is even more important to do the right things.