Articles
Elephant hunting
By Andrew Cornell, AFR Boss Magazine, October 2008
Myer may have Jennifer Hawkins, Bonds has Michael Clarke but in corporate Australia there is probably no better brand ambassador than Michael Chaney. There he is, the chairman of National Australia Bank and Woodside Petroleum, the architect of the modern Wesfarmers, once billed as Australia's most admired CEO, delivery a testimonial on the website for the Argenti System.
"I am firmly of the view that the Argenti Planning System has played a key role in [Wesfarmers' success]," quoth Chaney.
The Argenti System or, more fully, the Argenti System of Strategic Planning and Facilitation Services, is the construct of Englishman John Argenti, now in his 80s but still involved in developing the system.
His system was the result of "painful trail and error", he tells AFR Boss. "In 1963 I was asked by my then employers to introduce corporate planning into their company. As there were no books I asked five top UK companies how they were doing it. I got five different answers including 'don't know'. So I prepared a plan and presented it to my board. Straight in the bin! My later attempts were sufficiently improved for me to publish Corporate Planning - A Practical Guide in 1968. It was only the third book on corporate planning in the world."
Since then Argenti has written 10 books and innumerable articles on corporate planning. The essence of The Argenti System is that it is self-inflicted - no team of consultants piles in armed with the distilled intellectual capital of other clients. The system is willfully big picture.
Indeed, Argenti is famous for his "elephants", the big strategic issues (he maintains there are never more than six in any company). Get them right and the smaller issues will fall in line. Get them wrong and smaller issues will be the least of your worries. "Do not have consultants do the planning, or even worse, sell you a ready-made strategy." Argenti exhorts, "Do not make a long list of SWOTs [strengths, weaknesses, opportunities, threats]. Instead make a very short list. Remember you're hunting strategic elephants, a rare species. Do not develop more than six strategies; any more will take you out of strategy into tactics and the complexity will confuse you."
The Argenti tablets are not all prohibitive. Argenti says a gap analysis - to grasp the scale of the strategic leap necessary from where a company it to where it needs to be - is a must.
"We offer extensive check-lists to show how to link up forecasts with strengths and weaknesses to create a set of strategies that are tailored to the elephants," Argenti says.
Chaney says the system suits his belief in "logical incrementalism". "The future is unpredictable. You have to grab yourself the right people and the right balance sheet to take advantage of the opportunities as they have emerged," he says. Chaney's five Argenti points are: what do we exist for? What's our main objective? How have we done in the past? How will we fare if we keep doing what we are doing? What are our strategies to achieve the targets we have set ourselves?