STRATEGIC PLANNING
planning cycle under his supervision would lead to a
AT OLDELFTt
By Ron Meyer
It was September 16,1986, as Kees van Hoeven put the
final touches on the presentation he would be giving to
MBA students at the Rotterdam School of Management
the next day. As Oldelft's corporate planner, he had been
requested to give a lecture on the way strategic planning
had been implemented in his company since it was
initiated in 1979. Without hesitation, he had agreed to
come to the school, as he had good reason to believe
that this would be a stimulating exercise for the
students, as well as for himself.
For the students, he realized, Oldelft was an
interesting example of a relatively small high-tech firm
operating in a turbulent global market. The company,
with its head office situated near The Netherlands'
largest technical university in Delft, specialized in
products requiring advanced knowledge of optics,
electronics, electronoptics ("optronics"), and precision
mechanics. These products, with relatively short
product life cycles, fell into three categories, namely,
medical, defense, and industrial products. In all three
cases, Oldelft's competition was global and fierce. Van
Hoeven recognized that it would be of great interest to
the students to observe to what extent textbook
planning processes had been adapted to fit the needs
and constraints of such a company.
His visit to Rotterdam, however, was very interesting
personally as well. He had already played a prominent
role in guiding the 1985 planning cycle at Oldelft, but he
was now in charge of running "the circus," as the
planning process was generally referred to. Since the
tSource: This case was prepared by Ron Meyer as a basis for class
discussion rather than to illush.ote either effective or ineffective handling
of an administrative situation. Unless otherwise indicated, all
information was obtained with h e kind assistance of the Oldelh
company. Some names in the text hove been changed. This cose was
originally published as port of the strategic management course
Ondernemingsplonning I1 (Corporate Plonning) of the Dutch Open
University. Copyright O 1991 Open Universiteit Heerlen.
Oldelft strategic planning process was biannual, the first
final plan by the end of 1987. The first steps in this 1987
planning cycle would soon be taken, leaving him only a
short period of time to review the manner in which the
planning at Oldelft took place and to make changes
where needed. Thus he welcomed the opportunity to
exchange opinions on the strengths and weaknesses of
the Oldelft planning p b e s s with a room fuU of MBA
students. He was very:surious to hear what kind of
questions they would ask'hirn and what kind of possible
improvements they would propose.
The History of the Company
The Oldelft company was founded in 1939 by Oscar van
Leer as the "Optical Industry The Old Delft." In its first
years the company was quite small and specialized in
handcrafted optical products, ranging from magnrfying
glasses and microscopes to cameras. At a very early
stage, however, van Leer was able to lure an extremely
capable man away from Philips to lead lus company.
Tlxs man was A. Bouwers, an engineer with a passion
for research and development (R&D),who also proved
to be a highly motivated entrepreneur.
Bouwers committed a large part of his time and a
considerable portion of company funds to new product
development, which in 1945 led to the first prototype of
a photofluorographic camera with a concentric mirror
system. This product, which was finally introduced in
the market in 1950 as the Odelca, allows expensive full-
sized X-rays to be substituted by far cheaper postcard-
size ones. This product was a great success because it
made nationwide tuberculosis examinations financially
feasible.
Fuelled by his success, Bouwers maintained
his policy of remaining at the forefront of technological
innovation in the field of optics. In 1952, for instance,
Oldelft introduced advanced aerial cameras for both
low- and high-altitude reconnaissance. During this
period, Bouwers also followed an aggressive
 STRATEGY: PROCESS, CONTENT, CONTEXT
acquisitions strategy, buying up large numbers of
smaller optical companies. As one Oldelft manager put
it, "No Dutch company with the word 'optical' in its
name was safe."
By 1968, when Bouwers retired, Oldelft had
expanded to a company with a turnover of about Dfl35
million and more than a thousand employees. To the
satisfaction of van Leer and the small number of other
stockholders, Oldelft also proved to be very profitable,
with a return on investment (ROI) ranging from 8 to 20
percent. To ensure that Oldelft would remain equally
successful in future, Bouwers had also brought in an
experienced R&D manager from outside the company
to replace him. This was S. Duinker, head of the Philips
laboratory in Hamburg, who has remained president of
Oldelft since then.
The Years of Holding Course (1968-1975)
Duinker inherited a company operating in two very
different markets, namely, the medical and defense
markets. In the medical field Oldelft had developed
radio therapy equipment, in addition to its Odelca X-ray
cameras, and in the defense market Oldelft had
/ established itself with reconnaissance cameras.
Technology was the common theme linking these
products and underlying Oldelft's R&D projects. In the
late 1950s the company had supplemented its expertise
in optics and precision mechanics with knowledge of
I
the rapidly expanding field of electronics. The
! possibilities offered by these technologies by and large
1 determined the Uvust of OldeWs product development
A second major factor determining Oldelft's product
line was the breathing space left to it by larger
companies. A former member of the executive board
described the strategy Oldelft employed by using the
- analogy of a guerrilla fighter-4ldelft was small and
flexible, and only moved in areas left open to it by its
powerful competitors; yet it was ready to strike at these
opponents should weak points in their flanks show up.
Oldelft's relations to its competitors were, however,
not as antagonistic as this analogy might suggest.
Actually, the contrary was often hue, it being the case
that many competitors were also suppliers of Oldelft,
while others purchased important components from the
company. Philips, for instance, was simultaneously
competitor, supplier, and customer of Oldelft,
depending on the product in question. This meant that
Oldelft was very dependent on the cooperative
relationships i t was able to establish witn otner
companies. Oldelft's contacts were especially essential in
the medical sector, since OEM (original equipment
manufacturer) sales accounted for a large portion of
turnover.
Besides OEM sales, Oldelft's major medical
customers weie all professional users, mostly hospitals,
spread throughout the world, though concentrated in
Europe and North America. Although the medical
customers of Oldelft were easily identifiable, the
company's competitors were somewhat harder to
classify. Due to the highly specialized nature of the
medical products Oldelft sold, the company was in fact
operating in a numbfr of small segments of a
substant i d y fragmented':market. o a large degree, the
competitors Oldelft en&unter?d in each segment
differed in name, number, &d strefigth.
In the defense business the same held true. The
company had a small number 06 clearly identifiable
customers, namely, national governments of Western or
developing nations, while the market niches in which
the company operated were populated by a large
number of nondominant competitors. This was where
the similarities between the defense and medical
markets ended, however. The defense industry, in which
Oldelft participated, had characteristics all its own.
While the medical market could be said to be global
due to the low level of protectionism practised by
governments in this field, the defense market was quite
the opposite. Governments are usually extremely
hesitant to reward defense contracts to foreign
companies, even though they might pay lip service to
free trade. Moreover, in addition to discriminatory
procurement policies, many governments are actively
engaged in subsidizing and promoting nationally
produced defense goods as well. This put Oldelft up
against difficult competition in obtaining military
contracts abroad. Yet being a Dutch company with a
small home market, these foreign sales were essential
for Oldelft. The company was severely export
dependent, with 90 percent of its total turnover coming
from abroad.
The defense market was also risky due to its
sensitivity to shifting political winds. It is a Dutch law
that all military products leaving the country require
export permits, and these will not be granted if the
country of destination is at war. This made Oldelft's
exports vulnerable to political upheaval abroad.
Especially since the lead time of a sale and the
subsequent delivery can extend over a number of years,
CASES STRATEGIC PLANNING AT OLDELFT
it could happen that a contract was signed with a
country at peace and that war would break out before
the products could be delivered.
The lead time of a sale in the defense industry could
even be up to ten years in the case of new products,
introducing a variety of additional problems for a
' The Advent of Strategic Thinking (1975-1976)
company such as Oldelft. The length of this lead time
was due not only to the extra time involved in
producing and "debugging" new high-tech products
but also to the government study groups in which
defense contractors would need to invest years of their
time before even being awarded the contract.
Despite these drawbacks, however, Oldelft made
most of its profits in the defense market. Although
winning a contract could prove extremely difficult, the
margins on most contracts made all the trouble more
than worthwhile. Company figures actually suggest that
the medical products weren't profitable at all, although
it can be difficult to do proper analysis in a small
company. The medical products were retained, however,
for a number of important reasons. The defense business
tends to be rather cyclical and the medical products
could be used to counterbalancethis, for instance, when
planning production-capacity usage. Furthermore,
Oldelft learned that the technological spin-off from
medical to defense was considerable and could assist in
strengthening the company's competitive advantage.
Besides the potentially rich financial rewards, the
defense industry had a second attractive point. Military
customers were far more interested in the quality of the
product than in its price and delivery period. This was
to OldeWs advantage, since low cost and speed were
not company strong points, while product reliability
was a well-acknowledged Oldelft characteristic. This
was largely due to the company's perfectionist culture,
which was e s p e d y prevalent in the R&D department.
This culture ensured a product of high quality and
technological sophistication, yet also caused relatively
high costs, both in terms of time and money.
It should come as no surprise that the vice president
in charge of commercial affairs at the time expressed
mixed feelings about the Oldelft culture. While it did
fadlitate the development of highquality products, it
weakened Oldelft's competitive position in the price-
sensitive medical market. The perfectionist culture, with
its inherently long R&D lead times, also reduced
OldeWs ability to quickly enter new high-tech markets
not yet dominated by larger companies.
His concern was strengthened by the fact that by 1974
most of Oldelft's products were in a late phase of their
product life cycle, while there were few promising civil
products in the pipeline. At the same time, profits had
dipped, and the 1974 annual report showed the first loss
in years.
By 1975, this decline in the company's fortunes led the
executive board to point to a cost reduction drive as a
necessary step toward profit recovery. There was,
however, no staff group available at the time that could
do an overhead analysis. It was therefore decided to
institute a policy adyice coundl (Beleids Advies Raad,
BAR). This BAR was a voluntary group, mostly made
up of young aggre4ive manabers with new ideas who
wanted to update tbe rathe; conservative corporate
cutture. '. \
The BAR quickly b'btained status as it developed
beyond a costcutting group to a more general corporate
think-tank. Being attuned to the newest management
techniques, the BAR soon requested authority from the
executive board to look into the possibilities of setting
up a long-term planning approach, as this was one of
the latest management developments at the time.
The BAR'S initiative was accepted, and the seven-
man team embarked on the task of designing a large
scale planning approach for Oldelft. The corporate plan
they envisaged would be centered on turnover
projections for the next seven to eight years. Sales
managers would be asked to estimate the turnover they
expected in their areas of responsibility, making it
possible to synchronize all else to fit these forecasts. One
would be able to derive everything, from capital
requirements to personnel planning, h m these figures,
so that an overall business blueprint could be made.
This would nicely solve a large number of important
Oldelft problems at once, such as the need to level out
productioncapacity usage.
President Duinker was rather surprised by the
farreaching BAR proposal, as he had a far more
"visionary" company plan in mind. He had expected a
type of general SWOT analysis, followed by a number
of corporate objectives and policy guidelines. After a
period of discussion, however, a compromise was
struck, whereby both planning options would be
worked out.
By April 1976 Duinker's idea of drawing up a
document outlining the company's "objectives and
policy principles" had taken shape. This hefty paper set
out for the first time the company's long-term financial,
 STRATEGY: PROCESS, CONTENT, CONTEXT
social, commercial, and technological goals. It also laid
down the fundamental policy guidelines that would be
followed to achieve these goals. This was, in fact, the
company's first attempt at explicitly formulating its
mission and at putting to paper a number of its implicit
strategic choices.
The foremost goal stated in this document was the
primacy of continued independence over the goal of
growth- This had never been a topic of discussion, as
there had never been any reason to bring it up. It was
realized, though, that the external environment was
changing and that this would force the company to
choose. The concentration ratio in many market
segments was on the increase, and the funds needed to
develop new products was also growing. This would
put pressure on the company to merge or sell to a larger
competitor in order to maintain growth. The executive
board, however, clearly expressed that it would be its
policy to remain independent, with company shares
being widely spread.
While the intention was stated to periodically review
the outlined objectives and policy principles, practice
was that the document was neatly filed and rarely again
exposed to daylight. The documents on strategy that the
BAR in the meantime had been working on were going
to be concrete plans, including serious operational
targets. By September 1976 the first "strategic planning
round" was started to obtain'the turnover forecasts
needed to work out the rest of the plans. The* was but
one problem in the BAR approach. No sales manager
was willing to make a turnover prognosis eight years
into the future. The extrapolation of current trends, it
was realized, is dangerous in any case, but the
unpredictability of the markets in which Oldelft
operated made estimating impossible. The technological
advances' were seen as too fast and the number of
competitors too unpredictable to even come close to an
educated guess. No manager was willing to stick out
his neck and try. The result was that the discussions
dragged on and on, while very little was actually
achieved.
The Impending Crisis (1976-1978)
In the meantime Oldelft's fortunes were slumping. In
1975 the company had been able to recover from the
1974downturn, but by mid-1976 a sharp decline in sales
had set in, and the short-term sales forecasts had taken a
for the worse. BYlate 1977 it had become obvious
that dramatic action would be necessary to prevent
large-scale losses in the following years. An "action
plan" was drawn up to reduce overhead costs quickly.
This plan led to a severe cutback in production capacity
and consequently to a reduction in the workforce from
1600 to 1300employees.
It was realized, however, that these short-term
savings would not be sufficient to ensure the continued
viability of the company. There were a number of more
fundamental problems that would have to be addressed
as well. First, there was "serious doubt whether the
present organizational structure, personnel and
pmedures would still fit the expected smaller scale of
the company and whether they, in general, would be
able to handle the commercial, technifal and socio-
economical problems." Second,:it was rgogruzed that it
was "no longer self-evident %t in the'coming years
Oldelft would be serving the m e markets through the
same distributing channels with the same products,
developed and produced in the same way as before."'
The executive board decided to thoroughly reexamine
both the structure and strategy of the company. To assist
in this difficult process of self-analysis, the consultancy
firm of Arthur D. Little (ADL) was called in.
The Introduction of Strategic Decision Making
(1978-1979)
ADL started the two-front study in May 1978, looking
both at the organizational structure of Oldelft, and at
the strategy and the strategy-formulatingprocess of the
company. This large team of mostly American
consultants was lead by John Niemans. It was his main
task to teach this technology-oriented company to think
in market tenns and to develop its ability to effectively
engage in strategic decision making. This was quite a
challenge, one Oldelft manager later recalled, as
Niemans had little to build on. Strategic thinking was
still in its embryonic phase at Oldelft, and most strategic
decision-making concepts were new to the company's
management.
By mid-1979 ADL had largely completed its task of
reorganizing and reorienting Oldelft. This year-long
process had led to a high number of important changes
. - For instance, certain products were
within the company.
phased out, an important development program was
cancelled, explicit make or buy decisions were made,
and the company decided to substantially strengthen its
'Drawn from on internal company document announcing the hiring of
ADL consultants.
CASES STRATEGIC P L A N N I N G AT OLDELFT
position in electronics. Furthermore, strategic business
units were impleinented, in part to improve strategic
decision-making ability.
Niemans had also given Oldelft the tools with which
it would be able to carry out strategic planning on its
own strength in future. He had given them a
methodology and, in fact, had dragged the company
through its very first strategic planning cycle. Not
surprisingly, he also stressed the necessity for Oldelft to
retain its ability to engage in strategic decision making.
His advice, however, was not more conclrete.
The First Attempts at Strategic Planning
(1980-1981)
In 1980 the executive board decided to appoint the one-
man market research department, presided over by the
vice president for commercial affairs, as the coordinating
body for the ~or~orate'strategic planning process. Mr.
Verkade from this department was given the task of
leading the first independent strategic planning cycle,
generally along ADL lines.It was his opinion, however,
that the ADL method was far too extensive to be
irnplementable on a regular basis, so he introduced a
simplified form. Before he could start with the actual
process, though, Verkade left the company and was
replaced by Mr. Jansen.
In the meantime, the last ADL people were finishing
up their .jobs of assisting in implementing the
organizational changes, and Oldelft personnel were
finally settling into the new situation. The years of
upheaval, change, and uncertainty had left most
employees with a desire just to get back to work. So
when Jansen called on managers to participate in
strategic planning meetings, very few had the time or
the motivation to attend. The attractiveness that strategic
planning had enjoyed due to its newness had also
evaporated, making it even harder to get managers to
come to planning sessions, espeaally since the sanctions,
for nonattendance were benign.
As gradually more and more managers dropped out
of the strategic planning discussions, Jansen filled this
vacuum by d ~ i n gtheir strategic analyses for them.
Within a short period of time, however, this task had
become a full-time job, as the participation rate dropped
ever lower. Jansen was pressed to write on and on. But
as the company was actually far too large for one man to
analyze, he got caught up in an endless writing process
and never did catch up with the detailed facts. He was
forced to g e n e r a , and his analyses soon became too
superficial for the Line managers to consider seriously.
S these managers to dismiss strategic planning as
T ~ Iled
a waste of time, jushfylng wholesale abandonment of
meaningful cooperation. In this manner, in not more
than a few months, Jansen had become isolated, and
strategic planning had become nothing more than a one-
m m academic exercise.
The First Successful Independent
Strategic Planning Cycle (1981)
During the same period, in 1981, ,the workers' council
(Ondememings Raad) proposed to have the head of the
1978 ADL team, John Miemans, appointed to the
supervisory board. The executive board agreed, and
thus invited a well-informed and outspoken person to
join the company. Niemans, of course, was very
interested to find out to what extent his
recommendations had been canied out by the company.
He was disappointed to see the strategic planning
process being carried out so poorly.
The executive board agreed with this critique and
took firm action to ensure that by the end of 1981 the
first independent strategic planning cycle would be
completed. The responsibility for accomplishing this
was given to a man with more experience and weight
than Jansen, namely, to the head of the comrneraal staff
offices, Ab Baas. Compared with most other Oldelft
managers, Baas had a strong background in company
planning, as he was one of the driving forces behind the
old BAR. He also had a reputation for getting things
done and, unlike Jansen, had the wholehearted backing
of the executive board to strengthen his position. To the
line managers it was clear that participation in the new
planning cycle was no longer voluntary, but
compulsory.
Baas introduced a planning process almost totally
along ADL lines. This combination of both bottom-up
and topdown approaches has, to this day, remained the
way in which Oldelft conducts its strategic planning.
This process consists of four general steps, namely:
the drawing up of situation analyses per business seg-
ment of the business units;
the formulation of plans and options per business seg-
ment;
the evaluation of all plans and options by the com-
pany's top management;
 640 STRATEGk PROCESS, CONTENT, CONTEXT
1.
...
I .
the communicationof the decisions taken to all relevant
personnel.
The Situation Analyses
Baas introduced a hard-nosed approach to obtaining the
relevant data on the business segments' external
environments. He started by handing out ahnostempty
booklets to the five business segment managers. The
only things printed in each booklet were the headings
on each page denoting what the managers should put in
the space below. It was the duty of these line managers
to hand the booklets back in with all the pages filled.
The amount of information Baas requested from each
business segment was extensive, and it was the
responsibility of each manager to gather all relevant
data himself.
A completed situation analysis was made up of two
key elements, namely, an analysis of the industry's
maturity and a weighing of the business segment's
competitive position, which together determined the
company's strategic position. The industry's maturity
was ascertained by analyzing current and expected
trends, threats, opportunities, market segmentation,
customers, technological change, market growth, and
growth potential. This analysis would place the
FIGURE 1
Strategic Option Zones
industry's maturity somewhere on a continuum from
embryonic to aging (see figure 1).
The company's
- - competitive position in each product
market was determined by comparing 0ldeift to its
competitors on a large number of fronts. This
assessment paid attention to differences between
companies, as well as between products. Companies
were checked for their strengths and weaknesses, for
instance in the areas of R&D, finance, service and sales.
Products were compared on the basis of price, quality
and features. Together with the figures on the relative
marketsham, this information placed each competitor
somewhere on the continuum from weak to dominant.
In the ADL approach the industry maturity
continuum and the competitive dosition continuum
form the two axes of the strategic position matrix,
displayed in figure 1. The'sh-ategic position resulting
from this whole situation analysis is the most important
factor determining which strategies should be
developed for each business segment in future.
This whole process of establishing the business
segments' strategic position was a complex, yet vitally
important, first step in the planning cycle. To e n s m the
quality of the business segment managers' output, Baas
held a number of meetings with each manager on his
situation analysis. Baas invited all other Oldelft
CASES STRATEGIC PLANNING AT OLDELFT
managers who had a stake in the business unit to attend
these meetings as well, as broad input usually increases
the accuracy of an assessment. Besides the business
segment manager, Baas also requested the presence of
product managers, sales managers (from home and
abroad), plant managers, project managers, production
coordinators, development unit managers, as well as
relevant staff members and an occasional external
consultant. On average, between ten and fifteen
participants came to each meeting.
Plans and Options
Once the situation analyses had been completed, the
business segment managers were asked to evaluate past
plans and to supply new plah and options. These new
plans, Baas made clear, were to be developed using the
strategic position of the business segment as a reference
framework.Just as with the situation analysis, a number
of meetings with a broad, representative group were
held to discuss and finalize the proposed plans.
After all the meetings with the business segments
had been concluded, it was Baas's task to reorganize all
information into a presentable form. To facilitate
decision-makingby the companfs top management, it
was also necessary for him to "translate" the business
segments' options into comparable financial figures and
to add a risk analysis to each of them. After considerable
rewriting, this resulted in five business segment
discussion papers, which were subsequently.handed to
top management.
The Corporate Scrums
These business segment analyses were the main input
into the "corporate saums," as the strategic decision-
making discussions among the top managers are called
in ADL-speak. The other two inputs provided by Baas
were a financially and strategically consolidated view of
the whole corporation and a socioeconomic analysis of
the outside world.
In total, three strums were programmed to reach
agreement on the strengths and weaknesses of the
corporation, general goals, corporate strategies, business
strategies, action plans, and resome allocation within
the company. In each meeting there were ten to twelve
participants, including the president of the company,
the executive vice presidents, the so-called directors
(heads of the most important departments and business
units), the company controller, an ADL consultant, and
Baas himself. &&Is<rum lasted two to three days and
was held outside the company offices to ensure that
day-to-day business would not divert attention from the
discussions at hand.
The first scrum evaluated past strategies and
discussed strategic issues and financial performance.
The second scrum drew conclusions about strategic
issues and decided actions, strategies, and resource
allocation to the business segments. Finally, the third
scnun was dedicated to a discussion on socioeconomic
analysis and the corporation's strengtlk, weaknesses,
and general goals. This last s a u m concluded with the
selection of corporate strategies for the coming five year
period.
While the planning hdrizon employed was five years,
the emphasis of the plans was onithe first two. Actions
and resource allocatiod especially focused on the first
two years. This was due;fo Baas having scheduled the
following planning cycles,to take place on a biannual
basis (in 1983,1985,1987, and so on).
The Post-Scrum Booklets
After this decision-making procw had been completed,
Baas wrote up post-scrum booklets for each of the
business segments. These documents each contained a
finalized situation analysis, a list of the decisions taken
on the business segments's proposed strategies and
action plans, a forecast of the financial results for the
next five years, and a specification of the amount of
R&D resources allocated to each business segment.
These booklets were subsequently sent to the ten to
fifteen managers involved in the strategic planning
process for each business segment. It was up to these
managers to implement the plans along the generd lines
set out in each booklet. Besides these business segment
booklets, Baas also drew up a consolidated booklet for
the whole company, as well as a summary for staff
personnel and the workers' council.
There was no formal review procedure built into the
planning system. Managers were expected to act
according to the plans, yet retained the flexibility to
deviate from the plans if the circumstances arose.
During this whole process, which Baas was able to
conclude by the end of 1981, occassional ADL support
was called in, as no one had real expertise in "running
such a show." Baas himself especially had few
pretensions. It was typical of his style that he avoided
the title of corporate planner, as he argued that he did
not plan, but merely facilitated, the planning process.
With a wink, he opted instead for the title of "circus
director."
 STRATEGE PROCESS, CONTENT, CONTEXT
The Acceptance of Strategic Planning
While in 1981 the strategic planning process at times
might have resembled a time-ring circus, by the third
planning cycle, concluded in 1985, it had become well-
rehearsed corporate practice. Gaining the acceptance of
these production- and technology-oriented managers
was a challenge for Baas. It was very difficult for him to
motivate people to think and operate strategically, not
only during the planning sessions but especially
afterward. It was not only the corporate culture that
frustrated Baas's attempts to gain acceptance for
strategic planning but also the absence of both carrot
and stick. There was no reward system geared to
encourage participation in and compliance with the
plans, nor was there any formal mechanism to control
the managers' execution of them.
Despite these problems, by 1985 Baas had been able
to embed the planning process in the company's way of
running its business. By then, all fifty-odd participants
had grown accustomed to the way Baas had
implemented the ADL approach to strategic planning,
and they had gotten used to the timetable Baas had
drawn up for them to meet. This planning process
timetable was spread out over a period of
approximately one year. Baas started the process during
November and used the period up until April to
complete the pre-scrum booklets. The corporate sclrums
were subsequently planned for May and June. The
period up until October was then used by the planning
staff to draw up the postscrum booklets for the business
units (BUS),staff, and the worker's council.
Although Baas was the only person in the
organization involved in guiding the planning process
on a full-time basis, he was assisted during the busiest
periods by three to four others. During the 1985 process,
though, he did have a permanent assistant, namely, his
young successor-to-be, Kees van Hoeven. Shortly after
the completion of the third planning cycle, van Hoeven
took over as corporate planner and Baas was promoted
to head of the defense products business unit (see
figure 2).
The Fourth Strategic Planning Cycle
With the fourth planning cycle slated for completion by
October 1987 and with a lead time of about one year,
van Hoeven's visit to the Rotterdam School of
Management on September 17, 1986 was ~ d going y proposals within the executive board would have
to be on the eve of the next planning period. He would
be planning for a company that had changed somewhat
since the days of the ADL studies. One important step
had been the divestment of two noncore businesses,
namely, Cine (film-cutting equipment) and Deltronics
(medical equipment merchandizing). This left Oldelft
with two remaining BUS. The medical products BU was
made up of three business segments, namely X-ray
(OEM), radio therapy, and,ultrasound, while the other
BU comprised the defense products.
All these products could be said to fit the "mission
definition," formulated during the ADL consulting
period, which was to "reveal the invisible." However,
Oldelft did not feel restricted to a narrow interpretation
of this mission, since it acted more as a good slogan that
fit the range of products than as a p d m g principle. In
practice the company let itself be guided by the
technologies involved in making certain products. Its
lack of apprehension in interpreting its business-
defining statement less strictly was demonstrated in
1984, when a new BU, industrial products, was created,
and the Seampilot was introduced (see figure 3). This
laser-based seam-tracking system for arc-welding
automation employed the unique combination of
optronics, electronics, and precision mechanics in which
Oldelft specialized.This diversification into another civil
market, it was hoped, would help offset the
destabilizing influence of the irregular large-scale
defense contracts.
The introduction of the ACAL gas detection system
in the same year entailed a further widening of the
mission definition interpretation. This system for nerve
gas detection actually "reveals the unsmellable" and
hence seems to fall outside Oldelft's traditional imaging
business. The ACAL technology, however, is based on
optronics' ability to idenhfy discolorations caused by
the gas and as such can be said to fall within a wider
interpretation of "revealing the invisible."
Besides new products, another important change was
that of the company's fortunes. Since the ADL studies
Oldelft had recovered its former profitability, with its
return on equity ranging from 5 percent to a high of 37
percent (see tables 1 and 2). These results had allowed
the company to increase its R&D expenditures, and a
number of promising new products had been
introduced into the market.
Van Hoeven's position, too, was about to change.
While he was still a member of the commercial staff
office, as Baas had been, it had become obvious that an
organizational reshuffling was in the making. The
almost all commercial staff reporting under the
CASES STRATEGIC PLANNING AT OLDELFT

FIGURE 2
Proposed
Board of Management OrganisafionChart
A. C. van Rhee R. V. Kingsma S. Duinker D. D. Buthker (as of January 1 , 1987)
Vice President Vice President President Vice President
Finance and Technical Commercial
Accounting Affairs Affairs

1 Japan

individual business units instead of under the vice
pmident for commercial affairs, Buthker, as now was
the case. One of the few exceptions would be corporate
planning, which would then no longer be reporting to
the head of the commercial staff, but, rather, directly to
the vice president for commercial affairs.
One of the things that was not altered much over the
years was the company's approach to the planning
process. Baas's attention during the first planning cycles
had mainly been focused on getting strategic plans
made. As mentioned before, he also exerted
considerable effort at overcoming organizational
resistance to planning and spent much time
encouraging the highly product- and technology-
oriented managers to think strategically. Only now that
strategic planning had become more or less accepted
was the time opportune for van Hoeven to review the
planning methodology and implement improvements.
Hence, he welcomed the opportunity to exchange
opinions on the strengths and weaknesses of the Oldelft
planning process with the students and professors of
the school. He was very curious to hear what kind of
questions they would ask him and what kinds of
possible improvements they would propose.