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"A goal without a plan is barely a dream!"
INTRODUCTION
Strategic planning must be carried out within a logical framework. Because
this article is not intended as a workbook, I will not attempt to establish
the techniques or steps to be used in planning. From an introductory
point-of-view, to do so would only detract from the overall picture.
THE NEED FOR PLANNING
Strategic planning is the basis for successful management action. At the
same time, effective planning greatly simplifies the manager's task because
it integrates and coordinates effort. In short, if we know where we are
going, we are much more likely to get there.
Planning also allows us to make the most effective and efficient use of
people, facilities, and money. Planning makes it possible to let our people
know what is wanted of them and gives them an opportunity to participate in
the decisions being made. In turn, this involvement keeps interest and
enthusiasm high and enables management to incorporate into its plans the best
thinking of those closest to the action.
BARRIERS TO PLANNING
Bernard Baruch once said, "One of the greatest sources of failure
in business is the failure to plan." This failure is almost always
due to identifiable planning barriers — barriers that can be anticipated and
overcome:
- Some managers
emphasize everyday operations first and, in the process, push
their planning efforts into the background. The more time they spend putting
out fires, the less time they have to make the plans that would
prevent the fires. This failure can be avoided only by making a
conscious, positive attack on the planning work that must be done.
- The future may
be uncertain. Some managers actually feel that planning wastes
time because they cannot determine precisely what is going to happen in
the immediate and long-term future. However, the plans we make today are
the best way to control the future and not be controlled
by it.
- Planning can be
difficult and frustrating work. True, planning must be careful,
precise, and analytical. And true, the successful planning session will
prosper only to the extent that imagination and intelligence can be
brought to bear on it. But these excuses do not justify lack of
planning.
- Psychological
hazards also come into play when planning. Three such hazards are:
- The
imagination of a human being is conditioned by past experiences.
As a result, plans are often confined to assumptions based on
the past experiences of the planner(s).
- Often
"assumptions" used in a plan are mistaken for
"facts." This is not to say that assumptions are bad
and, therefore, should be avoided. But planners should not fool
themselves by believing that their assumptions are facts.
- People are
often reluctant to accept the unpleasant. If planning uncovers
disagreeable factors, planners should concentrate on accepting them and
adjust their plans accordingly.
PRINCIPLES OF PLANNING
Several principles apply to all
aspects of planning. These principles can help guide you in selecting
your most effective planning alternatives:
- TODAY'S DECISIONS
TEND TO LIMIT TOMORROW'S ACTIONS
Plans and decisions we feel compelled to make today
greatly restrict our potential in the future. For example,
product plans we make this year will, to a great extent, determine markets we
can sell to next year. Certainly the quality and type of people we recruit
today will largely determine the type of company we will have in the future.
In short, because planning decisions we make have such long-range
implications, it is critical that they be made in context.
Before we decide what actions we will carry out tomorrow, we must determine
whether that action will help or hinder our progress toward our goals a month
or a year from now.
- THE STABILITY OF A
PLAN IS GREATLY AFFECTED BY TIME
The farther ahead we project current decisions,
the less certain we are that future events will occur as we anticipate. To handle
this principle pragmatically, we must always realize that the farther ahead
we project our plans, the more flexible and generalized
they should be.
Therefore, it is not good strategy to lock into
one course of action for long-term implementation. Planning in a dynamic
situation requires that we anticipate the probable movement of future events,
including the actions of competitors. Develop logical alternatives to meet
each possible movement, but, at the same time, be aware that as we move
closer to the moment of action, more information becomes available to help us
decide which alternative course of action makes the most sense. This is when
our short-term plan narrows to select the best alternative and
commitment to carry out the necessary course of action.
- THE GREATER PLANNED
CHANGES DEPART FROM ACCEPTED WAYS, THE GREATER THE POTENTIAL FOR
RESISTANCE TO CHANGE
Executives spend 95% of their planning efforts on
technical perfection and only about 5% anticipating the needs of the
people who will be expected to carry out their decisions. Unless your
strategic planning efforts include carefully crafted methods to gain support,
your ideas will be difficult to achieve. Not investing the hours needed to
achieve buy-in is a major error in managerial judgment.
- WHY PEOPLE RESIST
CHANGE
- Fear
is a large factor. People tend to be afraid of the unknown. Habit is
comfortable and people resist being forced out of their ruts.
- Resistance may also
occur because people lack confidence in the planner(s),
particularly if past proposals have failed. In addition, some plans are
written in large generalities that fall short of their assessment of
the current situation. In this case, plans are usually met with
distrust and resistance.
- HOW TO HANDLE
RESISTANCE TO CHANGE
To effectively lessen or solve the problem of
resistance to change, people must be made to feel a part of the change!
Thus, the key is — participation
and communication. The more opportunity people have to suggest
and recommend ideas and to see their ideas incorporated into your plan, the
more they will develop a feeling of ownership in what is being done. PEOPLE
STRONGLY DEFEND WHAT THEY HELP CREATE!
- OTHER KEY ISSUES TO
REMEMBER AND CONSIDER:
- Always avoid
"handing down plans." If you fail here, get ready for
that "autocratic" image. If you want meaningful plans carried
out, get people to help formulate those plans.
- Showing the
benefits of change will help overcome resistance. Thus,
in your discussion of the need for change, illustrate "what's
in it for them!"
- Timing is key.
You must control people's anxieties by giving them time to understand
and implement your plan. When they can visualize the inner workings and
the end result(s), they will be more encouraged to go along with the
plan. (Whenever possible, make the new plan a continuation
of something that is already being done. In your presentation, start
where people are today, then take them forward to the new aspects of
the plan.)
LONG-TERM PLANNING
Long-term planning involves
looking ahead as far as we can and building a picture of the end results we
want to accomplish. Once we know WHERE we are going, short-term goals TO GET
US THERE are easier to develop. If you want to make the best decisions today,
fix in your mind the purpose of those decisions.
Consideration of long-term
alternatives often puts a different perspective on short-term decisions. My
larger clients might be able to save money immediately and still satisfy
their customers if they try to get along on the smallest possible investment
in equipment and facilities. But if they look ahead to the pattern for five
years, they may see clearly that this short-term savings will cost them
dearly over the long term. This same reasoning applies to you. You may save
money by skimping on marketing, recruiting, or training now but find yourself
in difficulty in a few years because of inadequate sales penetration, lack of
quality salespeople, or poor management performance.
SHORT-TERM PLANNING
Short-term planning is concerned
with determining the short-range activities necessary to
accomplish long-term results. A direct relationship exists
between the two because today's decisions affect the opportunities available
to us and the conditions under which we will operate five to seven years or
more in the future.
TRANSITION BETWEEN SHORT AND
LONG-TERM PLANS
Tomorrow has a habit of moving in
on us and engulfing today. Short-term planning can eat up our long-term plans
unless we take care to advance our long-term plans as fast as our short-term
objectives are met.
Review your long-term plans
periodically — at least twice each year. At each review, your long-range plan
should be extended for the length of the review period. For example, if
five-year plans are reviewed annually, every year the forecasts, objectives,
programs, and budgets are projected out an additional year, while the
short-term objectives are also moved ahead one year. This assures a smooth
transition from one planning session to the next.
THE STRUCTURE OF PLANNING
Let's take a concise look at the
structure of planning. An integrated structure of planning
should be tailored for your entire company. This requires that each level of
your organization must do the planning work that only it can
perform. The factors outlined below will help to highlight the nature of
planning responsibilities at various levels:
- The higher the
level, the broader the scope
Top levels of management are placed
organizationally so that they have the best perspective and objectivity
for the needs of the company overall. Therefore, the duty of top management
is to consider the total needs of all organizational aspects and future
organizational opportunities.
However, top-level plans require integration of
the viewpoints of the company as a whole. If they are realistic, these plans
should be based on the capabilities and requirements of lower operating
levels. Company planning best proceeds if top management has before
itself the input of lower levels. Not only must top management reconcile and
integrate these with the needs of the management team and the public--it must
also authorize the course of action best designed to satisfy all groups and
give meaningful guidance to the entire company.
The higher the level, the farther the projection
Because of its advantage in perspective, the top
management team should devote most of its planning effort to long-range
forecasts, objectives, programs, budgets, and policies. Lower levels should
be more concerned with shorter-range objectives, programs, procedures, and
budgets.
IN CONCLUSION
- Planning is meaningful
work top management must do to master its future. In the process,
management will be mapping out what they expect to accomplish, how best
to do it, and the limits of costs and other appropriate factors.
- Key planning principles
stress the significance of current decisions in limiting our potential
range of action in the future. They point out that the farther out we
project a plan into the future, the more unstable and undependable it
becomes.
- Another key principle
illustrates the tendency of people to resist change. This resistance can
be overcome primarily by providing for participation and communication
in the planning process.
- Some provision should be made for both your
long-term and short-term plans — sliding them ahead from one planning
session to the next should bridge the gap between the two.
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