Planning is used to help individuals and businesses to identify their future goals. Preparing for the future allows them to consider the impact they would like to have. And it establishes a way to get there. That is why having a plan is essential to where you are going.
Those who don’t develop plans are leaving their future to chance.
Many of us have seen what occurs when we allow that to happen. It is not an ideal situation for sure. There is an old saying
“Those who fail to plan, plan to fail”.
This is true in business. Managers at all levels plan for all sorts of things. In fact, planning is one of the four major functions of management.
There are three main types of plans that a manager should use. They are:
- Strategic Plans – These are designed with the entire organization in mind. They begin with an organization’s mission. Top-level managers, such as CEOs or presidents, will design and execute these plans. They cover the desired future and long-term goals of the organization. Strategic plans look ahead to where the organization wants to be in three to five years. They serve as the framework for lower-level planning.
- Tactical Plans – Tactical plans support strategic plans. They translate them into specific strategies relevant to distinct areas of the organization. These plans cover the responsibility of departments to fulfill their parts of the strategic plan.
- Operational Plans – Operational plans are made by frontline, or low-level, managers. These plans focus on the specific procedures and processes. These occur within the lowest levels of the organization. They include planning the routine tasks of the department using a high level of detail.
There are five process steps involved in planning. These are:
- Setting the objectives for the long term.
- Generating alternative strategies to accomplish the objectives.
- Evaluating the alternative strategies and choosing the one that makes the most sense to use.
- Monitoring the strategies implementation and the results. If the strategy is not working or achieving the desired results, taking actions as needed.
- Obtaining a high level of commitment among the various stakeholders. These occur during each step of this process.
When making plans, it is always good to get different perspectives. These should come from staff, colleagues and trusted advisors. In that way you can get a full view of your options and potential problems that may be encountered.
To develop plans based on only a single point of view can be dangerous.
You may miss important aspects that can keep you from making a major mistake. It takes some time to do this, but it is worth the effort. And it lets those who work with you and for you know that you are open minded and value their thoughts and opinions.
The benefits of planning are that they help:
- Decision makers by providing guidelines and goals for future decisions.
- Managers to exercise more control in a situation, establish goals, and consider possible contingencies.
- Reduce uncertainties of the future. Planning involves the anticipation of future events. The future cannot be predicted with total accuracy. So, it helps management to anticipate and prepare for risks. You can then develop provisions to meet unexpected turns of events.
I first learned about planning when I was given the assignment to develop an Operational Strategic plan for Binney and Smith (now Crayola Corporation). I had heard about developing a plan, but had not been required to do so. This was my first assignment in this regard.
I found out some key things about planning. These were:
- Planning is very important. The reason for developing this plan was to give an advanced warning to the executive staff. It was to cover what operational capital would be required to support the company’s Strategic Sales and Marketing plan. The executives would then know what was needed before it came time to budget and request funding. They were already aware of the need and it did not come as a shock. Approvals were then much easier to get.
- Planning is an intensive process. To develop a good Operational plan, I first had to know and understand the Sales and Marketing plan. That meant identifying what assets would be needed to make what would be sold. That might entail adding to existing assets. Or it might involve purchasing new equipment and tooling that we did not already have.
- Other things also need to be taken into consideration. These included:
o Replacing old, depleted equipment and tooling.
o Upgrading existing tooling and equipment for efficiency purposes.
o Revising or replacing unsafe equipment.
o Expanding the physical facilities to handle the need for more equipment and
material storage space.
- I also learned that many executives don’t know much about planning, even when they claim that they do. I received little or no help from all the operational directors I worked with. While they asserted to have done planning, they could provide no template or examples to show me. So, I had to learn on my own. In a way that was a good thing, because I never forgot what was needed. I also realized that I could then help others in this process.
- Finally, I learned that a plan is not a static thing. While we do our best to project into the future, we are taking our best guess. As circumstances change, our estimates have to change. A Strategic Plan is good for no more than two years. It then needs to be reviewed and revised. If you do not do this, you are dealing with old information and that will lead to major issues.
Through this process, I also learned that it is important that there be planning in all aspects of your life.
To live your life without a plan is to accept whatever you are dealt. There is then no control over where you will wind up and how you will get there. If it makes sense to have a business plan, you should also have a life plan. I do. And, as with business, it is updated every few years as circumstances change.
In business, it is important to have plans in all three areas (Strategic, Tactical and Operational). There is the future or Strategic Plan that sets the overall tone for the business. That then needs to be brought into the two shorter term plans, These are the Operating and Tactical Plans. These include very detailed and specific actions to be taken within the next 12 months. They cover financial information such as revenues, costs and profitability.
They also include the specific actions to deliver these. Regular reviews should occur at least quarterly to see how things are progressing. Even in a short duration such as 12 months, adjustments should be made to these plans. These are based on changing circumstances. The trick is to not change the plan too often. A mid-year correction is usual. Any more or less and you don’t have a plan. Instead you have a wish list and that is not reality.
I also believe that it is important to keep copies of old plans. These are the foundations you can build from. And I am a big proponent of strong foundations. I use old plans as a reference point of what to include in a new plan. It is also a teaching element for instructing others on what they need to do and what should be included in their plan.
I still have a copy of the very first plan I developed. I have shared that with others, as a template. There is nothing more powerful than to see what an actual plan looks like. One picture is worth one thousand words.
Unlike the others I went to for help on my first plan, I want to share what I have learned with others. I then turned future developments to another person in the corporation. I gave him a copy as a reference and a baseline. I have also shared the template with other companies who also wanted to develop plans. They had never done one so it was a learning experience for them.
It is amazing to me that today there are still many companies that do not have short or long term plans.
They may have goals such as a revenue objective for the current year. But that is not a plan. It is just one small part of a plan. They do not realize this and so when asked they swear that they have a plan. They don’t. Convincing them can be difficult, until you pull out an example and show them what a real plan is. Their excuse is then that they do not have the time to develop something that extensive. That is not a good attitude to have.
If you can’t spend time determining where you want to be and how to get there, what are your chances of reaching your goal(s)?
Yes, it takes time. And it takes effort. Most things that are worthwhile do. If you are not willing to take the time, where is your time spent? Probably, chasing a myriad of problems. These have cropped up because there either was no plan or the one you have was poorly constructed. Why is there time to continually fight fires when less time could be spent setting up and following a good plan?
All the successful people I have dealt with have a plan. They have taken the time to develop it and they follow it. They know where they are going and how they will get there. And they are adjusting to the changing environment as they go along.
There are good plans and bad plans. Having a plan is not enough. It has to have a chance of success. Otherwise, it is a dream, or even worse, a pipe dream. There must be a sense of realism to a plan. That requires scrutiny by others. Especially, those who can and will offer an unbiased and unvarnished opinion of it.
If a plan makes sense, it can stand on its own.
A savvy person can pick it up, compare it to the situation at hand and let you know whether it is good or bad. You need to get that kind of feedback. Without it you may miss something crucial that could make the plan viable or cause problems. To allow that to happen is a mistake.
Be careful who provides input to the plan. There are naysayers who will disagree with anything and may give you bad advice. You have to be careful that when having the plan reviewed that they don’t take something that is good and make it bad. That is where trust, knowledge and experience come into play. You need to have all these qualities in those who review and critique your plan.
In conclusion, planning plays a big part in my business and life. I try to impress this on everyone I care about. In dealing with my business partners and clients I have stressed the importance of having a plan. When asked to work on projects, one of the first questions I ask the company I am working with is, “Where does the work we will be doing, fit into your overall plan?” If they cannot answer that, another discussion is needed. If what I will be doing isn’t in the plan or fits into it, there will be problems. I may wind up working on the wrong thing or the legs of my work will not be solid and will not last. The last thing you want is to spend money on something that has no staying power. I want to make sure that I and my client both, “Know where we are going and that we are taking the correct road to get there.”