Planning has been an important element of the business world for centuries. Though it has come under heightened attention in recent decades, planning as we know it has its roots in the ancient Greek period when Greek war strategies used the word strategy to mean “to plan the destruction of one’s enemies” (Ruch, 2004: 20). Planning is the identification of objectives and the best approaches towards attaining those objectives. While it does not always happen, business actions and decisions should be preceded by plans. Another proportion of businesses do their planning but shelf the plans without implementing their recommendations. Yet others implement the plans selectively or incompletely. The reasons for poor planning and implementation are many and range from unwillingness to prohibitive costs. It should be noted that planning need not be formal or excessively costly. However, planning will always be an important part of business. In fact, effective planning and implementation may draw the line between market leaders and mediocre organizations. This paper illuminates the steps of this most important business process.
Identifying the goals of the organization
Plans must first identify and understand the goals of the organization. Goals guide all actions and decisions affected within the organization; they give direction to the management. Goals define exactly where the organization intends to be at a specified time in the future so that every level of the organization directs its contribution towards that goal. An organization that works without goals is likely to “end up addressing and ‘solving’ the wrong problem” (Hines, 2006: 19).
Goals may be short-term, medium-term, or long-term, differentiated by the length of time required to achieve them. Organizations should constantly revisit and review their goals as frequently as required to ensure that they are in line with the market realities. As a rule, goals must be achievable, measurable, realistic, specific, and must be set within a specified timeframe. They must also be challenging.
It is on these goals that managements can develop action plans, allocating workers at different levels responsibilities and resources to help them contribute to the organization’s goals. Departments or branches can also write their own goals which should be in line with the larger organization’s goals so that as the departments achieve their goals, the larger organization achieves its own. Based on these goals, organizations are also able to evaluate their progress and effect necessary changes to ensure that they are achieved within the specified timeframe. For instance, an organization may realize that the volume of its staff is insufficient to achieve a certain goal within the time set for that goal. As such, it may hire some additional hands to help achieve the goal. It is important that workers not only understand the goals of their organization, but also own and identify with the goals.
Evaluating current position
After developing their goals, organizations need to evaluate where they stand in the industry. Organizations rarely operate in isolation. Rather, they operate in industries where they have to operate alongside competing organizations. With globalization, it has become increasingly essential for organizations to know where they stand in a progressively dynamic and competitive market. Any serious organization must have competitive intelligence to understand the size of its existing and potential client base, its influence in the market, and the threats it faces from competitors. Understanding the current position helps an organization to devise ways of outmatching the competition adjusting prices, exploring other markets, or investing more into research and development, and production of improved products. The organization must also understand the social, political, and technological landscape in which it operates (Rothwell, 2009: 27).
Considering possible future conditions
Organizations today operate in increasingly competitive and dynamic environments often characterized by new entrants, rapid technological advancement, informed consumers, and inflation and market uncertainty, and cross-border trading (Chang & Platt, 1987: 51).
The goal of forecasting in business is to “use creative problem solving and future thinking to generate as many different ideas as possible” (Hines, 2006:21). Unless they invest in proper research and development mechanisms to help them foresee changes before they occur, organizations are likely to be bulldozed by changes in their respective industries without giving them the time to adjust their plans. Organizations must therefore make plans for expected future occurrences. Predicting future happenings is not always easy or accurate. As such, organizations are advised to have an array of appropriate strategies which should be employed should a certain change occur (Rothwell, 2009: 27). One of the strategies organizations should have on their plans is an exit strategy; so that an organization which is outmatched and has no hope of recovering, exits the industry without waiting to incur heavy losses (Sweet, 2006: 64). While there are no ideal alternative strategies, one or none is insufficient. For instance, the rapid rise of China into the global supply market with its cheap products has caught many firms by surprise and though most may not admit it, they are losing customers to the Chinese traders.
Identifying alternative actions and settling for the best
While it is not always obvious, organizations more often than not have an array of possible strategies which they can adopt to achieve their goals. Depending on the organization and its mother industry, an organization can have either a restricted or a wide range pool of choices from which they can pick the appropriate strategies. The strategies may however differ in efficiency, length of time required to achieve company goals, costs, legal demands and practicability. Once an organization has a clear understanding of strategies available to it, it must decide which one is most suitable for its objectives. In deciding on the best strategy, an organization must understand the financial, social, political, and legal implications which go with that strategy.
Implementation and Evaluation
This is the most critical stage of the planning process. It involves putting into action whatever strategies have been adopted in the previous strategies to achieve the organization’s goals. Implementation requires the contribution of all levels of the organization and may entail introducing radical changes to the way an organization runs its affairs. Consequently, this stage is likely to attract the stiffest resistance. Implementing change is most difficult, as most people fear the idea of stepping out of the familiar territories (Jager, 2001: 24). Though organizational management is responsible for the planning, implementing the plans requires the input of other levels of staff. Thus the strategists must anticipate resistance and devise plans of dealing with the resistance and uncertainty which accompany change.
Evaluation involves the evaluation or assessment of the extent to which the plans are effective and exploring ways of making improvements on the plans. While evaluation has traditionally been an “adversarial process” characterized by accusations and defenses, the process needs not to be so (Westat, 2002: 3). It should provide organizations with the chance of assessing whether it is achieving their goals, as well as providing new information, and implications and consequences which were not anticipated.
Planning is an essential process in the life of any organization whether it is non-profit making or otherwise. Lack or poor planning accounts for the majority of business failures. Although it needs not to be a formal and expensive process, organizations must accord serious attention to every stage of this important process. A comprehensive plan is likely to fail just because one of the stages was either overlooked or given insufficient attention.
Chang, Y. & Platt, W., The First Powerful Step in Strategic Development. Journal of Health Care Marketing, 7(2): pp 50-55.
Hines, A., 2006. Strategic Foresight: The State of the Art. The Futurist; 40(5): pp 18-21
Jager, P., 2001. Resistance to Change: A New View of an Old Problem. The Futurist; 35(3): pp 24-27.
Ruch, B., 2004. Basic Steps in Strategic Planning. The Camping Magazine, Vol. 77, No. 5.
Rothwell, K., 2009. CI in Asia: Scenario Planning. Competitive Intelligence, Volume 12, Number 1: pp 27-29
Sweet, K., 2006. Avoiding the Black Hole of Business Start-ups. USA Today 134, 2730: pp 62-65.
Westat, J., 2002. The 2002 User-Friendly Handbook for Project Evaluation. Arlington, VA: National Science Foundation.