The Planning Process

Planning is one those things that we all know is good for us, but that no one wants to take the time to do. While it may seem that planning only takes time away from running your business, operating a business without a plan is like going to a grocery store without a list and trying to remember all the items that are needed. One comes out of the store having forgotten something critical - and having purchased a number of items that are totally frivolous and may never be used. It is the same for a business operating without a plan. Critical issues do not get addressed - and some tasks get done that have no relationship to the direction the business needs to go. For a business, however, the consequences of these unaddressed issues can range from inconvenience to bankruptcy.

Part of this reluctance is due to how complicated the process is viewed. Yet a complicated plan is almost as useless as none. The real question is how to make something simple that fits your business' needs. Can a good grocery list system be devised that isn't unnecessarily burdensome for all involved? Of course. Let's take a look as what planning really entails.

The word "plan" originated from then Medieval Latin word planus which meant a level or flat surface. This evolved in French into being a map or a drawing of any object made by projection upon a flat surface. In English this has become a more general sense of a scheme of action, design or method. Planning in its current usage in business implies a consciousness of what is happening in the business. It does not preclude creativity or instinct, but it does add a layer of awareness that spells the difference between survival and extinction in a changing environment. Planning does involve:

  • an understanding of the business' history
  • an examination of the business' environment
  • an assessment of the business' mission
  • goals
  • a process for reaching those goals
  • a process for gathering information
  • a realization that planning is a continuing process that is constantly evolving

Planning does not necessarily mean trying to project the future, but being aware of a range of likely futures and being prepared for them as occur.

Business Plan
A business plan is used when one is starting a new business or a new process or product within a business. It includes not only a description of the new business, process or product, but also a discussion of how one plans on managing the marketing, development, production, and financing of this new venture.

Organizational Plan

Organizational planning, when it does occur, too often is spurred by crisis, focused on the short term, and not well thought out. To create healthy futures, organizations must construct processes for creating their futures that are not fueled by crisis and turmoil. It can be done.

One of the most confusing aspects for those who want to plan is the variety of terms that are used in conjunction with planning. How do you differentiate between a business plan, a financial plan, a marketing plan, a human resources plan, an operations plan, a strategic plan, a long-range plan and just plain general planning? The simple answer is that each area of your business needs planning so each area should have its own grocery list of what it wishes to accomplish in the future.

Strategic Plan
A strategic plan usually refers to the overall direction you wish your business to take over the longer term. Consequently, a long-range plan and a strategic plan are often used synonymously. Within that overall strategy a business will have shorter term financial goals, marketing goals, production goals, and human resource goals that will each need some type of plan if they are to be achieved.

Just because a strategic plan is longer term does not mean it is never changed, however. One of the most serious mistakes businesses make is not revising their strategic plan regularly. The environment the business is operating in is changing constantly. The plan must be revisited at regular intervals to reflect the impact on the business of these external factors.

There are some universal principles that are true across all types of planning. Before tackling more specific planning models, it is wise to gain an understanding of the basic principles of general planning.

Planning Principles

Any plan should include who, what, when, where, how, and why.

  • Who is needed to accomplish this task?
  • What needs to be done?
  • When does it start and end?
  • Where will it take place?
  • How will it happen?
  • Why must we do it?

Along with the answers to these questions there needs to be some operational scheme to organize the tasks needed to achieve the goal.

A helpful approach is to work backward from the goal to decide what must be done to reach it. The backward approach is a way of looking at the big picture first, and then planning all tasks, conditions, and details in a logical sequence to make the big picture happen. From this a to-do list can easily be made. This list will become a checklist to ensure everything is progressing as planned. Adjustments can be made based on changing circumstances. The plan (list) should be referenced often as a set of signposts on the journey towards the goals.

For many of us who left corporate America in favor of a smaller work environment, the idea of drafting a plan may seem offensive. After all, isn't frustration with all that busywork one of the reasons we left in the first place? We all have an aversion to doing anything on our job that doesn't immediately help the situation we are now experiencing. However, isn't it also true that a little foresight and action before the fact can help eliminate many of the problems we face each day. Wouldn't it be nice to anticipate something like a price cut by your major competitor or a rise in the interest rate on your credit line? Of course it would. And with that anticipation comes an organized and effective response. That is what planning is really about.