By David Kane and Josée Santoni

Whether long or short, detailed or general, a good plan will help you avoid impulsive decisions and guide your organization toward success

Over the years, clients from various organizations have asked us repeatedly about planning. And it's surprising how many of these people looked at planning as a painful annual ritual rather than a continuous process that will increase the organization's chance of success and survival.

Here we have gathered some of the most frequently asked questions about planning. We hope this will cast some light on the subject.

Planning strategy vs. planning action
Planning forces you to decide what you want to accomplish (objective), what approach (strategy) you will take, and what specific activities (actions) must be undertaken – all within a certain timeframe and the limitations of your resources. 

Strategic planning is a macro attempt to chart the future; it deals with the what, where and why side of the planning exercise. It is an attempt to define your sphere of influence and determine what elements might have a fundamental impact on the way your organization functions. It is about evaluating significant threats and opportunities and setting out a general plan on how to reduce or avoid the threats and take advantage of the opportunities.
 
Action or departmental plans are detailed documents setting out how and when actions will be undertaken and by whom. These plans generally deal with budgets, timetables and other performance indicators. The creativity and thinking at this stage of the plan are directed toward completing the project.

Robert Bradford of the Center for Simplified Strategic Planning in Southport, Connecticut defines a business plan as a document including elements of both strategic and operational planning that is generally used to attract financial support for an organization or a business proposition. We agree with this definition.

What does a strategic plan look like?
In a small privately held company, the president might have a clear vision of the organization's future and how to get there, but he might hold all the cards very close to his vest and simply dictate what actions are to be taken. This can be frustrating for the management team, but there is still a plan. In the long term, however, the president's knowledge will have to be transferred to someone, somehow.

At the other extreme, companies may spend so many months producing a planning document that they detract from day-to-day operations.

Ultimately, it doesn't really matter whether planning in your organization is a private exercise or an elaborate process involving numerous experts and consultants. Both approaches have worked well in some organizations, some of the time. The point is, planning is critical and the better the planning, the better the results. As carpenters say, "Measure twice, cut once." 

Your plan may range from a few pages to several chapters. But keep it simple, and always actionable. Remember, someone should be able to pick it up and grasp the essence of the business with little effort and even less explanation.

How do I put a plan together?
Planning is not rocket science; it's more an exercise in common sense. It forces you to justify your perceptions and any impulsive decisions before acting – a concept that seems to have been forgotten by many in the name of efficiency.

Put frankly, planning boils down to determining "Who has the money and how do I get some?"

If you can answer the "who" part, you will define your marketplace or sphere of influence.

If you can quantify the "some" part, you have an objective.

Finally, if you can determine the "getting" part, you should have your strategy.

If you can put together a short phrase similar to this, backed by relevant research and analysis, you have a plan. You could argue about its thoroughness, but it is a plan. Here is a rough guideline to help with the process.

Analysis
How do you define your market? How big is it? Is it growing or in decline? What is happening to prices, end users, retailers and distributors? Are there any major differences from region to region and why? Your basic SWOT analysis will enable you to determine where you are in a defined market and to identify strengths, weaknesses, opportunities and threats. This will help you determine what to do with your current understanding. You and your management staff already possess a lot of general market information but to quantify or validate it, you can readily obtain more information through industry associations, suppliers and government agencies.

Objectives
Many firms set objectives based on sales and/or market share and/or profit, plus other elements such as new product launches, new clients or productivity. Management must ensure the objectives are both aggressive (striving for the maximum) and attainable. We strongly suggest that you make room here to celebrate success. Any organization that is setting impossible objectives is almost certain to lose valuable managers and sales representatives.

Strategy
As noted in our article on strategy ("What strategy is – and isn't"; see below), this is the how part of what you are trying to achieve.

It will set you apart from others and determine why people will be buying products from you rather than another supplier. Are you innovative, conservative, fashion forward, low price, exclusive? Your strategic positioning will be based on what you have defined as your market (who has the money) and your organization's ability to address the market's needs better or differently than your competition.   

Action plans
At this point, we change gears from discussion to action. Lou Gerstner said it best in 1993, in reference to the importance of good governance: "The last thing IBM needs now is a vision" (The Economist, Aug 10, 2002).  The departmental or action plans will follow the general guidelines set out in the strategic planning process. Now is the time to decide on specific actions and to determine when and how much they will cost. This work must be done in conjunction with other departments to ensure feasibility and mutual support. 

Action plans assign responsibility, timelines and performance criteria to allow the organization not only to move forward but also to review its performance in a few months and decide what requires further attention.

Evaluation
The plan must give management a way to keep track of its progress and understand any variances (positive or negative). Even if the results are right on plan, it is unlikely everything has transpired exactly as anticipated.

For example, if the plan called for a 5% increase over last year, and it achieved more than 6% after two months, it isn't time to start serving champagne until you understand why. Perhaps the market is growing at 10% or the customer is loading up on inventory before the end of a special rebate program you had initiated. Remember, if you are performing below the market you are losing ground to the competition. If your sales are based on artificial pricing, do you honestly expect the customers to continue buying at the same rate once pricing is normalized? 

This evaluation process will lead you back to the SWOT analysis and to question some of your hypotheses. It will be the basis of the subsequent plan. 

Can I outsource planning to a specialist?
No, you have to write, sell  and act on the plan yourself. Remember, it is your business, you are the expert. Most important, it is the future of your organization and everyone involved who depends on it.

That said, external help from qualified management professionals can prove useful in some areas:

1. Planning process: You may need help in laying down the methodology, driving the planning meetings and coordinating information gathering. An experienced planner will facilitate discussion and direct participants to a concrete resolution. The facilitator should ensure all ideas are expressed and vetted in a manner that will enable sensitive issues to be broached without anyone feeling threatened or steamrollered. This is critical to successful planning, but it is not an easy role for the president or leader of the planning process to assume, given the political nature of some organizations. After all, the architects of the plan are the ones who will be working together to execute it.
2. Creative thinking: Almost all planning sessions will call for growth. This entails new products, markets, channels of distribution and processes – the key word is "new."  If the ideas are truly new, your organization may be lacking the knowledge, experience or resources to take full advantage of these opportunities. An outsider can provide valuable assistance in the generation and quantification of new business ideas. He or she can help challenge your assumptions, provide valuable input from similar experiences in other industries and help determine whether the organization has the necessary resources.
3. Strategic vigilance:  Once your plan is in place it is essential to stay on track. Changes should be made only in light of conclusive evidence. A strategic watchdog will constantly monitor the organization's evolution and measure its progress against its objectives. This responsibility is usually shared by management but in many cases, external support is needed to get the organization to move forward.  For example, when things start to go wrong, it is very tempting for management to find fault with the plan and not its execution. It is always easier to change the plan to fit the situation than the other way around. Whether internal or external, a watchdog should be able to guide you to the true reasons why things are off track and help you prepare appropriate remedial steps.

The bottom line remains: get help in coordinating, challenging, validating and executing your plan if necessary, but do not abdicate responsibility for creating it. 

So I have a plan – now what?  
Once your plan is finalized, it's time to put it into action – right away. Otherwise, people might think the plan was an end in itself and they can simply go back to their regular jobs.  Planning is relatively easy; the real work is in the execution as you move from theory to practice. When the planners are held responsible for the execution of the plan, they are forced to realize the shortcomings of their planning efforts. This ensures a more effective planning session next time around.

Bear in mind that some of the initiatives you have undertaken in the plan may require a shift in priorities. If this is the case, you should be planning to deal with change and realize the impact these changes may have on individuals and the organization as a whole.

Anything else?
There are numerous books, articles and experts on this topic. Many are excellent resources while others get caught up in the process. Take a look at different ideas and talk to people to find the best approach for your situation.

Make the distinction between strategic and operational planning. The former is a review of, and decisions regarding, issues that could fundamentally affect the way you do business. The latter is how, when and who is going to execute the strategy.

A business plan includes elements of both strategic and operational planning and is generally used to attract financial support for an organization or a business proposition.
It provides a guide to where you want to go and how you want to get there. 

A plan can take many different forms: it can be formal or informal, detailed or general. It provides a guide to where you want to go and how to get there. It allows you to focus on objectives you think are important and to measure how well you are doing over time.

Good planning also allows you to question yourself and your environment and to better anticipate changes and disruptions.

A plan takes time and effort to develop and execute, and it will be worthwhile only if you are committed to it.