Don’t be hostage to the negative environment, simply reacting to changes going on around your business. Plan now to survive – and follow through, on all levels of your organisation, to thrive. By TOM McKASKILL
By Tom McKaskill
Don’t be hostage to the negative environment, simply reacting to changes going on around your business. Plan now to survive – and follow through, on all levels of your organisation, to thrive.
Anyone can reach a destination if they don’t care where they end up, but I wouldn’t recommend this as a business strategy – especially in these uncertain times.
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The whole purpose of planning is to decide where you want to get to, and then set out a strategy to get there. The strategy then determines intermediate targets and tactics.
While we all accept that plans are out of date as soon as they are written, the understanding we get of our own operations through the process is invaluable. When something goes off track we have an intimate knowledge of the impact on our business.
Businesses are finely tuned machines. Each part connects to other parts and any disruption in one part reverberates across the business, leaving a trail of problems. So understanding the interconnections is vital for setting growth targets – as well as risk management.
It is hard to imagine how one could increase output by 50% without also considering how the business will fund, recruit and train all the new employees. If output increases then so do inputs.
To what extent then have we considered the impact on supplier capacity, in bound shipment, quality inspection, storage, conversion, finished goods handling and outbound shipment.
Perhaps the greatest benefit of a systematic planning process is this understanding of interconnectedness. It encourages us to drill down deeper and to put more effort into understanding our planning assumptions.
By working through the interactions of each activity on those that precede it and those that follow it, we can see how different assumptions impact our ability to meet our targets.
Better planning requires us to be better informed about our own operations, as well as to put more effort into building plans on evidence rather than conjecture. We need to be sensitive to interactions between different parts of the business as few companies have such excess capacity that they can take the pressure of growth for granted.
Without working through the intimate details of how the business will manage the changes, the outcome is likely to be a disaster.
The discipline of planning – target setting, performance monitoring and contingency planning – needs to be embedded into the culture of the business if it is to shoot for growth.
Furthermore, this has to be taken down through the organisation. Top down planning by itself does not build confidence, nor commitment to performance targets. Too often aggregate numbers are imposed by the bosses without getting the agreement of those who are at the coal face. The result is a disconnect between where the company is supposed to be to where it will actually end up.
So planning, target setting, commitment and performance monitoring has to be embraced at all levels of the organisation. The process of building plans needs to be iterative, taking into account not only ambitious targets but also a realistic assessment of what is probable.
In the end it comes down to a basic philosophy. Do we want to be hostage to our environment, simply reacting to changes going on around us, or do we want to be proactive and take control of our future.