Planning - the first step in POCM
In a series of articles Pat Sheridan talks about the various aspects of the management function under the headings of plan, organise, control and motivate (POCM). If you are responsible for the work of others and for achieving any kind of preordained results then you are, in fact, managing. Whether your title is manager, supervisor, team leader, charge hand or superintendent, you are actually managing and POCM applies to some degree. In this article we look at planning, the first step in POCM.
The Structured Manager
Having some structure to what you are doing should improve your performance. Therefore, going through the process of planning, what you intend to do and why this is so, organising the necessary resources to accomplish the plan, controlling each step to ensure there is no drifting away from the phases which you laid out in your plan and finally motivating all those involved in making the plan work, is a structured approach.
Levels of Planning Complexity
A key question is, “What’s the difference between planning and strategic planning; surely there is no real difference?” In simple terms a strategic plan is the general core direction for the company and the rest of the company plans are the detailed steps to help achieve this core direction. To some extent the “surely there is no real difference” piece is true, strategic planning just seems or sounds more important than just planning. In a sense this perception creates a view that the strategic planning must be what’s required of the owner, director or certainly someone at a very senior level in the company and, ipso facto, the planner of specifics is just at the lower end of the planning food chain.
This depends on a number of variables such as the nature of the work, the complexity, the range of activities, the value of what is being planned, the impact of a mistake in the plan and a whole range of similar attributes. So the view of a clear distinction between the strategic planner and the other planner can blur, until you define the organisation, its services or products and the key factors of the planning roles. Company policies and procedures will be a constituent part of such definitions.
Ideally anyone who is responsible for a planning function must have due consideration to some form of central strategy or specific direction. If the planner at the lower end is not privy to the strategic direction at a higher level it could have a negative impact on the overall results. As usual communications raises its head as a critical aspect of management and will also permeate its importance through the whole POCM requirements for each and every manager.
Strategic planning should, in the first instance, be the key responsibility of each head of function. For example the financial controller in any organisation is responsible for the strategic planning of all financial related requirements for a company. This can require the regular preparation of draft strategic plans covering all financial related matters which could impact the company positively or negatively, including cost control, product or service pricing, bank charges, loans management, investments, plant and equipment leasing and many more important issues depending on the size and complexity of the organisation.
The HR Manager would prepare a similar strategy for hiring in the appropriate skill sets, staffing costs, training, pensions, external suppliers such as security, catering, etc.
These two examples would be a requirement of annual budget preparation generally and, of course, would apply to all other head of functions. It is all about thinking, research, interpretation, assessments and decision-making. In many cases the plans can be pure mathematical formula requiring number crunching.
On the other hand, strategic planning requires a deeper analysis to include the anticipation of potential changes either forwards or backwards on the general plan. Experience, judgement, access to internal and external data and contracted specialist support, commodity pricing trends, stock markets and even some informed risk taking are all key information based aspects of the strategic planning thinking.
Judgement and Decision Making
This judgement requirement is for two main reasons both of which are of equal importance to the company.
The first is to ensure that the company is as favourably placed as possible to avail of any improved demand from the marketplace for its products or services or to adapt to other opportunities which might arise.
The second is to be as prepared as possible to deal with any possible downturn in the marketplace and to ensure that the company is placed in a minimum loss position as quickly as possible in such an event.
This fine line of readiness, for two entirely different directions, is also an important aspect of strategic planning.
All heads of function have a role to play within the company’s general strategic direction, with the chief executive guiding the team towards certain fundamental goals of the organisation which may have been decided by a board of directors. Despite this strong management and leadership the combined thinking of the board, chief executive and the heads of functions is still a judgement (or educated guesswork) reflecting the interpretation of information and the assembly of the logical positive trends which could be expected if a particular course of action were followed.
Of course this interpretation of the information and the possible results of actions based on this interpretation can be either right or wrong. Companies do collapse, as you are aware, because of poor decision-making. Viewed in this light the importance of planning is clear and the weight of the responsibility can be quite daunting as the stakes get higher.
The Chief Strategist
The chief executive is the one who carries the final responsibility for assessing these multiple strategic contributions from the heads of function with regard to the business requirements and must decide on the final direction. This means that once the various interpretations of the past and present happenings are integrated to the potential future possibilities, the chief executive must marry them all together (in conjunction with the input of all the contributors) and produce the central strategic plan. It can be difficult and sometimes key decisions are based on best information at a moment in time which may be incorrect later. The plan must be sufficiently flexible to allow for such changes.
All heads of function will have a perspective on their own area of expertise and generally this will lack the consideration of their colleague’s issues. Hence the need for a strong leader as chief executive who must cut right down to the key issues affecting the overall business and manipulate the individual plans to take account of a new direction.
The heads of function must be privy to the chief executive’s understanding of the company’s needs and the overall marketplace if they are to modify their contributions to fit the new direction. In turn the heads of function must ensure they provide the best possible information, interpretation and judgement to the chief executive to enable him or her to understand the information and integrate it into the overall plan.
Of course, there are a host of other possible ingredients which could include the board of director’s intentions towards the future of the company. The heads of function are not always privy to this strategic thinking. So as you can see, there is also a need to know consideration for the sharing of important information about the future of the organisation.
At the next level down from the heads of function there are managers who often have further responsibilities for turning the final departmental strategic plan into a working reality of many specifics plans of minute detail and timing. And so on down the line. The more information about the pros and cons for this level of planer the more likely it is that they in turn can build in the flexibilities within a department or with external suppliers to ensure sufficient flexibility to cater for the fine line of readiness.
In some organisations as much information as possible is passed down this line of command and, in other cases, it is as little information as possible. The former are those companies who believe in the participative approach and who have no particular worries about confidentiality. These are generally described as the sharing and caring or progressive organisations.
Other companies may only perceive their ability to survive on the basis of a total blackout of their business intentions. This policy (or strategy) is tough on the staff, but maybe an absolute necessity. It depends on the company and its services, products and the market place.
Leadership and Purpose
All plans and their individual constituent parts must reflect the central organisational purpose or direction and the key objectives for the foreseeable future. The leader (chief executive for example) is charged with the maintenance of the key objectives of this concept.
Timing
It is obvious that the primary starting point for all management activity must be planning. Otherwise, it is like a group of intelligent people setting off on a journey without any idea of a destination or the knowledge about how much the journey might cost, if there is a way back and if anyone thought in the first place of bringing along any money for travel and other incidental costs.
It applies to any work to a greater or lesser degree depending on complexity and impact of actions. For example, a factory assembly department, a fish and chip shop, dry cleaners, a large supermarket, a nuclear power station, making and launching a space shuttle all require varying degrees of planning related to complexity.
Co-operation
The intellectual process of thinking, analysing, sharing, problem analysis and decision making within an enterprise requires agreed and shared purpose, objectives, information and the positive, professional attitude of co-operation. This co-operation requires a real trust of one and others abilities (knowledge and skills) and this is particularly so of the leader.
Plan is not just a four letter word
Not all managers like planning some are doers and want to get down to the ‘nitty gritty’ of making things happen as long as they have a rough general direction. They often review thinking and planning sessions as a distraction from their core activity. Beware, they may not be the best ones to contribute to the core plan. They need to be retrained in their thinking if your company wants to have a sound and meaningful plan to achieve core objectives.
Every company is different and every level of planning is different because of the complexity of businesses. This is what makes it all so interesting.
So planning is an integrated management necessity which places demands on the innovative thinking of all managers and others who carry any responsibility for suggesting, proposing, deciding on what needs to happen, when it must happen and how it is to happen and of course why it should be just so.
Once a company’s core strategic plan and supporting detailed departmental plans are in place as to how the core strategy is to be accomplished, the manager concentrates on controlling all aspects of the detailed plan to maintain the objectives, taking corrective action as required. While all this is in operation the function of planning the next year or phase recommences. It is a never-ending process of evaluation and decision-making.
