How many people start on a trip without doing some planning?
In my work I have to do quite a lot of traveling, frequently to the same cities. One may think that the repetition would make planning unnecessary, but changing travel conditions make planning more necessary than ever. Arriving at US Customs without a passport prohibits a trip to the United States. Arriving at a client’s office with one file missing creates confusion, and gives the appearance of sloppiness. The list of items that can fail without planning goes on and on.
Running a business is the same as going on a trip; it requires planning. We are now at the start of a new calendar year—and for many a new fiscal year—one of the best times to start a plan.
A key part of planning is setting objectives:
- objectives for the business
- objectives for each key employee
- objectives for your personal life
It is surprising how little time and effort many companies spend in developing objectives for their business. On the other hand, it is depressing to see how much time large organizations spend on developing objectives that are forgotten shortly after they have been created.
One of the problems with setting objectives occurs when an organization has its employees setting objectives for themselves. Frequently, these objectives are not aligned with the objectives of the organization, which creates a loss of momentum for both the organization and the employees.
In other cases, someone, probably the President, sends out an edict to all and sundry that she wants an operating plan for the coming year delivered to her by mid-month.
Everyone works feverishly developing a plan for their department or functional area. They do so in a vacuum without knowing what direction the organization plans to take in the coming year(s). What is created is a hodgepodge of inadequately developed plans that may or may not be relevant to each other.
Developing a foundation
Another shortcoming of many organizations’ attempts at planning is the failure to develop a foundation for good planning. They start their planning at ground zero. Little analysis is carried out as to where the organization stands in the pursuit of its goals.
One of the ways this lack of understanding can be overcome is to carry out a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of the business. Such an analysis provides two benefits:
It can act as an operating audit to determine how the business has performed over the past year.
It can give a snapshot of the organization’s strengths and weaknesses at a given point in time.
A good SWOT analysis, if done well, will take a bit of time to carry out. However, after it is completed, participants have a much better idea of the condition of the business. The SWOT analysis can provide a base for planning since the organization knows the strengths it can build on and the weaknesses it must overcome to be successful.
Like all forms of analysis, a SWOT analysis is not worth the time that it takes to conduct unless it is done honestly and with openness. This at times can be best accomplished by inviting a non-member of management to act as a facilitator/devil’s advocate. Such a person can direct the analysis in such a way that difficult issues will not be glossed over but will receive the scrutiny that they deserve.
Summary
- As you plan for the New Year, consider these two ideas;
- Ensure the objectives of all parts of the organization are aligned.
- Develop a foundation for your planning before starting to plan.