Planning – A Must in Recession Times : Planning – A Must in Recession Times Dr. H. Kwame Afaglo
©2010
Planning – A Must in Recession Times : Planning – A Must in Recession Times In this recession times (2007 and ongoing), an entrepreneur or manager who leads his or her team based on mostly guess work and emotions is on the path to folding up the organisation.
Guess work and emotional driven management is synonymous to ‘Anywhereland’ or the managerial style of ‘Alice the manager, in Wonderland’.
Planning – A Must in Recession Times : Planning – A Must in Recession Times With competition upped globally, managers are no longer in the act of guess work or emotionally driven thoughts and actions. However, planning is become a must do activity.
What is Planning?
Plans are formulated before the commencement of work or activity and work or activity is the outcome of planning.
Planning – A Must in Recession Times : Planning – A Must in Recession Times Also, plans are expected to be time bound or in some cases are dependent on event(s) as exigencies.
Further, plans must be goal directed.
Plans must be internally stored, since it is the success determinant of the organisation.
What planning is not
Planning is not a gargantuan document to impress colleagues or shareholders without
Planning – A Must in Recession Times : Planning – A Must in Recession Times focus.
Planning should not be cryptic and non-interpretable by colleagues.
Plans must not be unachievable.
Fine details of plans must not be made public. However, their synopses could be in the public domain to inform consumers of the sense of direction of the firm.
Planning – A Must in Recession Times : Planning – A Must in Recession Times Inferring from the afore-mentioned, planning is defined as:
Planning is a carefully thought out process aimed at achieving organisational goal and within defined time.
The main concepts for recession time managers to deliberate upon are:
Careful thought
Process
Planning – A Must in Recession Times : Planning – A Must in Recession Times Achieving organisational goals
Time bound
Carefully thought – A well thought out business road map is mostly based on experience and previous scientific information or data, which shows as trends. Analyses of trends serves as bases for
Planning – A Must in Recession Times : Planning – A Must in Recession Times planning and projects into the future or unknown. Some analytical tools in decision making also aids managers in planning as PEST, SWOT analyses, Net Present Value (NPV) among others. Statistical tools as averages, Standard deviation, t-test, rank correlation, variance, ANOVA etc, are useful in planning and decision making for managers. All the mentioned tools are
Planning – A Must in Recession Times : Planning – A Must in Recession Times scientific in nature, therefore requires critical thinking which is one of the necessary characteristics of a manager. This is one of the reasons, recession time manager’s must go through formal training to avoid pure guess work and decisions based solely on intuition.
Some, firms especially production floor
Planning – A Must in Recession Times : Planning – A Must in Recession Times managers keep an eye on the production histogram and these are published for all staff. In such cases, management pair productivity with bonus schemes. These histograms are also useful scientific tools in projecting production levels for the future (forecasting). Example of production graphs are shown as figure 1.
Planning – A Must in Recession Times : Planning – A Must in Recession Times Performance histogram
Planning – A Must in Recession Times : Planning – A Must in Recession Times A carefully thought out cognitive map of organisation’s production journey into the future can not refuse to acknowledge scenario planning as an integral portion of the over all plan. Scenario planning is simply listing all the ‘What if?’ imaginary situations as:
What if the disposable income of consumers drop?
Planning – A Must in Recession Times : Planning – A Must in Recession Times What if, the product reaches maturity?
What if machinery fails?
What if government changes the operational legislation?
What if the economy drops into deflation? Etc.
After listing most if not all during brainstorming sessions, the team is expected to comeout with a grid that spells out the solutions.
Planning – A Must in Recession Times : Planning – A Must in Recession Times Still under critical thought, managers are expected to factor into the plan, their main obligations as satisfying the expectations of their consumers as the fulcrum of the plan as well as staff. In other words, planning must consider the external and internal variables that will give the organisation its competitive edge in achieving its goals. Just to mention a few of the factors: PEST
Planning – A Must in Recession Times : Planning – A Must in Recession Times analyses caters mostly for the external, SWOT and Porters five forces model for both internal and external. There are few presentations to read in relation with SWOT, PEST, Porter’s five forces model per links below;
http://www.wiziq.com/tutorial/51376-SWOT-analyses
http://www.wiziq.com/tutorial/37818-PEST-Risk-analytical-tool
http://www.authorstream.com/Presentation/KwameAfaglo-239013-five-force-public-services-forces-model-mdas-education-ppt-powerpoint/
Planning – A Must in Recession Times : Planning – A Must in Recession Times Processes of planning – Inasmuch as the process of planning can be a thought provoking and a time consuming exercise, it has to be done. However, care must be taken not to be buried solely in planning, else it becomes syndrome or ‘planning malaise’, which will hinder productivity and returns or profitability. Small and micro firms’ Management carry out the planning process
Planning – A Must in Recession Times : Planning – A Must in Recession Times as an integral part of the job remit. While, large industries mostly have a department or unit solely responsible for planning.
The process of planning could are: bottom-up, top-down, flattened (general meeting).
The bottom–up process occurs when management empowers staff or rank and
Planning – A Must in Recession Times : Planning – A Must in Recession Times file to deliberate using brainstorming or departmental meetings as initial source of planning. Information gathered from various departments are passed onto management for the final global plan. This process has its advantages and disadvantages as listed on subsequent slides.
Planning – A Must in Recession Times : Planning – A Must in Recession Times Advantages
Empowers staff, who in return perceive the organisational plan as theirs. Invariably, work hard and are passionate in ensuring its realisation.
Inputs are realistic and achievable.
Breeds and strengthens the sense of belonging to the firm.
Planning – A Must in Recession Times : Planning – A Must in Recession Times Assist in reducing wastage and encouraging surplus.
Significantly will boost staff retention.
Increase innovation in products, in the form of new products and brands.
Planning – A Must in Recession Times : Planning – A Must in Recession Times Disadvantage
Parochial plans – departmental plans that are handed to management are departmentally oriented, because of lack of cross-departmental information sharing.
Departmental rivalry - Creates the ‘we versus them’ attitude of which is said not to be healthy.
Planning – A Must in Recession Times : Planning – A Must in Recession Times Top-down process – This is where management after sessions of brainstorming or meetings, a final organisational plan is formulated and imposed on the firm. In any case, planning forms part of the generic job descriptions of management. After plans are formulated by management and may be sent for approved or other wise by Board of Directors (BoD). Upon approval by BoD,
Planning – A Must in Recession Times : Planning – A Must in Recession Times it is disseminated and individual departments, line managers, supervisors, foremen, and operatives are tasked on proportionate bases. This process is also known as Management by Objectives (MBO). The accumulation of individual tasks through the various echelons will result in achieving the organisational goal as determined by management.
Planning – A Must in Recession Times : Planning – A Must in Recession Times On the other hand, if BoD expresses severe reservations against the organisational plan, it has to be re-worked upon for subsequent presentation. Meanwhile, the organisation is expected and should be seen as operating the existing plan which in tangent will be replaced with an approved version. Normally, if the BoD express minor reservations against the plan, they still give
Planning – A Must in Recession Times : Planning – A Must in Recession Times it an approval pending the changes to be made. Such minor changes do not delay or derail the operations of the plan.
Flattened (General meetings or durbars) – In extreme cases, some firms start the planning process by gathering preliminary information as concepts from durbars and general staff meetings. Thereafter, management fine tune the ideas collected into the organisational
Planning – A Must in Recession Times : Planning – A Must in Recession Times plan.
Theoretically, the planning process should be synonymous to the two-way communication systems, with the resultant being a realistic and effective plan that will presumably benefit all partners (customers, shareholders and staff).
Planning – A Must in Recession Times : Planning – A Must in Recession Times Achievable organisational goals – Plans must meet the common business school terminology as SMART. SMART is an acronym which is as follows;
S – Specific. Plans must be specific and not cryptic as earlier indicated.
M – Measurable. Plans must be preferably empirical, of which makes it scientific for
Planning – A Must in Recession Times : Planning – A Must in Recession Times accounting, determination of returns status, for monitoring and evaluation purposes. This way, changes to be made along the line could be justifiable.
A – Achievable. With the integration of the three planning processes earlier discussed, it is highly unlikely that the plan to be implemented can not be achievable.
Planning – A Must in Recession Times : Planning – A Must in Recession Times R – Realistic. Inasmuch as some plans formulated and to be implemented may be futuristic it does not necessary mean it is not realistic. Here, the maverick staffs will play an important role in communicating the complexity of the plan and its portrayal per models for the general will of all stakeholders (staff, customers, shareholders etc) to associate with it. Example, of Xerox
Planning – A Must in Recession Times : Planning – A Must in Recession Times and its disposition to new software languages as a brand different from their core business as photocopying. Also, space project communication to the United States of America (US) senators, white house and pentagon staffs.
T – Time. A significant number of plans are time bound say, one month, three years, five years or ten years. However, some
Planning – A Must in Recession Times : Planning – A Must in Recession Times contingency plans are event dependent. Instances as: A transnational corporation operating in a country which is known for periodic change of democratic governance for a despot. Another is rivalry forcing a firm to change their product and brand so as to remain competitive, without notifying BoD. Also, a short notice of business breaking ground news, which forces management to
Planning – A Must in Recession Times : Planning – A Must in Recession Times enter the novel product line for maximum returns as monopoly from early entry before competitors. Further, installation of emergency facilities offshore or in another geographical area, only awaiting havoc to strict the main operating position. The latter is important for financial institutions and firms with mass data. The other unused facility in space or another geographical
Planning – A Must in Recession Times : Planning – A Must in Recession Times location serves as the back-up for non-interruption of service and the inhibition of lost of clientele.
Simply, although it is worth defining plans with time, not all plans are time defined as the afore-mentioned situations.
Time bound – Since it is worth defining
Planning – A Must in Recession Times : Planning – A Must in Recession Times some plans with time, the time variation determines the type of plan and its role or position of execution. Here there are some known time determined plans as: Strategic, tactical and contingency plans.
Strategic planning has to do with the intended cognitive production map or direction of the organisation in the medium to long term (3 – 5 years). This is the
Planning – A Must in Recession Times : Planning – A Must in Recession Times preserve of management or departmental directors of the organisation. This is expressed as in the mission, vision and value statements. These statements serves as the cognitive map for the organisation in the medium to long term. They are combined with other systematic tools as PEST, Risk analyses and Porter’s five forces model among others.
Planning – A Must in Recession Times : Planning – A Must in Recession Times Tactical plan – Its the short term plans that are expected to be formulated and executed by frontline staff or line managers. However, such short lived plans are not expected to undermine the strategic plan of the organisation. Say, a restaurant that serves only Ghanaian dishes is faced with a request for continental dish buffet with two weeks notice and at a value of $5,000 for a
Planning – A Must in Recession Times : Planning – A Must in Recession Times corporate gathering. Such tactical decisions are within the ambient of the line manager or restaurant duty manager, if he or she defers the response awaiting approval from senior management, or turns down the offer with inexplicable reasons , is not worth a recession time line manager.
Tactical plans must be well explained to front line managers or duty managers, since
Planning – A Must in Recession Times : Planning – A Must in Recession Times there are the front of the organisation and that any short term gains based on unique opportunities must be welcomed.
Contingency plan – Although, much has been discussed earlier, it is worth noting that it is management’s responsibility to put in place exigency plans and ensure operational staff have all the requisite
Planning – A Must in Recession Times : Planning – A Must in Recession Times resources for use when needed.
Budgetary allocation - In most cases, firms always have tight budgets, hence they find it difficult to have and maintain a living contingency plan, let alone, allocate resources for it. Hence, contingency plans suffer when it is most needed.
Tunnel vision management- Since
Planning – A Must in Recession Times : Planning – A Must in Recession Times contingency plans are event dependent and the event’s occurrence itself is indeterminate, resources could be provided but not utilised for a long time. This circumstance tempts some managers to see resource allocation to contingency plans as tying down capital of which yields no returns. Therefore, based on their perception, they opt not to have
Planning – A Must in Recession Times : Planning – A Must in Recession Times contingency plans. Such managers loss their job the moment the unforeseen happens with the firm exposed.
Planning has become a must do activity in this recession times (2007 – ongoing) in other to keep the organisation running and satisfy customers, shareholders and staffs,
Planning – A Must in Recession Times : Planning – A Must in Recession Times else the organisation will be heading in any direction the Chief Executive Officer (CEO) or Managing Director (MD) dreams about, which is no different from ‘Anywhereland’ will do. ‘Anywherland’ includes keeping the organisation afloat, short lived success story and folding up (in administration).
Planning – A Must in Recession Times : Planning – A Must in Recession Times Plans when initiated must have an integral evaluative component in other to attain the organisational goals. In practice, plans are expected to go through the following triangular process as illustrated in figure 2.
The planning triangle establishes the various stages as;
Conceptualisation stage – Here information
Planning – A Must in Recession Times : Planning – A Must in Recession Times Planning triangular process
Management
Conceptualisation stage
Staff
Customers
Figure 2 Initiation stage Implementation stage Evaluation stage
Planning – A Must in Recession Times : Planning – A Must in Recession Times is gathered from customers, staff and management. Management discuss plans with staff and thereafter finalise the document and ready for implementation. There is full involvement of all staff in producing the organisational plan, hence enjoys the benefit of staff and management sense of belonging.
Planning – A Must in Recession Times : Planning – A Must in Recession Times Implementation stage – During the early period of implementation of plans, it must be noted that, this is the trial period. It is recommended that organisations involved in international trade must try their product(s) locally for medium term say two to three years, then identify the lapses and suitability for consumers through market research.
Planning – A Must in Recession Times : Planning – A Must in Recession Times Evaluation stage – Market researches to be conducted during the trial period forms the integral part of external evaluation and that of internal checks has to do with staff and management feedback from monitoring reports. Both periodic (evaluation) and daily (monitoring) reports presents information on problems, recommendations and emerging new ideas, of which if need be
Planning – A Must in Recession Times : Planning – A Must in Recession Times management uses for crises meeting and makes changes to plans. Such crises meeting involve not only management but also directly involved technocrats. After evaluation, if need be, the plan goes back into the conceptualisation stage again for changes. Then, back into the triangle as a living document and the latest version of the cognitive map of the organisation.
Planning – A Must in Recession Times : Planning – A Must in Recession Times The planning process though triangular it is a closed one that makes the organisation to survive and be competitive.
Thank you