By Eric A. Denniston, Managing Director, Denner Group International 3-22-2013
how you think matters when doing business planning
Takeaways: Gain clarity in how the type of thinking can affect the outcomes of your work and planning for your business. Get some insight about the importance of skill building in how you think.
Haven’t you heard? Businesses have stopped doing any planning. Why bother? It eats up resources of time, and also money if you get outside help, especially for strategic or long-term planning. It’s distracting from the work at hand. It’s complicated. We can do it on our own. And then…someone writes the plan up and it’s forgotten! Sound familiar?
This is called a paradigm, which just means that it’s a pattern, or model or a series of practices that we accept as a community. What’s important is that it’s a pattern that we accept and follow because we keep our thinking rooted in today’s and tomorrow’s sales, profits, successes and results. The short-term outcomes.
What ‘s important is that it’s a pattern that we live with because we DON’T think about what our customers will want from us in three, or five or ten years. I’m not talking about the next iPhone we will invent. I’m talking about the next step in delivering quality and value to our customer. The quality and value that will keep our current customers coming back and new customers to seek us out. The quality and value that will make our vendors and other stakeholders want our business, because we’ll be growing. The quality and value that will make workers want to work for us instead of someone else. The quality and value that permits us to improve our lives, those of our employees, and those of others. The quality and value that motivates us and others to do even better.
When we DON’T devote the time and invest the resources in THINKING and ACTING in a manner that supports creating that FUTURE quality and value for our customers, we are failing to create a sustainable business. In today’s world, any business that does not seek out AND create its own change is doomed at least to continued mediocre performance – if not outright failure.
So why state that “Planning is dead”? Most likely, these words are not new to you. Perhaps what might be new or only somewhat familiar to you is that there are two acknowledged styles of thinking when it comes to managing a business. They are tactical thinking and strategic thinking. And don’t think it’s as easy as saying that tactical is short term and strategic is long term, because they are both short and long term, only to different degrees.
Learn to Think strategically
Why is a style of thinking important in planning? Consider this: If you are REALLY going to focus on long term planning, shouldn’t you do just that, FOCUS ON THE LONG TERM? Perhaps to the exclusion or near exclusion of the short term? If you have tried this, you know it’s nearly impossible to accomplish excluding one from the other. The good news is there are skills you can apply to your thinking style to adapt the style that is most appropriate to the task at hand.
For example, let’s say you are working on an issue involving the design of a critical part for a machine and the result of the solution, once attained, will produce the perfect part. To address this, you would primarily apply tactical thinking to break the problem down into discreet parts (materials, measurements, manufacturing processes), solve for each part, and then test until you know you are done. A secondary type of thinking would also be applied here to make sure the manufacture of this part is going to fit into the whole system that the part must operate in. Maybe it’s an engine for a vehicle, and making this part affects how the engine is designed and assembled. Can you see the interrelationships here? What you plan to do is design a part that is perfect for the application. That design comes about in a relatively short time; however you have applied both tactical and strategic thinking to resolving the design issues.
You, or perhaps a coworker in another department, are responsible for making sure the part you design meets certain strategic criteria. Here the strategic thinking part of the planning will be looking at the whole system, perhaps the engine, the vehicle(s) that will be using the engine, the operating environments intended for the vehicles, and the geographic markets it is intended for, instead of addressing the discreet parts of the problem. Maybe you can see how the short term and long term views overlap here. It’s not black and white, short and long. It’s a mixture, or a blend of the two.
This is why it is valuable to learn the skills to think and act tactically and the skills to think and act strategically. What is more important is to know the difference and when to use or apply which one and how to blend them when necessary. This skill building will also drive home the importance of devoting the time, resources and effort to carry out disciplined long term planning for your business
Planning next month’s sales is just as important as planning next year’s expansion program. Granted, it’s easier to see next month’s sales, but if you don’t spend time planning and creating the changes necessary to meet the demands required for next year’s expansion, the expansion very likely will either not happen at all, or will be far below expectations, or dreams.
So don’t let planning die! Learn some of the tricks of the trade. Thinking is one of them. Get help from experts. Devote the time. Spend the money. Train yourself, train others in your business, and build the skills for planning in your firm for next year and beyond. Most importantly, set schedules to review and update plans to keep the documents alive and out of the credenza.
Good planning involves clarity and focus in your thinking, discipline in working and adjusting the plans, and keeping it all simple. Single page documents for tracking, not long reports. Use digital tools for sharing information whenever possible, there are many cost effective tools out there. And, perhaps just as you see an attorney or an accountant for specialized advice, tap your favorite management consultant or strategic planning advisor on the shoulder from time to time and ask for help.
And, remember these four steps, which you take in order then circle around and repeat them again and again: LEAD – THINK – PLAN – ACT. There must be a reason that the Association for Strategic Planning has that as their motto.