P L A N N I N G

I N

N U T S H E L L

The purpose of this paper is to highlight the key elements of planning for those who are new to planning or as a review for experienced planners.

Michelangelo was a perfectionist and always inspired me... and he was a natural planner.  

The Sistine Chapel require massive planning and thought and he told his story well.

The Cheshire Cat was right. Think about it !

• "Would you tell me, please, which way I ought to walk from here?" asked Alice.
• "That depends a good deal on where you want to get to," said the Cat.
• "I don't much care where," said Alice.
• "Then it doesn't matter which way you walk," said the Cat.

Lewis Carroll - Alice in Wonderland

PLANNING - Everyone understands it. * Some accomplish segments of it. * Few execute the entire process successfully.

Planning is an opportunity to put into words everything you want to say about your organization. Its current status, its future, its image with the community and customers, the quality of its products or services. Its relationship with competition, its profitability, its financial strength, its expertise, its strengths and weaknesses.

I like to play a game to create a mind-set while preparing the planning process - I pretend I am asking someone for money for my business. The very largest to the very small organization (including an individual) needs capital or resources.., so the game works for everyone. The "lender" - banks, pension funds, additional shareholders, investment bankers, individuals - will want to know as much as possible about the organization, to assure themselves that the organization will be able to repay its borrowings.

Planning is a series of goals, from the most lofty visionary concept of an organization down to the goals of every staff member in the organization. Goals at all levels are critical in achieving success.

Every organization throughout history started with a basic concept of what it wanted to be. Perhaps the concept was not always clear and articulated, but a concept did exist. The concept, in most cases, is revised as an organization evolves.

Successful organizations have a clear vision of what they want to be and carry that vision down to every staff member. The various levels of planning documents, the mission statement, direction statements, business plans of units (products and functions), multi-level goals of individuals are all a series of coordinated goals.

Complex organizations will have a mission statement, which includes a specific vision or incorporates it as the theme of the mission statement. The vision of an organization is from the heart, an almost unachievable goal.

There may be many levels of planning documents following the mission statement. Such as, a direction statement for the overall organization and/or from major groups communicating broad strategies for the next ten years as a minimum. Supporting the direction statements are business plans for units, products, or functions that delve into much greater detail for a shorter time frame of not less than five years. Supporting the organizational and other business plans are individual goals at several levels.

The purpose of each level of planning is to carry the vision and mission statement in clearer and clearer terms down to each and every staff member.

• Vision
• Mission Statement
• Direction Statement(s)
• Business Plan(s)
• Marketing Plan
• Financial Plan
• Goals - Senior Staff
• Goals - Other Staff

An example of goal levels: A bank in California developed a mission statement with the "visionary" theme "The Quality Bank." The theme "The Quality Bank" describes the greatness it was striving for, the mission statement then went on to list nine specific quality items supporting its visionary theme. The bank chose not to prepare an overall direction statement, content with the mission statement and left preparing direction statements to the five major groups whose senior officers were members of the bank's close, well informed Managing Committee .

A major unit: The California Banking Group's direction statement (336 branches, $10 billion in assets, 8,000 employees representing 50% of the bank) was broad based and planned for at least ten years ahead. The group's direction statement was 15 pages in length and a portion of it discussed a philosophy on branching.

The Branching Product Manager within the group prepared a supporting branch banking business plan (function) that outlined the branching strategy for the next five years, identifying 90 locations, identifying the type of branch, such as commercial or consumer and the specific branch design. The business plan for branching was coordinated with regional managers ( who possess veto power), corporate facilities and the bank's overall budget.

The group manager prepared his personal goals and distributed them along with the group's direction statement to 2,000 officers within the group. Regional and unit managers distributed their personal goals to their staffs to make it easier for the staff to prepare their goals, which would coordinate with the group's direction statement and the bank's mission statement. Communicating is a key element in successful planning.

SMALL ORGANIZATIONS

Too often small business believe planning is for large organizations. That is a misnomer... no matter how small the organization, it, as a minimum, should have at least three levels of the planning process. A mission statement, a business plan, and specific individual goals.

Clearly the planning process will be much simpler, the smaller the business, but all the ingredients of the planning process must be included.

Very small organizations and single, self-employed individuals may do well to form a permanent group of others in the same situation to share their plans and goals, seeking advice and guidance from one another. The group should then meet periodically, at least once a month and share their progress towards their goals. The participants need not be in the same business, just dedicated to their organization and fair in dealing with others in the group. One group of four that I know of call themselves "Goal Diggers."

PLANNING IS A CONTINUOUS PROCESS... NOT AN EVENT

The Planning Process
A graphic of the planning process.

A major downfall that occurs with most organizations is that planning becomes an annual event. It's exciting during its development, but a useless tool if it gathers dust on the shelf for the remainder of the year.

To be effective, planning must include the following elements:

• The development of the process must be participative with overlapping levels of authority; achieving "buy in."
• A well thought out mission statement that contains the vision of the organization.
• A review of the environment, both internally and externally.
• An organizational and/or major group direction statements.
• If appropriate, business plans for units, products or functions. Always a minimum of one.
• Individual goals, reviewed quarterly as a minimum.
• Review each goal in the planning process to assure that it passes the following tests:

Specific - Measurable - Actionable - Realistic - Timely

Coordinated at all levels, with all supporting units.

Resources are available that will be budgeted.

• An understanding of taking advantage of opportunities
• Flexible enough to understand the value of opportunity.
• A continuous and disciplined process, with reviews to check on progress and a commitment to execute it.

UTILIZATION of planning documents.

They are tools to communicate to:

Shareholders - analysts - community - media - bankers - board of directors - staff - regulators - marketplace.

PARTICIPANTS

Each level of the planning process must be a participative team effort of at least two levels; such as, the mission statement... CEO and senior staff; a direction statement... Group manager and senior staff; business plans for units, products, functions... manager and senior staff; and, goals... supervisor and individual.

THE VISION

The vision statement is from the heart, an almost unachievable goal of what we want our organization to be. It is from this lofty ideal that we should drive the entire organization. It is what we aspire to be. It would have been interesting to have talked to Walt Disney and discussed his "vision" and how it evolved over the years. Could he have envisioned what we know as "Disney" his first day of business? After being successful, one might remember one's original vision differently.

THE MISSION STATEMENT

A statement that clearly outlines the vision, direction, image and purpose of an organization that can be understood and implemented by the entire organization. The staff cannot embrace a strategy if they do not know what it is.

Leadership is a critical key to success. What is said in a mission statement is important, how it is executed in action and words is much more important. One of the many key elements of leadership is leading a group of people in achieving common goals.

The mission statement should not exceed one page, it should be typeset in an aesthetically pleasing format and widely distributed.

Some things to include in the mission statement and to support the visionary theme:

• Short and long term key objectives
• Profit objectives
• Something for customers, owners, staff and community
• A balance between the mission statement and subsequent planning documents.

Some things to consider:

• Market capacity
• Environment, internal and external
• What business are we really in?

What the mission statement affects:

• Direction statements; business plans for units, products and functions; individual goals
• Policies (writing of policies is overlooked in many cases)
• Decision making
• Team work
• Success

THE NEXT STEPS ARE WHAT YOU NEED FOR "YOUR" ORGANIZATION

It would be difficult for anyone to specify how many levels of direction statements and business plans are needed between the mission statement and individual goals, unless you are dealing with a specific organization. There could be as many as five or as a minimum, one.

DIRECTION STATEMENTS - Organization, Major Units

Within larger organizations there may be more than one direction statement - one for the overall organization and for large, complex line groups who really need their own direction statement. From these direction statements business plans will be prepared by units, products and functions.

BUSINESS PLANS - Units, Products, Functions

Units, specific products or functions within a group follow with very detailed plans such as the branch locations department in the bank previously mentioned.

The basic parts of a business plan are:

• A good description of the business so the reader understands the remaining document.
• An overview that supports the mission statement. General direction of the organization.
• The environment review, internal and external. Weaknesses & strengths.
• By functions, products or services - comments on:

  Growth, geographic expansion, acquisitions, pricing, delivery systems, productivity, product management, resources needed, service, quality, capital, technology, research & development, market share, sales, costs, information/data needed to manage the organization, demographics, data warehousing and customer trends, marketing and advertising strategy (supported by a detailed marketing plan) organizational structure, community & social considerations, government, regulations, new products, branding and........?.

• Staff. Key personnel. The staff in general - quality, morale, training, compensation, turnover, costs.
• Earnings (supported by a detailed financial plan).
• What the future holds.
• Summary.

Large Organizations: Non-line units such as data processing, human resources, financial and public relations must work closely with line units as they prepare their planning documents to assure close coordination. These non-line units can only prepare their planning documents after the line units so they know specifically the direction of the organization and the line units they will be supporting.

SETTING AND ASSIGNING GOALS

Only "people" make things happen, therefore people must have goals that they are responsible for. There are two types of individual goals: assigned and created. Through out the various documents produced in the planning process, commitments are made and those commitments or goals must be assigned to an individual. Created goals are those the individual, with and agreed upon by the supervisor, creates to support the organizations mission statement, business plan and overall direction.

INDIVIDUAL GOALS

Goals for individuals should be simple and limited to one sheet of paper. The goal may be simply stated, bearing in mind that they are agreed upon between the supervisor and subordinate, who should understand each other and the substance of the goals. In addition to the goal, several activities should be listed as to how each goal will be achieved.

Quarterly, the preparor indicates the percentage progress made toward the goal, forwarding a copy to his or her supervisor, who after review, schedules a meeting to discuss the goals and progress made to date.

Personal Goals . Assigned and Created
A one page graphic that is utilized to prepare and follow personal goals.

A personal goal. An interesting technique that will surprise even the most skeptical among us is to give those completing a set of business goals an option to include a personal goal. The goal can be anything; losing weight, saving for a trip or learning to fly.

If you try this you will be amazed at the number of staff members who will participate. Two positive events occur. One, the personal goal is accomplished in most cases because it was declared publicly, so to speak. Two, supervisor and subordinate develop a closer personal relationship.

An observation on goals. In most cases a poor performance can be shared by the supervisor due to the improper setting of goals, poor support and the lack of corrective action taken during quarterly reviews (or more often if the subordinate is not making the proper progress).

THE ENVIRONMENT

An environmental review, both internal and external, is a critical aspect of planning. This review facilitates decision making.

A sample of environmental issues.

Internal External

• Current mission statement
• Where are long term profits coming from?
• Capital
• Staff and key personnel
• Product lines, life cycles, new products
• Quality
• Innovation spirit
• Operating issues, doing things right
• Operating policies
• Service levels
• Marketing ability
• Maximizing current customer base
• Data management, information
• Delivery Systems
• Resources
• Branding
• Facilities

External

• Economy
• Competition
• Costs, materials, services, fuel
• Government - Regulations, Taxes, Safety
• Industry crossroads
• Perception within the Industry
• Technology
• Community, Social issues
• Ethnic issues
• Opportunities for change
• Takeover candidate
• Customer requirements, attitudes
• Distribution channels
• Delivery systems
• Environmental issues
• Raw Materials
• Infrastructure critical to the organization

Each level of planning needs to review the environment as it will impact each level differently and each level will have its own environmental issues.

DEVELOPMENT OF MISSION STATEMENTS, DIRECTION STATEMENTS, BUSINESS PLANS AND GOALS

All levels of the planning process must go through a development process. All of the elements are important, but the key elements are the action plans and communications.

Environment

• Key Issues, what are they?
• Internal
• External

Decisions

• Commit
• Action Plans

Develop Strategies & Alternatives

• Evaluation Systems
• Time Frames
• Budgets

Implementation

• Final Plans
• Communications

GATHERING DATA FOR PLANNING AT EACH LEVEL

Utilizing a facilitator (internal or external), key staff members, overlapping in authority, meet in free-flowing sessions that record data on "flip chart" sheets, which, when full, are taped to the walls to keep all data visible. From these sheets the facilitator organizes the data and begins drafting documents. The drafts are reviewed with the original participants and are refined as often as needed , until a final document is agreed upon.

SUPPORT AND A LOGO

The best prepared planning documents do little for any organization unless all the people within the organization are motivated to succeed by completing their goals.

Management must at all times support the planning documents in words and actions.

A logo that symbolizes and brands your visionary statement is extremely important in the planning process and is a constant visual reinforcement. The logo can be utilized as a lapel pin, on watches, desk pieces or a host of other applications. Without any encouragement by management the logo will show up on presentations, T-shirts at the company picnic, and other creative uses.. If you have never utilized a logo for specific programs in your business career, try it. It works.

For the California bank, the TQB worked well for a lapel pin and the overall logo for many other applications, including being painted floor to ceiling in non public units.

MOTIVATION

Partners... planning and motivation. Good planning is a key to motivating employees. Motivated employees are highly productive employees. Productive organizations are profitable organizations.

Some common sense motivation:

• People want to know what is expected of them, tell them.
• People want to achieve, give them a goal and a chance.
• People want to be noticed, pay attention to them.
• People want to care, care and they will care
• People want to be appreciated, say "Thanks."
• People want to have fun, have fun, use logos, pins, rallies ...... it works.

MARKETING PLAN

The marketing plan outlines the strategy of how the organization or an individual intends to create product or service awareness in the marketplace and to sell its product or service to that marketplace. The marketplace is the ultimate test.

An enormous effort must be undertaken to prepare a useful marketing plan. The marketing plan is a major part of planning, however, it is impossible to do it justice in this document, therefore key subjects are highlighted that are critical to include in a good marketing plan :

• Demographics and trends, attitudes of current customers and prospects.
• Current market share and future goals, including expansion into new geographic locations.
• Target markets (specific names if possible - i.e. non mass consumer - and assigned to an individual)
• Branding, public relations, imaging, advertising, collateral materials, logos.
• Product or service quality.
• Pricing. Packaging.
• Sales personnel, training and sales tools.
• Delivery systems - distribution channels.
• Resources (and capital) required and its availability (approved budget).
• Competition and its impact (market share, earnings, pricing, quality, etc.)

ONE LAST THOUGHT

My organization does not plan, What Can I Do? You can take charge of your life.

Staff members of organizations should not be discouraged if their superiors have no planning system in place or a weak planning system. You can install a quality planning process for your unit.