Tag Archives: planning

What Are Your Intentions? – 2017 Planning Guide

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It’s 2017. What are your intentions?

Benefits to planning –

  • Gain agreement from stakeholders on what is necessary to be achieved.
  • Gain agreement on reality. No plan survives its train-wreck with reality.
  • Gain agreement on how we will know. Really, how will we know? What are the measurements, key performance indicators.

Blocks to planning –

  • We don’t have time.
  • Actual results never meet the plan.
  • We might be held accountable for what we said.

You decide.-Tom

If you would like some help, you can download the planning template here. 2017 Planning Template

The Value of One Year into the Future

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“Why is it important for a Manager to think one year into the future?” I asked.

Melanie had finally opened her mind to discovery. “If I had been thinking out a year, I could have had conversations with my supervisors a long time before they quit. I would have known what changes to make to keep them challenged. I didn’t think they would be interested in learning new things and stepping into more difficult projects.”

“So, if I asked you, as a Manager, to take a single piece of paper and chart out your team members, think about their capabilities and interests, and develop a one year plan for each one, could you do it?”

“Well, yes, but I would probably have to talk to each person, to make sure I was on target, it’s going to take some time,” Melanie replied.

“So, what do you have to do that is more important?” -Tom

Difference Between Preparation and Planning?

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“Did you ask about preparation?” I asked.

“Preparation? You mean planning? I asked questions about planning,” Erin replied. “And that’s why I am concerned. The person we hired had created a number of plans. Project plans, operational plans, personnel plans. But now, in the role, this person is failing.”

“Preparation is different from planning,” I suggested. “We can plan til the cows come home, but if we are not prepared, life will take us sideways. Did you ask about preparation?”

“I am not sure what you mean,” Erin was curious.

“There are some things we can plan for, but many things that are out of our control. We cannot plan for those things out of our control, we can only prepare. Some people can face the same challenge ten times, but on the eleventh time, are still not prepared. Others can face a brand new challenge, one they could not have planned for, yet they can handle the uncertainty, because they are prepared. Did you ask about preparation?”

What Has Changed Around You?

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Andrew was still upset. The contract was lost and there was nothing he could do about it. He had lost his appeal with the purchasing agent, the procurement manager and the director of operations.

“We did everything by the book,” he said. “This is the way we have earned all of our major contracts. Our reputation is stellar. I can’t believe this is happening.”

“You got sucker-punched,” I observed.

“What?” Andrew replied.

“Sucker-punched,” I repeated. “We often think that our future success lies in the fact that we had one small string of successes in the past. We think that the curve in front of us continues upward without hesitation. We do not realize that, as we continue to do things the way we have always done, the world subtly changes. The nuances of the deal creep up, new players enter the game without detection, and suddenly we are on our ass.” Andrew’s face showed no emotion on the outside, but his eyes betrayed a growing realization.

“There is good news, though,” I continued. “This is not a game. This is life. In a game, there are few second chances. The final period has an ending, even overtime is sudden death.

“In life, in business, there are lots of second chances and the final period can be extended. But only if you stop thinking about your past success and start thinking about what has changed around you.”

The Futility of Planning

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“Planning in this day and age is futile,” Reggie complained. “The world changes so fast in these times, with technology, what is the point of thinking five years into the future?”

“Indeed,” I replied. “Do you think technology will be different five years from now?”

“Absolutely. So what’s the point thinking about decisions five years from now?” Reggie continued his protest.

“So, you think a decision made today might be wrong, five years from now?”

“Of course. Things change.”

“What kind of things?” I prompted.

“Technology drives all kinds of change, in the way we communicate, the speed of information, the precision of measurement. It changes our methods, our systems, our reach, our scope.”

“So, if we don’t think about those things in the future, we might make the wrong decision today?”

Reggie stopped. His head turned around. “You’re right. Planning is not about making a decision five years from now. Planning is about making a decision today.”

The Connection Between Time Span and Outcomes

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From the Ask Tom mailbag –

Question:
Thank you for your presentation to our group. I enjoyed it very much. It strikes me that while I like the concept of time span, generally, the concept of time is relative and it’s really about being able to see down the road of potential outcomes regardless of the time-frame.

Response:
Your thinking is on the right track and you have made the connection between time span (time-frame) and potential outcomes. Let’s take it a bit further.

In a short time span project, there may be several outcomes, but the characteristics of those outcomes are concrete and tangible. In a longer time span project, the possible outcomes multiply in number with less defined characteristics.

If an audio-visual contractor bids on a contract for a audio-visual setup, 65 inch hole in the wall, with a project deadline in three months time, what goes in the hole?

  • The technology is certain – plasma, LCD, LED-LCD, OLED, QDLED
  • The display is certain – CRT, flat screen, front projection, rear projection
  • The display surface is certain – reflective surface, flat surface, curved surface
  • The manufacturer is certain – Sony, Mitsubishi, JVC, Samsung, LG, Panasonic

There are a number of possible outcomes.

If an audio-visual contractor bids on a contract for an audio-visual setup, 65 inch hole in the wall, with a project deadline in five years time (a commercial project still in the design phase, hasn’t broken ground), what goes in the hole?

  • What will be the display technology in five years time?
  • What will be the surface technology in five years time, will there even be a surface, holographic?
  • Who will be the manufacturers in five years time?

There are a number of possible outcomes, but the characteristics are more uncertain. There is ambiguity and uncertainty. So, here is the question –

Given the ambiguity and uncertainty in this project, should the audio-visual contractor accept the contract with a deadline in five years time?

Some contractors would pass, saying there is too much uncertainty, no way to say what the project will look like. Some contractors, comfortable with ambiguity and with the internal capability to adapt to emerging technologies would gladly accept the project. What is the difference in the thinking? What is the difference in the organizations?

Who Will Happen?

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“Who will our company leaders be in twenty years?” I asked. “Who will our company leaders be in five years?”

There were puzzled faces around the room. “Well, it’s going to be whoever steps up,” said a voice from the back of the room.

“What if that person is not currently employed here, and you have to promote someone without the capability to be effective in those roles?”

“I guess we will have to go to the outside and recruit,” came another voice.

“And, when will you know you need to do that?” I pressed.

“Maybe, we should get a committee together in a couple of years to look into our succession planning,” said someone from the front.

“Not good enough,” I nodded. “I want to see a personnel plan from every manager, every year. A rolling plan one year out, three years out and five years out. Do we need new roles on the team, do we need to take some roles away? Which personnel are operating effectively, who needs a new challenge, who needs to be liberated to industry? What roles will be replaced by technology? What growth or contraction do we expect?

“You see, succession happens all over the organization. It’s not just top leadership. Your technicians become team leaders, your team leaders become supervisors, your supervisors become managers, your managers become executive managers. Succession happens at each level of work over time.

“Planning for what will happen is not nearly as important as planning for who will happen.”

How to Plan More Than One Year Out?

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From the Ask Tom mailbag –

Question:
We just completed our strategic planning session, the output, a set of goals. And, as you predicted, all of our goals have a time frame of less than six months. How do we get our thinking out more than one year? How do we get our thinking out more than three or four years?

Response:
It’s a problem. Most companies are so results oriented, focused on tangible, concrete results, that thinking out four to five years is difficult.

It is actually a different language, one we are not accustomed to. One CEO friend of mine constantly poo-poos the idea of planning beyond six months. Here is the dynamic and why strategic thinking is so difficult.

In the near term, things, people, technology are all known elements, we can call them by name. They are concrete and tangible. The further we travel into the future, in our imaginations, the less distinct, the more ambiguous things become. If we travel far enough into the future, precise definition gives way to conceptual elements.

We no longer know who the customers will be in five years, but we will likely have customers. We do not know the exact features of our products in five years, but we will likely have a product offering. The market may not have the same requirements five years from now, but there will, indeed, be market needs.

The discussion turns from a tangible, concrete discussion to a conceptual discussion. And we do not practice conceptual talking (thinking) very often. Talking conceptually is awkward. It might even appear pointless. That is because we do not practice.

Thinking out twenty years is a useful step. Thinking out twenty years gives us permission to abandon our current thinking. So, take the year 2035. To ground this thinking, how old will you be? Now, simply imagine. What will transportation be like? What will communication be like? What will travel be like? What will food be like? What will agriculture be like? What will medicine be like? What will your industry be like? What will your products be like? What will your service be like? Who will be your company leaders in twenty years? Are they in your company or outside of your company? How old are they now?

Thinking out twenty years gives you permission to think differently. Thinking out twenty years gives you permission to think out five years in a new way.

The Uncertainty of the Future

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“You look absorbed in something,” I observed.

Abbe looked up from her desk. “Yes, I have this project coming up. Never worked on a project like this before. Don’t know anyone who has worked on a project like this before. Risky. Not devastating risk, but this project could go sideways fast.”

“And?” I asked.

“I am trying to think about projects we have completed in the past that could help me figure out this new project,” she replied.

“Looking for patterns in past projects will only help you so much. It helps you understand the past. But we live, going forward into the future. And we cannot predict the future. There is uncertainty and ambiguity. Planning helps, but even the best plan rarely survives its train-wreck with reality. We cannot control the future. The best we can do is be clear about our intentions. And prepare ourselves for that uncertainty.”

Are Budgets Necessary?

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From the Ask Tom mailbag –

Question:
We are looking at our planning scenarios for next year, and one question we have is the value of creating a budget. Doesn’t it make more sense just to print comparative reports year over year rather than spend the time to create something new?

Response:
I always go back to purpose. What is the purpose for a budget? What are the questions we ask ourselves as we look forward to next year?

  • What is our market? Size of market? (Facts or assumptions)
  • What macroeconomic factors impact our market?
  • How much of that market can we expect to earn with our product or service?
  • Is our product or service something that can impact the market (materially) different than in the past, with a disruptive technology or delivery method? Or is it a product or service with a maintenance track that will substantially see similar volume to last year?
  • Given our assumptions about our revenue levels, what is the appropriate cost structure to deliver our promises in the marketplace?
  • Does that cost structure deliver the gross and net profit levels, appropriate to the risk, and within the return on (investment, assets) that we believe appropriate?
  • Is there a disruptive (to our market) cost that we are willing to suffer that might dramatically impact our positive ability to sell or take marketshare? Like a warranty program or alternate delivery method, like air freight for a heavy product? I know it might be heavy, but the question of air freight might spark an idea.

I see budgeting as a bit of realism for our strategic decisions. The purpose of budgeting is to help us make those decisions. As a post-mortem, budgeting helps us check our assumptions (were they wrong or confirmed) and how well did we execute on the decisions we made.

When I am working on this process with a company, a quarterly shakedown on the questions (above) help us deal with reality and adjust (our assumptions, our efforts, our cost structure, our decisions). In a stable, incremental business model, year over year may be a satisfactory approach. Where the business model is seeing dramatic disruption, by economics, technology, largess competition, regulation or other factors, a zero-base approach may be appropriate.

Budgets ARE necessary as a measurement to check our assumptions and aspirations in the market.
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