I was talking to a client recently, and the conversation turned to the planning system.  As I have often found before in similar conversations, the client was frustrated by his experiences.Wondering how on earth a process could be so lengthy and onerous, and yet produce little real value for their day-to-day work.  Like others before him, he perceived the annual plan as a bureaucratic requirement imposed by a distant corporate office, not as an engaging thinking process that would help shape and clarify his work for the year ahead.

Ironically, though almost everyone undertakes planning at some point in their management careers, very few have really stopped to consider about what planning is, what it contributes to the life of an organisation, and how it can be made into an effective and satisfying process.   Planning is one of the central knowledge systems in any organisation, one of the key contexts in which effective strategic and operational thinking and decision-making should occur – yet all too often it feels like an unproductive, bureaucratic activity.

A useful place to start in terms of improving any knowledge system is to think about what questions you need it to answer, and then to redesign it to answer a better quality of question.  The typical sorts of topics and questions that most planning systems try to answer include:

Activities and outcomes

·       What performance outcomes do we need to achieve?

·       What activities do we need to undertake over the next 12 months to achieve these outcomes?

Costs

·       What will it cost to undertake our planned activities?

·       Where can we cut our costs or reduce our ambitions to balance the budget?

As the last two questions highlight, much planning activity and discussion is really about budgeting, and because planning is often managed by the finance department, it ends up consisting of a lot of financial data entry and backroom finessing of budget spreadsheets.   And because budgets tend to be focused on departments and line items, the planning process tends to be fragmented, localised and heavily focused on detail.

Here’s a different set of topics and questions that have the potential to transform the approach to how we do planning:

Strategic direction

·       Do we have a clear view about the direction we need to head in as a business?

·       What do we need to do to build tomorrow’s business while still running today’s effectively?  What is the right balance between these two activities?

Arguments

·       Do we have strong hypotheses about the best way to achieve our desired outcomes (whether short-term or long-term)?

·       Have we considered other hypotheses, and understand why we have chosen the ones we have?

·       Have we learned anything about what works and what doesn’t since our last plan?  Are we building stronger hypotheses over time?

Alignment

·       Do we have clear visibility about all the activities that we will be expected to implement, not just from our own plan, but across the business as a whole?

·       Are all the various activities proposed by the various business units aligned?  Is there any unnecessary duplication?

Engagement

·       Have the people in the business who will play a major role in implementing the planned activities been engaged in developing them?  Do they believe that the proposed activities are the right thing to do?

·       Are we comfortable with and/or committed to the amount of resources (both people and dollars) that will be required to implement our plans?  If we are not, do we have a good process for deciding what not to do, and some robust criteria for making the decision?

A planning system that is able to address these topics and provide positive answers to the individual questions will be radically different, and I would argue, far more effective, than most of what passes for planning in today’s organisations.

How does your planning system shape up?