The Planning Dilemma

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We believe a healthy society requires healthy and responsible companies that effectively pursue long-term goals. Yet in recent years, boards, managers, shareholders with varying agendas, and regulators, all, to one degree or another, have allowed short-term considerations to overwhelm the desirable long-term growth and sustainable profit objectives of the corporation. (1) 

These are the opening lines in a call-for-action produced by the Aspen Institute, a respected international educational and policy studies organisation with a mission to foster leadership based on enduring values. Backers of the call included luminaries like Warren Buffett, James D. Wolfensohn and Bill George, plus a host of other leading international business, academic and political figures. This represents one of the many voices now railing against the folly of short-termism.

Every business owner or manager understands the need to step back and look at the bigger picture on a regular basis, to think strategically and then to plan accordingly. In fact, few would disagree that looking to the future is vital. No, there is no argument on that front; a critical role for any senior manager is not to get caught up solely with the nitty-gritty of the here and now but rather to focus too on what’s potentially out there on the horizon. Sadly, that’s not how the reality of business life works for many managers. In fact, here’s a flavour of some of the challenges I have heard raised in recent times:

  • Looking out onto the horizon becomes difficult when you have over 200 emails bombarding your inbox every day – many of which are pointless, but all need to be read, or at least scanned through.
  • Looking out onto the horizon becomes difficult when cutbacks in management numbers over recent times now means that you spend much of your day doing work that others used to do.
  • Looking out onto the horizon becomes difficult when your day is continuously hijacked by one meeting after another, so much so that you often only get down to your own work just as everyone else is heading home.
  • Looking out onto the horizon becomes difficult when you have to face the board every four weeks and justify last month’s numbers.

These are just some of the real and practical challenges that I have discussed with various managers as they rightly bemoaned the fact that whilst they are supposedly paid to think and act ‘strategically’, much of their focus has to be on short-term performance. In fact, the paradoxes of planning can also include:

  • The need to focus on a longer term vision yet decide what needs to be done in the short term
  • The need to use hard data for decision making yet allow room for intuition
  • The need to consult widely and involve others without allowing the process to become unwieldy
  • The need to be optimistic when planning yet retain a strong sense of realism
  • The need to set specific goals and targets but remain adaptive to the changing environment
  • The need to make profit the key outcome from the business but not the only rationale for it.

These are some typical challenges faced by all managers and regardless of the difficulties associated with planning, lack of future focus is extremely damaging for business performance. To address some of the problems associated with planning, today I will focus on a simple model which can help any manager integrate strategic and annual planning in a meaningful way.

Insights Matter

First, before you can do any form of planning, it is simply not possible to do it well without insights; and insights come from having multi-source data to support decision-making. In other words, you need to really understand your current position  in relation to all aspects of the business before you start focusing on planning for the future. This, in part, involves looking internally at your strengths and weaknesses in terms of all aspects of business performance, such as financial, marketing, employees, products and services, etc. It also entails being externally focused and identifying opportunities and threats with regard to the economic environment, industry and market trends, customers, competitors and so on. You cannot devise plans of any kind if you don’t know how you are performing at present.

A Simple Planning Model

To provide a simple framework to guide your planning efforts, the first point to make here is that any planning you do needs to address five critical dimensions of the business:

No matter what business you are in, everything of importance falls into one of these dimensions and it is vital to ensure that you have an integrated plan that addresses all five components. The SOAR Planning Framework has the following stages:

  • Understand the Strategic context for all planning efforts (Define Strategic Goals)
  • Focus on desired Outcomes first (Identify sub-goals for the coming year)
  • Define the main Activities to realise those outcomes (What actions are needed this year to achieve the sub-goals)
  • Track progress and Results

It is a straightforward model but captures best practices and addresses important issues such as avoiding short-termism, lack of follow through, lack of ownership of targets etc. In greater detail the planning framework has the following components:

Strategic Context

  • Be clear about the vision and mission for your business
  • Understand the strategic context – the 3/5 year plan – Identify key strategic goals.
  • Define past successes, and outline the broad priorities for the business in the year ahead across five dimensions (Finance, Marketing, Customer, People and Operations).

The strategic context should guide absolutely everything you do and when you plan each year you do so on the basis of moving towards your strategic goals:

Outcomes defined

  • Focus first not on what needs to be ‘done’ in the coming year, but specifically on what must be ‘achieved’ against each of the five dimensions – (Finance, Marketing, Customer, People and Operations) – Begin with the end in mind.
  • To do that, set specific and measurable sub-goals for coming year under the  dimensions.( If a strategic goals requires X to be achieved in three years, then what has to be delivered in the coming year).  ‘Less is more’ here and it’s important not to have too many sub-goals.
  • Think about what measures of success will be applied to each goal?

Activities agreed

  • Define the key tasks associated with achieving each sub-goal – brainstorm the range of things to be done
  • With the key tasks defined for each sub-goal, think of the relationship between them. Must certain tasks be completed before others? Are some tasks more challenging than others?
  • What resources are required for these key tasks?
  • Finally, schedule in when these tasks are to be completed. At this stage think Q1, Q2 etc.

Results tracked

  • Use the measures identified earlier to track progress towards the sub-goals on an on-going basis
  • Undertake a more detailed review of progress against the actions and expected outcomes on a quarterly basis.

This SOAR model a simple but effective planning framework which combines key elements of more complex models such as EFQM or Balanced Scorecard but avoids over-use of terminology that might put people off. It helps to create meaningful links between strategic goals and what you are aiming to achieve in the coming year (sub-goals). In addition, this approach will encourage all senior managers within the business to become more goal-oriented across the five dimensions – Financial, Marketing, Customer, People, and Operations.

You could even use this basic two-page template to capture the plans across the five dimensions:

Page 1

Page 2

Whatever planning model you adopt, don’t underestimate the importance too of measuring progress along the way and that’s why attaching measures to each of your annual sub-goals is so important. Here’s a thought on measurement. In Corporate Governance Matters, a book by two leading Stanford professors, (2) a case study is provided to highlight how managers of a fast food chain got things wrong on the measurement side of things. From their experience, the senior executives in the chain understood that customer satisfaction was an important driver of profitability and they ‘knew’ that low employee turnover was a key driver of satisfaction – so the managers used employee turnover as a key performance measure and as a result allocated a lot of resources to keeping that figure low. But, when they later received detailed performance results for restaurants across the chain they found that some outlets with high employee turnover were amongst the most profitable and others with a lower turnover had poor profitability. Detailed statistical analysis of the results later showed that it was actually turnover amongst restaurant managers and not employees as a whole that made the difference to customer satisfaction and therefore to profitability. Be sure you measurewhat matters most in your business.

There is no pretence that creating winning strategic and annual plans for your business is easy, but the planning process itself should not be so shrouded in complexity that only a few within the company actually understand it, or know how they can meaningfully contribute. It is a process that should involve everyone in the business, in a manner appropriate to their level and expertise, and integrating strategic and annual planning should be part of what you do every day, not separate from it. In my experience, when planning is something that only a few managers ‘do’, or when it’s only discussed a couple of times a year, then that is problematic. Strategic and annual planning  should be the lens through which you view all aspects of your business and against which you hold all discussions or make all decisions.

Enjoy your day!


(1) The Aspen Institute (2009) ‘Overcoming Short-termism: A Call for a More Responsible Approach to Investment and Business Management.’ September 9, 2009.

(2) Larcker and Tayan, Corporate Governance Matters: A Closer Look at Organizational Choices and Their Consequences, (1st edition. Pearson Prentice Hall, 2011).) Pearson Education, Inc., Upper Saddle River, New Jersey.


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