Why is it that we, as humans, essentially plan every minute of every day, yet find it difficult to do similarly in our business? We are planning, whether we realize it or not, while walking down the street. We are looking ahead, anticipating other peoples' movements and planning our actions, albeit subliminally. When we are driving, we constantly look ahead watching the cars around us and the road ahead. Not only are we constantly planning but we do so to adapt to our environment and make course corrections to either avoid a problem or take advantage of changing circumstances. In other words, planning never stops.
Just like in our personal lives, we do the same in our businesses. The difference being in our personal lives we only communicate with ourselves, while in business we have to include others. Not just planning, but planning with others: getting feedback and opinion from others, and making adaptations with others. That’s why it has to be written down. We must communicate or we could all be going in different directions.
In our personal lives, our plans involve more than just a financial result. Most often in our business life, the financial outcome is the most important and sometimes the only plan we have. Most often our business plan takes the form of an annual budget. The more successful businesses build a Strategic Plan that is far more comprehensive with a long-term perspective. In the budget we focus on the revenue numbers and the expenses required. In the Strategic Plan, the business purpose, vision of itself when successful, and the core values are the basic structure that drives everything. While financial results are still paramount, the way the business gets there is the plan. Your plan requires constant assessment and adjustment. It may work well for a while on its own momentum, but there is always a shifting environment and resources to deal with.
According to the Harvard Business School approach, there are four major elements to be balanced. They are people and culture, the customer or market, the internal capabilities and the financial requirements. These have to be balanced, thus the term "Balanced Scorecard." Our attention has to be on all four. If we put more emphasis on any one or two over the others, the implication is we will be out of balance. We have to watch all of them. So planning, monitoring and adapting are continuous. It is this focus that results in better levels of performance. Just because your budget is done and maybe you did a strategic plan that exists in a book on the top self, you are just at the end of the beginning. Execution is the point of the exercise and it requires constant vigilance and adapting (re-planning).
The planning never stops.
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