The Process of Planning Simplified
Planning is deciding what needs to be done and how to do it in advance. It is a key responsibility of managers. Before starting any task, a manager must figure out how to approach it. The planning process involves thinking creatively and finding solutions. The first step is to set clear goals. Planning is important for managers at all levels and involves making choices, as it requires selecting the best option from different alternatives.
Planning Process in Management
Planning is not a single concept but involves several steps. Provided below is a simple explanation of the planning process for better understanding.
1. Setting Objectives
This is the first step in the planning process, where the organisation defines what it aims to achieve. Planning starts by setting clear objectives. These objectives represent the final goals the management wants to accomplish through its activities. The objectives should be specific and measurable. The overall goals are set for the entire organisation, and then each department creates its own goals that align with the organisation's main objectives.
Example: Imagine you want to run a successful lemonade stand. Your main objective is to make a profit of $50 in a month. To achieve this, you set smaller objectives like:
Making lemonade every day (for the whole month).
Selling at least 10 cups of lemonade per day.
Promoting the stand on social media to get more customers.
Each of these smaller goals supports your main goal of earning $50.
2. Developing Planning Premises
Planning is all about looking ahead, and certain events are expected to impact the plans. These events, often outside of the organisation's control, can negatively affect the plans if not considered. It's important to understand and assess these events for successful planning. These events or conditions, which help shape the plan, are called planning premises.
Example: Imagine a small business owner planning to open a coffee shop. One of the assumptions (planning premise) they make is that the weather will be good, so they plan to have outdoor seating. However, if an unexpected event like a long rainy season occurs, it could negatively impact their business. To avoid this, they also consider alternatives, like setting up indoor seating or offering delivery services, to ensure the plan still works despite changes in the weather.
3. Identifying Alternative Courses of Action
After setting goals and making assumptions, the next step is to figure out how to act on them. There are usually several ways to reach your objectives. It’s important to identify all possible options and approaches to achieve the goals.
Example: Suppose you're planning a birthday party and the venue you wanted to book is already full. You now have several options:
You could find a different venue.
You could host the party at home.
You could rent a park for an outdoor celebration.
By considering these different choices, you're identifying all the possible ways to still have a great party.
4. Evaluating Alternative Courses of Action
In this step, you look at the pros and cons of each option for the goals you want to achieve. Each option is compared based on factors like cost, risks, and potential benefits, while also considering the resources available and the planning assumptions.
Example: Imagine you're deciding whether to buy a new car. You have three options:
Option 1: Buy a new car with higher upfront costs but better fuel efficiency.
Option 2: Buy a used car with lower upfront costs but higher maintenance.
Option 3: Lease a car with lower monthly payments but no ownership after the lease ends.
To evaluate, you compare the pros and cons of each option:
Option 1 costs more upfront but saves money on fuel in the long run.
Option 2 is cheaper initially but may require more repairs.
Option 3 offers low monthly payments, but you won't own the car at the end.
You then choose the option that best fits your budget, long-term needs, and goals.
5. Selecting the Best Alternative
In this step, you choose the plan that offers the most benefits with the least drawbacks. The manager’s experience and judgment are crucial in picking the best option to move forward with.
Example: Imagine you're deciding between three job offers:
Job 1 has a higher salary but a longer commute.
Job 2 has a lower salary but is closer to home and offers more flexibility.
Job 3 offers a moderate salary and a balanced work-life environment.
After considering the pros and cons of each, you choose Job 2 because it aligns better with your personal life, offers flexibility, and still provides a decent salary. Your decision is based on what’s most important to you, balancing both benefits and challenges.
6. Implementing the Plan
In this step, the focus is on carrying out the plan. It involves putting everything into action. Managers clearly explain the plan to employees to make sure everyone understands their role. This step also includes providing the necessary resources, organising the workforce, and buying any equipment needed to get things done.
Example: You're planning a birthday party. To implement the plan, you:
Tell your friends the party details.
Buy decorations, food, and drinks.
Assign tasks like setting up the venue and organising games.
On the day of the party, you set everything up and ensure the activities happen as planned.
7. Follow-Up Action
Follow-up involves keeping track of the plan’s progress and checking in regularly. It's important to monitor whether the plan is being carried out on time. This includes regularly reviewing results and comparing them with the set goals to make sure everything is on track and objectives are being met.
Example: Imagine you're organising a charity event. After the event starts, you regularly check to make sure everything is going as planned:
You check if the volunteers are performing their tasks on time.
You monitor if the food and supplies are being distributed properly.
You compare the progress with your goals, like fundraising targets.
If any issues arise, you make quick adjustments to ensure the event runs smoothly and achieves its goals.
Financial Planning Process
The financial planning process involves several steps to manage an organisation's finances effectively.
1. Setting Financial Goals – Define clear, measurable goals for the organisation’s financial future, such as increasing profits or reducing debt.
2. Analysing Current Financial Situation – Review the current financial position by assessing income, expenses, assets, and liabilities.
3. Identifying Financial Needs – Determine the amount of money required to achieve the set goals and the resources needed.
4. Creating a Financial Plan – Develop a strategy that outlines how to allocate and use the available financial resources, including budgeting, investments, and savings
5. Implementing the Plan – Put the financial strategy into action by following the set budget and making necessary investments or savings
6. Monitoring and Adjusting – Regularly check the progress of the financial plan, compare actual results with expectations, and make adjustments if needed.
Marketing Planning Process
The marketing planning process involves these simple steps:
Set Marketing Goals – Decide what you want to achieve, like selling more or getting more customers.
Analyse the Market – Look at what’s happening in the market, what your competitors are doing, and what customers need.
Identify Target Audience – Choose the group of people you want to reach with your product or service.
Create a Marketing Plan – Make a plan to reach your target audience, including ads, offers, and prices.
Carry Out the Plan – Start doing the things in your plan, like running ads and talking to customers.
Check and Adjust – Keep track of how things are going and change the plan if needed.
Conclusion and Takeaways
Planning is key to any organisation's success. By following the planning steps, managers can set clear goals, solve problems, and choose the best ways to reach their objectives. Good planning helps organize resources and keeps the team focused on common goals.
Key Takeaways:
Set Clear Goals: Know what you want to achieve.
Think Ahead: Prepare for possible challenges.
Choose the Best Options: Look at different ways to reach your goals.
Put the Plan into Action: Make sure everyone knows their role and has what they need.
Check Progress: Regularly review and adjust the plan as needed.
Effective planning helps organisations grow, adapt, and succeed.
FAQs on Planning Process: 7 Important Steps for Effective Planning
1. What are the 5-step Strategic Planning Process?
1. Setting Goals – Decide on clear goals for the future.
2. Analysing the Current Situation – Look at where you stand, your competitors, and what’s working or not.
3. Creating Plans – Make a plan on how to reach your goals.
4. Carrying Out the Plan – Start working on the plan, using resources and assigning tasks.
5. Checking and Adjusting – Keep track of progress and change the plan if needed.
2. What is Planning Process?
The planning process is about deciding what to do and how to do it. First, you set your goals, then look at where you are and what’s needed to reach them. Next, you consider different ways to achieve your goals and pick the best one. After that, you put the plan into action and keep track of progress, making changes if necessary.
3. Give the Sales Planning Process.
The sales planning process includes:
Set Sales Goals – Decide on clear sales targets.
Analyse the Market – Understand your customers and competition.
Create Sales Strategies – Plan how to reach your sales goals.
Allocate Resources – Assign the necessary people and tools.
Execute the Plan – Start your sales activities.
Track and Adjust – Monitor progress and make changes if needed.
4. How can managers improve the effectiveness of their planning process?
Managers can enhance planning by involving team members, staying flexible, using reliable data, setting clear objectives, and regularly reviewing and adjusting plans as needed.
5. Why is the planning process important?
It helps guide actions, set clear goals, and ensure that resources are used properly to achieve those goals.
6. Who is responsible for the planning process?
Managers and leaders are typically responsible for planning in an organisation, but everyone can be involved.
7. What is the first step in the planning process?
The first step is setting clear and specific goals that need to be achieved.
8. What is involved in analysing the situation in the planning process?
Analysing the situation involves looking at current conditions, strengths, weaknesses, and any factors that may affect the plan.
9. How do you choose the best option in the planning process?
You compare alternatives based on how well they align with your goals, available resources, and potential risks.
10. What happens after implementing the plan?
After implementing the plan, you need to monitor progress and adjust if needed to stay on track.
