Who do we need to involve in our planning efforts?
The simple answer to this question is that you need to involve all of your internal and external stakeholders in your annual and longer term planning efforts. Internal stakeholders include people from all levels in the organization, from the front lines to the board room. External stakeholders can include your suppliers, customers, board members, and the community itself. Using cross-functional, or 'diagonal slice' teams, is the best way to involve a variety of stakeholders. Internet and intranet systems however are quickly moving into the forefront as a means for involving a variety of stakeholders on a regular basis.
Do we really need to involve everyone?
At a minimum, I believe that all key stakeholder groups should be represented on your planning team. I also feel that all stakeholders should have the opportunity to somehow participate in your planning efforts, even though they may not be a member of the planning team itself. For example, two key ways you can involve stakeholders are (1) reviewing planning document drafts as they are developed and (2) suggesting ways that further improvement could realized (ideas). If this is done in a focused and structured manner, it can work very well - I have seen it happen.
What is the key component of an effective planning process?
The project database serves as the key driver in an effective planning process. If this tool is used on an ongoing basis and if all stakeholders have access to its contents (including the ability to add to it), the annual planning process will go much more smoothly. Keep in mind that any organization has a limit as to how many projects it can work on at any given time. Using a project database keeps everyone informed about what is currently being worked on, what is scheduled for future work, and what has been suggested to-date but not scheduled. This database also shows who is responsible for each project, the priority that has been assigned to it, and the the project's status. Unfortunately, many organizations have several project databases in use at any given time and they fail to share these with other departments or a variety of stakeholder groups. Why raise the expectation that something will be done about a problem when in reality it is not feasible to address this concern right now relative to other needs? Why keep people in the dark about what is both planned and being worked on, in turn creating the perception that the organization does not care about certain problems or that they are blind to them?
What are the key steps in a planning effort?
Six key steps are used to develop an annual plan. First, you need to review your organization's mission and values statements for possible revision or shifts that are needed. Second, you need to collect possible improvement ideas. Third, you need to conduct an internal and external environmental scan, using data whenever possible to help you identify strengths, weaknesses, opportunities, and threats for your organization. The fourth step involves prioritizing and scheduling your list of possible improvement options so that you know where you need to invest your limited resources (time and money) in the coming year. After doing that, you can complete the fifth step, which involves the creation of a capital budget for the coming year. Finally, you need to determine the impact that these improvements will have on your key performance measures, and set performance goals. After completing these five steps, usually over the course of two to three months, you can compile and issue the final planning document. Budgets and action plans can then be developed to support the larger plan.
What does a great annual planning document consist of?
Great annual plans include descriptions of the organization's mission and key objectives, its accomplishments over the past year in each key performance area (including forecasts), performance trend graphs for each key measure, a list of assumptions that the plan was based on, descriptions for the key projects that are planned, a capital budget summary, a cost reduction plan summary, a project responsibility matrix, the annual training plan, and a matrix of the performance goals for each key measure. Some organizations also include a list of those ideas that were dropped or put on hold for the coming year and action plans for each group that are intended to support the organization's key projects. This document is made available to all stakeholders when it is finished, and ideally, a representative group of stakeholders is involved with reviewing drafts of the plan as it is assembled.
What can cause planning efforts to fail?
Planning efforts are most often compromised by (1) failing to involve the right mix, or enough, stakeholders in the planning effort, (2) failing to keep your stakeholders educated about how the organization is performing and what factors affect its performance the most, and/or (3) failing to properly match the improvements you desire with the resource limitations that you have. Basing your final project selections more on opinion than data will also compromise your final product, just as failing to communicate the final plan to your stakeholders will. By using a systematic approach to planning however that is integrated with other organizational systems, you can avoid these pitfalls.
Where do we go next?
You can learn more about my thoughts on converting ideas into lasting improvements by clicking on the links provided below, thinking about what you see, and experimenting with the tools. As always, let me know if you would like me to work with you further in this area or others. Keep improving!
Would You Like to Learn More About Great Systems!?
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“The only thing I know is that I do not know it all.” -- Socrates