Effective Planning: Interest or Commitment

The goal of many businesses is to be effective in their business planning which may range from new products to market forecasts to forecasting supply chain demand to revenue forecast, etc.  In many cases companies invest significant time and resources to their “planning” focus only to fall short of their objectives.  Why?

The answer lies in the degree to which other business functions are integrated into the overall “plan” so that cross organizational support exists to maximize the commitment and energy of the resources of the business toward the goals and objectives of each business function and as a result the plan for the business as a whole.

If the “planning” emphasis is only applied to critical functions – engineering or sales – then supporting business functions  – operations, quality, product marketing – may be excluded or have only a secondary role in the process.  Where does this leave the plan?  A plan will exist but will it be executable and serve the best interests of the company if everyone is not onboard and committed to what has to happen?  In addition, does the plan contain objectives that are unrealistic due to excluding valuable input from resources within the company that could have contributed to making the goal realistic?

Example I: 

A high technology company embarks on a new product and revenue plan that will require significant engineering resources and focus for 2 to 3 years.  In establishing the goals for completion of the plan the planning group overlooked the current commitments of engineering resources to respond to this new product development direction.   Engineering resources were over committed to sustaining the current and aging product lines that were still producing current period revenue.  This over commitment was due in part to earlier product development projects that did not incorporate sufficient design reviews and load tests to make sure that the design was not vulnerable to small variances in component lot quality.

The result here is that the historical habit to exclude or overlook input from supporting groups (i.e. component engineering to do load tests) created a product liability that consumed future engineering resources and limited the ability of the organization to develop new products and refresh their product offering.

Example II:

An aerospace company had an elaborate product development process.  Upon closer review I discovered that supporting organizations were not invited or required to attend early design reviews.  The product development team expected the support groups to discover what was going on and to get involved if they saw a problem.  To further complicate the situation I asked what happened if someone did not sign off on a design review because they were uncomfortable with a design issue.  The answer was basically nothing.  The lack of an approving department or individual did not come to the attention of management or affect the course of the project.

The result in this case was that valuable input that could have been applied in early design discussions was excluded or added late in a design stage that presented significant cost and time impacts to the project.  Consequently good input was included in the design process at the best point favorable to the cost, schedule and integrity of the new design.  The absence of management oversight when a design review failed to get unanimous approval resulted in the discovery of critical design flaws or performance issues late in the project that had to be resolved in a crisis manner that often affected on time delivery and the design meeting performance specifications.

While you may not design high technology projects the point of these two examples is that by not involving the right resources in the plan when they were most likely to have a positive influence on the outcome of the project the impact on the business was substantial affecting cost, quality, reputation and customer relationship.

What should you do?

Make sure that you have an integrated planning process that includes cross-functional representatives that have an equal voice in the process.  Look for regular reviews in the planning process and monitor the summaries of these reviews to understand how exceptions are being handled and what “course” corrections are being recommended and adopted.

A healthy planning process is one that is well understood by all that are involved, where they have real time input, and where issues are dealt with on a timely basis resulting in adjusting the course of the plan when necessary.  Some can view committing to a planning process as onerous. In the beginning there will be frustrations and disappointments but as those involved stay the course the benefits are substantial.  Employee morale improves.  People learn to focus on applying input early rather than later there by moving the traditional bubble and crisis associated with making the plan work from the commit date back to the front end of the process.  This improves schedule performance, reduces cost and provides a more predictable level of service to offer your customers.

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