Many different methods for planning exist, each with their own benefits and drawbacks in different situations. No one technique will be suitable for every situation, in fact, a number of these techniques will usually be required for a successful overall strategy. Different methods are used to cover different timeframes, areas of the business and utilise different skill-sets.
Strategic planning aims to ensure employees and other stakeholders are all working towards a common goal and their energy, focus and resources are all aligned towards this. Agreements are made about the direction the organisation wants to move in and how every contributor can ensure this happens. As well as the overall goal and how they are going to get there, a strategic plan also often lays out how the success of the strategy will finally be measured.
Unlike strategic planning, this type of planning is far more focused on day-to-day activities. Individual, team or project activities are organised and set out in a timetable. This helps to focus attention on the task at hand, rather than focusing on the bigger picture. This increases levels of motivation and efficiency, as well as providing a useful tool for monitoring and evaluation after the task has been completed. Specific details are planned for to the level of who will be where, when and the exact amount of resources they will require.
This type of planning builds on the strategic plan already set out, by breaking the tasks down into short-term actions and plans. It is usually drawn up by lower-level managers as they have better knowledge of their departments and day-to-day running of the business. The extra level of detail in a tactical plan increases efficiency and helps individuals and teams to know exactly what is required of them.
This type of planning aligns different functions of the business, for example HR or marketing, with the overall goals and objectives of an organisation. This includes planning levels of resources, processes, where people are needed and department budgets. This is important for each individual department but also overall integration within the business, ensuring every area of a strategy is covered and no two departments are working on the same project. Simplicity and clarity are key as the plan must be easily understood and distributed across the organisation.
Assumption-based Planning (ABP)
All plans make assumptions about the future and identifying these assumptions are crucial to any plan. In the scenario of any assumption not occurring the organisation must have plans for how to react to this. Once these assumptions have been identified it is then important to identify which will have the biggest impact on the business if they were to fail. ‘Signposts’ can then be set up to monitor any potential issues and actions can be taken to manage the assumptions made. Finally, hedging actions can be taken to prepare for the instance where assumptions fail. As the business environment becomes more unpredictable and volatile ABP has become more crucial to strategies.
This type of planning involves preparing for the worst case scenario to occur. All strategies have the potential to fail when they are affected by internal or external factors. This may be a supplier suddenly closing down, damage or loss of property or a change in government legislation. These events are often unavoidable, and hence instead of attempting to block them, plans need to be made for the event of them occurring. Firstly, a risk assessment should take place, highlighting the greatest potential risk to the business. Once risks have been highlighted plans can be made for if they occur, laying out the actions required, the triggers to the events, timeframes for action and budgeting. Contingency plans are often unused by the completion of the strategy, and hence ignored by many companies, but to initiate a strategy without one poses a serious risk to any business. Although they are rarely called upon, when they are they often save companies vast amounts of money.