Dwight Eisenhower: “Plans are nothing; Planning is everything.”
What is planning? Is it important? Benjamin Franklin said, “If we fail to plan, we plan to fail.”
Planning is a framework that provides direction where we want to be and helps us identify goals clearly, what we need to do to reach where we want to go.
Planning is the function of management that involves defining the objectives/goals and determining the course of action for achieving these objectives. In most companies, different units start doing their budget planning mid-year, completed by the 4th quarter, vetted by the Board and ready for implementation at the beginning of the next year.
What is the usual process of planning?
First, the objectives of the company must be established…the goals for the year, the end result of what management want to achieve given the Board’s direction. Usually the Strengths, Weaknesses, Opportunities and Threats (SWOT) and company’s vision are discussed here. Some companies go beyond a year and set long term goals such as the next three years even five years. Although now, given all the uncertainties and the black swans (unexpected events), it is really difficult to plan ahead.
Then, the External factors. Basic assumptions are discussed and agreed upon as these affect the company’s operations. What are the Political situation, Economic, Sociological, Technological, Legal and Environmental factors to consider in the analysis or “PESTLE”. Usually, an external economist is invited to provide the economic outlook if there is none in-house. Again “black swans” can all catch us by surprise.
Each department within the company lists their own action plans, with support from other units to achieve the company objectives. Then evaluate among various alternative courses of action the best for the company, always in coordination with the support groups that will help with the implementation. Topics should touch on Customer and Target Market, Human Resource, Operations and Technology, and Financial, among others. The value in planning is the understanding and appreciation created in various units of the company, how their own department can contribute to achieve the company objectives. In a way, this reduces overlapping, wasteful activities and may even promote creativity and innovation.
Once the action plans are completed and consolidated at the company level, plan is reviewed, vetted and agreed upon up to the Board level. Then the plan will have to be communicated at all levels of the organization so everyone moves in the same direction and hopefully in the same beat.
At the beginning of the year, the approved plan is to be implemented. Monitoring should be done. How does actuals compare vs the plan? What is the cause and explanation of the variance, if any. Analysis and Reporting must be done regularly (on a monthly / quarterly level) depending on what the Board requires. Adjustments in actions may need to be made to catch up with the plan.
When Alice Cordero, President of Tulay Sa Pagunlad Inc./ Mutual Benefit Association Inc. (TSPI MBAI, the microinsurance arm of TSPI focus on alleviating poverty) presented to the Board led by Chair Luz Planas the 2024 budget and plan, TSPI Chairman Emeritus David Bussau (one of Australia’s most creative minds, Social Entrepreneur awardee by Ernst & Young and Founder of Maranatha Trust) softly commented “God must be laughing at your plan”. We were speechless. Having been the Country Financial Controller of Citibank in my past life, planning was part of my yearly life with the next year’s budget almost always an increase of 15 percent. Otherwise, you can hear remarks: you’re running but, on a treadmill – meaning “staying where you are”.
Actually, David didn’t want to limit God on what He can and wants to do. Planning is a continuous process. It is about the future and the future is uncertain. David meant that the process is what is important in planning. It is not just getting everyone working together but the plan is God-led, and that God is part of the process.
We should include God in our life. How much more in planning for the future which is unknown. But we know who holds our future. In everything we do, let us do our best and leave to God the rest.
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Ms. Tarriela was former PNB Chairman and now serves as Board Advisor. A former Undersecretary of Finance, she is lead independent director of Nickel Asia Corp., director of LTG Inc. and FINEX. A gardener and an environmentalist, she founded Flor’s Garden in Antipolo, now an events destination.