PLANNING IS THE ULTIMATE WEAPON

BY PAUL WINTERS

Is it time to do some strategic planning? Are you struggling with competitive pressures, a changing marketplace, rising costs, customer demands for lower prices, insufficient cash flows? Perhaps now is the time to address how you evaluate the future and how you can meet it with confidence.

In his book Creating the Corporate Future, Russell L. Ackoff suggests that companies can choose among four alternative type of planning:

A. Reactive Planning

B. Inactive Planning

C. Preactive Planning

D. Interactive Planning

A. Reactive Planning is more of an operational method than a planning technique. Generally, little if any planning is done, until a problem or a threat is perceived. At that point, resources are mustered to identify the cause of the problem, and to design a method to eliminate it. A fallacy in this planning approach is the belief that by eliminating threats or problems that you don't want, you will automatically get the rewards that you do want. Another problem is that this approach is often used independently in different parts of the organization with little attempt to integrate the various plans or consider the impact of the action on the organization as a whole. If the organization is fortunate enough to grow, you work harder each year as the threats and problems seem to accelerate at a geometric rate.

B. Inactive Planning, as the name implies, is an attempt to maintain the status quo at all cost. Inactive planners in actuality are quite busy people. It takes a lot of energy to keep things from happening. Procedural manuals and bureaucracy are indispensable tools for the inactive planner. The method of action is more important than the result. Inactive planning can be tolerated in organizations which do not depend on performance for their survival.

C. Preactive Planning is based on using the present to look at the future. Preactive planning is typified by organizations using forecasting, regression analysis, etc. as a means of preparing the annual budget and a five year forecast. The implicit assumption is that the organization's future direction will be generally the same as the present. Preactive planners analyze the forecasts for threats and opportunities and then prepare strategies to deal with them. A problem encountered with this type of planning is the confidence level that can be placed on the forecast.

D. Interactive Planning is a visionary process. The leaders of organizations that use interactive planning choose what the future of the company will be and then set about designing ways to bring it about. The starting point for the plan is established five to ten years in the future. Obstacles of the present are not allowed to inhibit the visions of the future. Once the future is chosen, the planning objective for the current year is to determine those actions which must be taken now if the organization is to reach that future.

Where do you fit in this planning spectrum? Puzzled and not satisfied about where your organization is going and how to get there from here? A fundamental shift in your planning approach can make dramatic changes in performance and direction.