Are you a business leader who sometimes feels like you’re just flying by the seat of your pants? Do you wish you could take a step back and map out your plans for the future? If so, you’re in luck – planning is one of the best practices you can do for your business! In this blog post, we’ll explore some of the advantages of planning and show you why it’s such an important tool for success.
Planning Facilitates Effective Control
Planning facilitates effective control. Effective control is a function of comparing actual results with planned goals and taking corrective action in response.
Without a concrete plan, there are no organizational objectives or goals against which to measure results.
Planning ensures that you know exactly what needs to be accomplished and what steps are necessary to achieve it.
Planning Helps Improve the Quality of Decisions
Planning helps improve the quality of decisions. Decisions are made based on facts and figures, which are often included in a business plan.
Planning helps reduce errors in decision making. This is especially true when a manager can objectively gather and analyze the facts.
Planning helps reduce the risks of making bad decisions. When managers know all the factors that go into a decision, they can better assess what might go wrong and have plans in place to deal with such mistakes,
Planning Is a Prerequisite for Coordination
Planning is the first step in management and a prerequisite for coordination. It facilitates coordination.
Coordination is the process of bringing together the efforts of all members to achieve a common goal. When plans are done properly, it’s easier for the organization to coordinate its activities.
In planning, the principle of unity of command applies, which states that “each subordinate should receive orders from only one superior.” This gives a manager the ability to more closely supervise his or her subordinates, allowing for coordination.
Planning Lays the Groundwork for Proper Delegation of Authority and Empowerment of Employees
Your most valuable resource is a human resource – your staff. Their health and welfare is at the center of actual performance.
Many workers complain that they don’t have enough freedom. This may be due to the boss’s micromanagement, the employee’s lack of confidence in his or her own abilities, or a combination of both.
However, when managers delegate authority and empower their employees, this complaint is much less likely. Employees are happier and more engaged when they’ve the opportunity to grow and develop.
When a business owner wants to set up a system for proper delegation of authority, it all starts with planning. Without proper planning, everything falls apart.
- Make sure everyone has access to the plan so everyone knows what their responsibilities are.
- Not only should you share the goals with the team, but you should also provide training so that each employee has the skills they need to successfully achieve those goals. Remember that sometimes it’s necessary to work side-by-side with your employees until they learn new skills or can perform certain tasks independently.
- Give your employees constant feedback during this time so they know if they’re on the right track or if there are areas where they need to improve. Do your best to reduce uncertainty.
- Once you’ve set goals and trained your employees to perform new tasks well, it’s important that you, as a supervisor, give them the authority (and responsibility) to successfully complete those tasks.
Planning Helps to Avoid Haste, Waste, and Extravagance
Planning helps avoid haste, waste, and extravagance. Haste often leads to poor decisions, as time pressure forces people to make decisions to meet a deadline.
Haste can also lead to additional costs, as rush jobs are usually more expensive than normal jobs. Haste can also lead to failure if the work is rushed simply because deadlines weren’t set or managed properly.
Planning helps reduce rushing by giving yourself enough time to complete all the tasks required to complete a job, working within a set schedule. This allows you to manage expectations and avoid unnecessary overtime costs that occur when you rush a job at the last minute.
Planning Facilitates the Multiple Use of Resources
Without some form of planning, it’s impossible to find the best alternative in a business. Through planning, a manager can figure out which method, machine, or material will result in a high output.
This allows him or her to make the right decisions for the good of the company.
Planning Helps to Strike a Balance Between the Conflicting Interests of the Various Members of the Organization
For the growth and development of the business, it’s important to strike a balance between the conflicting interests of the different members of the organization.
Proper and effective planning helps to strike a balance between these conflicting interests by providing the right direction to all stakeholders.
Helps maintain the balance between the various conflicting interests by predicting the future and taking the necessary steps in advance to avoid negative situations in the future.
Planned Goals Guide Future Decisions and Actions
Plans serve as a guide for future decisions and actions. They help decide what should be done, how it’ll be done, when it should be done, and with whom.
- Planned goals serve as a guide for future decisions and actions.
- They’re helpful in deciding what should be done in the future.
- The plan tells the manager what he/she should or shouldn’t do.
- It helps in deciding how something should be done because plans provide guidance on how something should be accomplished.
- It helps decide when something should be done because the plan indicates when activities must take place.
- A plan also determines who’s to do something because it assigns responsibilities for accomplishing tasks.
The Formulation of Plans Involves Forecasts
Forecasts are the development of a probable future state. Formulating plans involves forecasting current and future conditions that could affect the plans. In business, forecasting is part of the planning process, and of addressing future uncertainty.
- Because it involves looking ahead to predict what’ll happen in the future, successful managers always use forecasting as a tool to improve decision making and anticipate potential problems before they arise.
- The key word in forecasting is “likely.” A forecast is about what you expect to happen in the future, not about certainties.
- Forecasts can be useful for both long-term planning and short-term decision making because they reflect management’s best estimate of the most likely outcome given the circumstances, but things don’t always turn out as expected.
- Forecasts can be used to estimate or predict sales volume, market share, product demand, new business start-up costs, and other critical information needed by companies seeking to maximize sales performance by preparing for changes in sales trends, taking advantage of market opportunities, or preparing for downturns in business activity so they can make better decisions today that will affect results tomorrow. This kind of financial planning is essential for most businesses.
Plans Help Identify and Eliminate Potential Bottlenecks to Achieving Business Objectives
A bottleneck is a point in a production system (e.g., an assembly line or computer network that reduces the overall flow rate).
For example, you’re trying to get to work and it’s taking longer than you’d like because traffic is flowing slower than usual (e.g., due to road construction). You can spot this problem by watching for signs, such as if there are a lot of cars on the road during rush hour or if there are long lines when you get your groceries at Walmart.
To eliminate bottlenecks, we must first understand what causes them: poor planning!
Effective Planning Ensures Optimal Use of Organizational Resources, Resulting in Higher Productivity
- Planning is one of the most important functions in management.
- Planning is a process.
- A plan is a future course of action developed to achieve predetermined goals.
- Planning involves setting goals, developing strategies to achieve those goals, and determining the steps that must be taken to achieve those goals.
- It’s the basis for any undertaking that a person or an organization undertakes. It involves thinking ahead and designing future courses of action.
Planning is often confused with goal setting, but they differ in both meaning and importance. Goal setting defines exactly what we want to achieve in our lives, while planning helps us decide how to achieve it.
Planning Helps Achieve Both Long-Term and Short-Term Goals
You can achieve long-term business goals, such as increasing market share or building a new manufacturing facility in a lower-cost region of the country, with short-term goals.
For example, to increase your market share, you need to launch new products that are more attractive and user-friendly than your competitors’ products.
To build a new production facility, you need financial planning to raise the necessary capital to invest in the required plant and equipment, and then production planning to implement it.
What Does Good Planning Look Like for an Organization?
We all know the idea of planning, but we may not all agree on what good planning for an organization looks like.
First of all, a good plan is a clear and realistic plan. This means that it’s not vague or unrealistic, but details the goals and actions that need to be taken to achieve them. It also means that the goals are reasonable and achievable – no castles in the air here!
Being clear and realistic also means that you detail the resources you’ll need to implement your plan, while being honest about any obstacles or limitations you may encounter along the way.
- A good plan is viewed as a process, not a product. In other words, it should be improved over time to respond to changing circumstances, not set in stone from day one.
- This flexibility allows you to keep adjusting your plans to meet changing needs without having to start from scratch every time something happens over which you’ve no control (and it’ll).
What Are the Disadvantages of Planning?
While it’s important to consider the benefits of planning, sometimes a different approach may work better. For example, planning is often associated with inflexibility. This is usually a problem when it comes to adapting to new situations.
It may be easy to plan for a specific thing in a specific space, but it’s much harder to adapt when there are many variables at play that can change what needs to be done.
To get around this problem, you could try experimenting with less precise plans and see how they work out. You might find something that works very well in your space, but is still flexible enough to work even if the variables change.
There are also some downsides to planning that might get in the way of your goal of having control over your circumstances and outcomes (i.e. creative freedom). If you’ve a precise plan too early, it can lead to inflexibility later; as an artist or writer, it’s better to let things run their course without being too narrow-minded about them.
Another disadvantage is that people who use the planning method become dogmatic and want to fix everything in advance. This kind of rigidity can lead to problems later when conditions change and the plan no longer applies properly (i.e., the most important points become incoherent).
The Limitations of Planning
Planning can be time consuming. Planning isn’t necessarily easy, and it can take a long time to get it right. This is especially true for strategic plans, which may require the coordination of multiple people or departments within the organization.
- Planning can be expensive. Developing complex planning documents, such as business plans, can be costly in terms of money and resources, and may require hiring expert consultants or staff with specialized skills.
- Planning can be inflexible and unresponsive to changing circumstances. Plans are static; they don’t change in response to changing circumstances. For this reason, contingency planning is required (see below). If plans don’t change with the environment, they may become obsolete or irrelevant and thus ineffective.
- Planning doesn’t always work. A comprehensive plan is no guarantee that things will go exactly as planned when activities begin in the field (remember Murphy’s Law: anything that can go wrong will go wrong). It would be foolish to expect this!
- Sometimes planning fails because of forces beyond a person’s control – a plan may fail because an event occurs that no one could’ve foreseen (e.g., a fire that destroys important documents the day before the deadline).
Some people argue that “planning” itself puts too much emphasis on foresight, which simply cannot predict some events – especially when they occur suddenly and unpredictably!
Goal Shift Structure Follows Strategy: When organizations rely heavily on planning, organizational goals can fall victim to “goal shifting,” in which original goals are lost because too much attention is paid to organizational structures and methods for achieving those goals, rather than achieving them directly.
Internal Limitations of Planning in an Organization
Some of the internal limitations of planning are:
- Insufficient information: The information available to a planner may be insufficient, inaccurate, or ambiguous.
- Insufficient time: planning must be done in a short period of time because the environment is changing faster than expected. Thus, if planning isn’t done in a timely manner, it becomes useless and irrelevant.
- Insufficient skills: The planner should have sufficient knowledge and skills to perform his task, otherwise he’ll face difficulties in planning the activities of the organization.
- Inadequate resources: planners may not have enough resources to do their job properly, which ultimately has a negative impact on their performance and efficiency on the job.
- Inability to predict the future: As we know, the external environment of an organization changes over time, so no one can predict what difficulties may stand in the way of an organization’s growth in the near future simply because the external environment changes.
External Constraints on Planning
Advance planning has external limitations, which include the following:
- Planning cannot guarantee success. Plans are only as good as the information on which they’re based and how accurately that information predicts what’ll happen in the future. If a plan is based on faulty data or if unforeseen circumstances arise after the plan is created, even the best plan cannot guarantee success.
- Planning cannot guarantee that the future will turn out as expected. In many cases, organizations must operate without knowing what their environment will look like a year from now or five years from now. Having a vision of where you want to go doesn’t mean you know exactly how to get there – the path may take unexpected turns and lead to different destinations than originally planned or desired.
- Plans can be rendered useless by an unexpected future event beyond your control (e.g., natural disasters, economic collapses).
Planning for Crises
Strategic planning processes are very valuable for many reasons, one of which is the ability to plan for crises.
Crisis planning is about anticipating and preventing the occurrence of a crisis. In addition, crisis planning is about anticipating the potential impacts of a crisis with contingency plans, and devising strategies to deal with them effectively.
This type of planning is important because it allows you to prepare in advance for when a crisis occurs and makes it more likely that your organization will be able to successfully manage a crisis situation when it does occur. You will have a contingency plan that at the very least can serve as a first map to get you going.
A crisis can also involve an unexpected departure – therefore, it’s worth doing some succession planning.
Planning Encourages Creativity and Innovation
In general, a well-organized planning process encourages creativity and innovative thinking.
When you plan effectively, the various team members can be encouraged to think creatively about how to get the work done that’s necessary to achieve the organization’s goals.
They can also be encouraged to be innovative in their approach to the project, to get it done faster or better than expected, and even to find solutions to problems that may arise later in the project life cycle.
Planning Improves Motivation in the Team
Planning improves motivation in the team. It creates an environment where management and employees can discuss the company’s goals more openly.
The plan helps reduce misunderstandings between people working on the same project. The plans serve as guidelines that help reduce errors and achieve savings.
It helps improve productivity, which is defined by the quality, quantity and timeliness of products or services produced by a company.
Planning Helps the Organization to Become More Competitive
Planning helps the company to respond to the challenges of the market. In any business, there are great opportunities and potential threats. A strategic plan helps the company identify both opportunities and threats, helping it make good decisions about where and how to invest resources.
Opportunities can include:
- New markets for existing products
- New products for existing markets
- The development of new technologies and how they can be used.
Threats can be:
- Changes in consumer tastes, fashions, or other variables that affect demand behavior (in other words, what people want)
- Changes in legislation or other changes beyond the control of companies (e.g., adverse weather conditions or increased competition).
The idea is that planning is a process that helps organizations understand the environment in which they operate so they can take advantage of opportunities (to make money) and avoid threats (that could cost them money). This often involves a degree of organizational change.