There is a general view that the greater the
level of planning the greater could be the success of execution. Experts feel
that Indian executives and firms plan less and aspire more as well as evaluate
less and execute more, causing firms to be burdened with infeasible targets and
unviable plans. Experts also propose Japan as the ultimate model of planning-controlled-execution
and USA as a balanced model of planning-optimised-execution. It is a moot point whether adopting of either
Japanese or American model of business management would lead India to achieve
better execution. That said, there are several perspectives of planning and
execution that have emerged from global and Indian practice that are worthy of
notice. Prior to moving forward on the topic, it is useful to consider what
planning entails.
Planning typically requires data on the past,
expectations on future, awareness of firm strengths and weaknesses as well as
environmental opportunities and risks, analytical framework and a few other
related inputs. Planning influences, and is influenced by, the length of the
value chain. By nature, planning has deterministic ends but iterative
processes. It is difficult to separate planning and execution. By and large,
planning is considered a staff function while execution a line function. While
planning is considered the starting point and governing platform of execution,
planning is also considered to be a seasonal activity to be carried out by
lean-staff at best. The question then is whether planning should remain a seasonal
or continuous exercise, and in either case with narrow or broad participation.
This post discusses some relevant issues and proposes a few contrarian thoughts
as well.
Planning is disruptive
One of the paradoxical aspects of planning is
that it is as much an enabler as it is an inhibitor. Without planning, goals
cannot be established, strategies cannot be developed and execution cannot be effected.
However, based on the inputs that are factored in, planning can also be
inhibitory in nature. Given the current scenario of lead times in
infrastructure and long gestation of projects, planning is essential to
mitigate risks. At the same time, factoring in of the current delayed
implementation of infrastructure projects can inhibit the very launch of a
project. Planning tends to regulate as well as disrupt one’s thinking. If one
asks a professional planner for advice on a new business venture, one would be
inundated with more questions than answers. The questions can start from
multiple business definitions to myriad aspirations that could be set. Executives
must learn to use planning as a controlled accelerator rather than as a
disruptive decelerator.
Planning is not aspiration
Many confuse aspiration to be a goal or even
a plan. One aspiration for a firm, for example, could be that the firm would
launch all products successful in one market in all the balance global markets
as well. This, however, is no more than an inspirational thought that could
galvanize the organization into a new futuristic path. Believing in the
aspiration as a goal could, however, lead the firm to a series of
non-prioritized helter-skelter initiatives across the globe which the
organization could fail to support. Structured prioritization coupled with a
continuous reality check helps tame the aspirations to feasible and viable
plans. The founders and CEOs have a major role to play in this moderation as
they tend to be the primary customers for unbridled aspirations, and many times
themselves the generators of mammoth aspirations, in organizations. Planning
would be optimal when planners are blessed with creativity to dream but also
accountability to aspirations.
Analysis is debilitating
Planning tends to be full of data points. For
someone planning investments, the data points could include returns over the
last several years of various asset classes, performance of individual funds,
expected economic growth of domestic and foreign countries, likely expenditure
profile of the investor, likely and emergency healthcare requirements and so
on. Neither can all the data be captured nor can the analysis be mounted, let
alone perfected. Notwithstanding the rise of big data analytics, it becomes
impossible to factor in all relevant data points in a manner that they can
complement human judgement which is so essential. Typically, deployment of
larger than required planning formats tend to be highly debilitating to
purposeful forward thinking.
Planning is visualization
Nothing can be farther from truth than to
imagine that planning is best made only on paper or computer. In fact, the best
plans of consummate planners are first visualized, and then only perfected on
paper or computer. A consummate planner (all professional planners not being
consummate planners!) has deep knowledge of the subject, and understands what
it takes to achieve a goal. As a result of this deeply embedded knowledge, the
consummate planner tends to get all the components of a plan in a visual
framework in his mind. A consummate planner who is charged with the mission of
producing a million smart phones as a green field project can visualize the site,
factory and organization infrastructure as well as R&D, manufacturing and
R&D value chain along with financial needs. This visualization leads to a
healthy debate between the planner and the promoter on what is doable and not
doable, and leads to a more purposeful and more relevant planning.
Planning is iterative
The most challenging part of planning is that
a plan will always be a sum of moving parts. There could be changes even before
the ink on the paper dries, euphemistically speaking. The answer to this challenge
does not lie in either abdicating the planning process or getting overwhelmed
by continuous analysis. The answer lies in being open to changes all the time. The
best planning template would comprise a solid and stable core but flexible and
adaptive peripherals. As an example, planned development of new expressway
should always be firm on the alignment and lane sizing but should be flexible
on development of social and industrial infrastructure alongside the
expressway. A demand and revenue maximizing model for the peripherals would de-risk
the core and keep the project on track. Reverting to the smart phone project,
one could make a choice as to which of the three critical value drivers, viz.,
design, manufacturing and marketing (but not all the three) would be the solid
core and which would be considered for total outsourcing, joint development or
leveraged development.
Planning is organizing
Planning and execution may be two sides of a
coin but the coin itself is organizing. More than execution, planning is
organizing. A plan without elements that cannot be organized cannot be a plan
at all. Organizing here refers not only to factor inputs and resources but also
to people. It would, for example, be impractical to plan a one lakh employee coding
unit in USA when neither local STEM candidate pool nor HB1 visa limits can
support the formation of such an organization. It may similarly be audacious to
plan an Intel-competing semi-conductor plant in India without organizational
clarity on how the technology and material value chain can be built and how
people skills can be marshaled. Another rhetorical question, for example,
could be whether Make in India would be successful without Skill India.
Planning for Make in India must therefore be led by planning and executing for
Skill India. A good planner would have a complete understanding not only the
business value chain but also the organizational elements.
Planning is addictive
If execution is challenging and instantly
calibrated by results, planning is addictive and could lead to perpetual
procrastination. Professional planners tend to get cocooned with their own
plans, and move from one plan to another rather than follow a plan-execute-plan
cycle. It is not uncommon for planners who see their plans tripping with poor
results plan for higher results rather than identify and resort to corrective
actions. This approach is complemented by an executive leadership which hates
to be identified with failures. As a result of this tricky combination of compulsive
planners and escapist executives, planning tends to become an end in itself in
certain firms. It is easy to separate firms which plan only for planning sake
from firms which plan with an execution focus. The former survive more by
make-believe (though not for far too long) while the latter prosper by value
creation.
Timely paradigm
Planning is an essential foundation for
building a strong and viable superstructure. However, planners must not lose
sight of the ultimate goal of building lasting value on ground as opposed to
the easy temptation of scaling up value on paper. To be able to do that, the
tricky pitfalls of planning need to be avoided by resorting to a smart platform
of planning interlaced with execution. The paradigm works with a leadership
that integrates planning and execution, and looks at planning and execution on
an end-to-end basis. The paradigm involves drawing up plans with a long term
horizon, ensuring a solid core and flexible externalities. The leadership must
watch not only how others are executing but also how others are planning. Korea
succeeds not merely because of their speed in execution but more essentially
because of their productivity in planning. An integrated paradigm of timely planning
and speedy execution tends to be industry leading, and globally competitive.
Posted by Dr CB Rao on April 12, 2016
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