FOUNDATIONS OF

PLANNING

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PLANNING
• “Planning is about managing resources and priorities in an organized way”.
• “Management is related to leadership, and it’s related to productivity.”
• Plans commit individuals, departments, organizations, and the resources of each to specific actions for the
future. Effectively designed organizational goals fit into a hierarchy so that the achievement of goals at low
levels permits the attainment of high‐level goals. This process is called a means‐ends chain because low‐
level goals lead to accomplishment of high‐level goals.

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• If companies improve how they plan, managing and leadership will also improve. The following steps can help
businesses plan better.

 Devise a Plan: Write important details down and focus on strengths, what matters, what people are most important to
you and what you can do for them. This will help you communicate your vision to your employees.
 Define Success: How do you see your business in several years? Define long-term goals and be specific. Establish
milestones for certain goals and who will achieve the goals. Look at what drives your business; it may be
presentations, conversions, page views or something else. Then establish a review schedule and re-examine your long-
term goals as necessary.
 Put It in Motion: Track and analyze numbers to help you manage the work behind the numbers. You’ll be better able
to make changes — or to develop new plans — that will help you manage better.

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Types of plans
• There are basically 4 types of plans:
1. Operational plan
2. Strategic plan
3. Tactical plan
4. Contingency plan
• Operational plans lead to the achievement of tactical plans, which in turn lead to the attainment of strategic plans.
• In addition to these three types of plans, managers should also develop a contingency plan in case their original
plans fail.

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1. Operational Planning
• “Operational plans are about how things need to happen,” and “Guidelines of how to accomplish the mission are set.”

• This type of planning typically describes the day-to-day running of the company.

• Operational plans are often described as single use plans or ongoing plans.

• Single use plans are created for events and activities with a single occurrence (such as a single marketing campaign). A
budget is also a single use plan because it predicts sources and amounts of income and how much they are used for a
specific project.

• Ongoing plans include policies for approaching problems, rules for specific regulations and procedures for a step-by-step
process for accomplishing particular objectives. Continuing or ongoing plans are usually made once and retain their value
over a period of years while undergoing periodic revisions and updates. The following are examples of ongoing plans.

• The specific results expected from departments, work groups, and individuals are the operational goals. These goals are
precise and measurable. “Process 150 sales applications each week” or “Publish 20 books this quarter” are examples of
operational goals. 5
1. Operational Planning (Contd.)
• An operational plan is one that a manager uses to accomplish his or her job responsibilities.
Supervisors, team leaders, and facilitators develop operational plans to support tactical plans .

• A policy provides a broad guideline for managers to follow when dealing with important areas of
decision making.

• Policies are general statements that explain how a manager should attempt to handle routine
management responsibilities.

• Typical human resources policies, for example, address such matters as employee hiring, terminations,
performance appraisals, pay increases, and discipline.

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1. Operational Planning (Contd.)
• A procedure is a set of step-by-step directions that explains how activities or
tasks are to be carried out.
• Most organizations have procedures for purchasing supplies and equipment.
• This procedure usually begins with a supervisor completing a purchasing
requisition.
• The requisition is then sent to the next level of management for approval.
• The approved requisition is forwarded to the purchasing department.
• Depending on the amount of the request, the purchasing department may
place an order, or they may need to secure quotations and/or bids for several
vendors before placing the order.
• By defining the steps to be taken and the order in which they are to be done,
procedures provide a standardized way of responding to a repetitive problem.
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1. Operational Planning (Contd.)
 A rule is an explicit statement that tells an employee what he or she can
and cannot do.
 Rules are “do” and “don't” statements put into place to promote the safety
of employees and the uniform treatment and behavior of employees.

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2. Strategic Planning
• “Strategic plans are all about why things need to happen,” / “It’s big picture, long-term thinking. It starts at the
highest level with defining a mission and casting a vision.”

• Strategic planning includes a high-level overview of the entire business. It’s the foundational basis of the
organization and will dictate long-term decisions. The scope of strategic planning can be anywhere from the next
two years to the next 10 years. Important components of a strategic plan are vision, mission and values.

• A strategic plan is an outline of steps designed with the goals of the entire organization as a whole in mind, rather
than with the goals of specific divisions or departments. Strategic planning begins with an organization's mission.
• Strategic plans look ahead over the next 2-5 or even more years to move the organization from where it currently
is to where it wants to be.
• Requiring multilevel involvement, these plans demand cooperation among all levels of management within the
organization.
• Top level management develops the directional objectives for the entire organization, while lower levels of
management develop compatible objectives and plans to achieve them.
• Top management's strategic plan for the entire organization becomes the framework and sets dimensions for the
lower level planning.

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3. Tactical Planning

• “Tactical plans are about what is going to happen”.

• “Basically at the tactical level, there are many focused, specific, and short-term plans, where the actual work is
being done, that support the high-level strategic plans.”

• A tactical plan is concerned with what the lower level units within each division must do, how they must do it,
and who is in charge at each level. Tactics are the means needed to activate a strategy and make it work.
• Tactical plans are concerned with shorter time frames and narrower scopes than are strategic plans. These plans
usually span one year or less because they are considered short term goals. Long term goals, on the other hand,
can take several years or more to accomplish. Normally, it is the middle manager's responsibility to take the
broad strategic plan and identify specific tactical actions.
• Tactical planning supports strategic planning. It includes tactics that the organization plans to use to achieve
what’s outlined in the strategic plan. Often, the scope is less than one year and breaks down the strategic plan into
actionable chunks.

• Tactical planning is different from operational planning in that tactical plans ask specific questions about what
needs to happen to accomplish a strategic goal; operational plans ask how the organization will generally do
something to accomplish the company’s mission. 10
4. Contingency Planning

• Contingency plans are made when something unexpected happens or when something needs
to be changed. Business experts sometimes refer to these plans as a special type of planning.

• Contingency planning can be helpful in circumstances that call for a change.

• Although managers should anticipate changes when engaged in any of the primary types of
planning, contingency planning is essential in moments when changes can’t be foreseen.

• Intelligent and successful management depends upon a constant pursuit of adaptation,

flexibility, and mastery of changing conditions.

• Strong management requires a “keeping all options open” approach at all times — that's
where contingency planning comes in.

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4. Contingency Planning (Contd.)

• Contingency planning involves identifying alternative courses of action that

can be implemented if and when the original plan proves inadequate because of
changing circumstances.
• Keep in mind that events beyond a manager's control may cause even the most
carefully prepared alternative future scenarios to go awry.
• Unexpected problems and events frequently occur. When they do, managers
may need to change their plans.
• Anticipating change during the planning process is best in case things don't go
as expected.
• Management can then develop alternatives to the existing plan and ready them
for use when and if circumstances make these alternatives appropriate.

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• Real-Time Use Cases for Planning Types
• Operational Planning: A retail store schedules employee shifts and
restocks inventory based on sales data for the upcoming week to ensure
smooth day-to-day operations.
• Strategic Planning: A tech company sets a five-year goal to become a
leader in artificial intelligence by investing in R&D, acquiring startups,
and expanding into new markets.
• Tactical Planning: A university's marketing department creates a six-
month campaign plan to increase enrollment for a new course, including
social media ads, webinars, and partnerships with high schools.
• Contingency Planning: A manufacturing company develops a backup
supplier network to address potential supply chain disruptions due to
unforeseen events like strikes or natural disasters.
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 Goals
• Goals are used to help a business grow and achieve its objectives.
• They can be used to foster teamwork and help the business describe what it
wants to accomplish. Setting goals is an important part of any business plan.
• Eg: A startup company sets a goal to increase its customer base by 20%
within the next six months.
• This goal is specific, measurable, achievable, relevant, and time-bound
(SMART), providing clear direction for the company to work towards.

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Goal and Plan
Aspect Goal Plan
A desired result or outcome an individual A detailed roadmap or strategy for achieving a
Definition
or organization aims to achieve. specific goal.
Purpose Answers "What do we want to achieve?" Answers "How will we achieve it?"
Time Frame Often broad and long-term (e.g., "Increase Can be short-term or long-term steps to achieve
revenue by 20% in one year"). the goal (e.g., "Launch a new marketing campaign
within three months").
Includes tasks, resources, deadlines, and
Components Usually concise, measurable, and focused.
processes.
Goal: Expand customer base by 15% in six Plan: Develop a referral program, run social
Example. months media ads, and host promotional events to
attract new customers.

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• Goal setting is a management technique that involves developing an action plan with
targets for a team or individual.
• It is considered both a tool of strategy implementation and performance management.
• As such, it is a critical management function that often follows a methodology, framework
or standard across an organization.
• Example of Goal-Setting:
• A university student sets a goal to score 85% or higher in the upcoming semester.
• To achieve this, they break it down into smaller, actionable steps:
[Link] all lectures and take detailed notes.
[Link] 3 hours daily for study and revisions.
[Link] a study group for difficult subjects.
[Link] mock tests every weekend.
• This structured approach ensures the goal is specific, measurable, and achievable within a
defined timeline.
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The following are a 6 types of goal setting:

• 1. Mission Statements
• A short inspiring statement that captures your goals, principles and values.

• Example of a Mission Statement:

• A local organic food store defines its mission as:
"To provide fresh, locally-sourced organic produce and promote sustainable living while
supporting local farmers and fostering a healthier community."
• This mission statement reflects the store’s purpose, values, and commitment to its
stakeholders.

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• 2. Vision Statement
• A vision statement paints a picture of your future. At the organizational level, it's an all
encompassing goal for the future of the organization.

• As with mission statements, vision statements are usually short and catchy.
• Example of a Vision Statement
• A sustainable fashion startup aims to make a positive impact on the environment and the
fashion industry.
• Vision Statement:
"To revolutionize the fashion industry by creating stylish, eco-friendly clothing that
empowers individuals to make sustainable choices every day."

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3. A Big Hairy Audacious Goal (BHAG) is a long-term, ambitious, and
compelling goal that is meant to inspire and drive an organization or individual
toward achieving extraordinary success.
The term was coined by business authors James Collins and Jerry Porras in
their book Built to Last: Successful Habits of Visionary Companies.
• Key Characteristics of a BHAG:
[Link] and Audacious: It is something that feels almost impossible to achieve,
but it's meant to push boundaries.
[Link]-term Focus: A BHAG typically spans 10 to 30 years, aiming for
transformative impact.
[Link]: It motivates and aligns an organization or individual toward a
common, compelling vision.
[Link] and Tangible: Despite being audacious, it should be something that
can be concretely understood and worked towards.
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• Examples of BHAGs:
[Link]:
"To enable humans to become a multiplanetary species by establishing a
sustainable colony on Mars."
This BHAG reflects SpaceX's vision to make space travel more accessible and
sustainable, aiming to reshape humanity’s future.
[Link]:
"To accelerate the world's transition to sustainable energy."
Tesla’s BHAG is to revolutionize the automotive industry and create a future
where sustainable energy solutions dominate, significantly impacting climate
change.
[Link]:
"A computer on every desk and in every home."
Microsoft's BHAG, set by Bill Gates, was achieved in the 1990s and illustrates
how an audacious vision can drive an entire industry forward.
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• 4. SMART is an acronym used for setting clear and achievable goals. It stands for:
S - Specific
• The goal should be clear and well-defined, answering the who, what, where, when, and why questions.
• Example: "I want to increase sales in the product line by 10% over the next quarter."
M - Measurable
• The goal must have criteria to track progress and determine when it's achieved.
• Example: "Increase website traffic by 20% within 3 months."
A - Achievable
• The goal should be realistic and attainable, considering available resources and constraints. It should stretch
capabilities but still be possible.
• Example: "Complete a professional certification in digital marketing within 6 months, given time for study and
course completion."
R - Relevant
• The goal must align with broader objectives and be meaningful to you or the organization. It should matter and
have a clear purpose.
• Example: "Attend at least two networking events per month to grow my business's clientele and align with my
career development."
T - Time-bound
• The goal should have a deadline or timeframe, creating urgency and focus. 21
• Example: "Finish reading 12 business books by the end of the year."
• 4. Management by Objectives (MBO)
• Management by Objectives (MBO) is a management technique in which
managers and employees collaboratively set clear, measurable goals,
aligning individual objectives with organizational goals.
• The primary purpose of MBO is to improve organizational performance
by clearly defining and agreeing on objectives, monitoring progress, and
evaluating outcomes.

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• Process of MBO:
1. Setting Organizational Objectives:
The management team defines the overall goals and strategies for the organization, which provides the
foundation for individual objectives.
2. Setting Individual Goals:
Managers and employees jointly determine personal goals that are in alignment with the organization's
objectives. These goals are tailored to the individual’s role and responsibilities.
3. Action Plans:
Employees develop detailed action plans that outline the steps necessary to achieve their objectives. These plans
may include timelines, resources, and key performance indicators.
4. Performance Monitoring:
Managers regularly track and measure the employee’s progress towards their goals. This includes reviewing
performance data and offering feedback.
5. Performance Appraisal:
At the end of the performance cycle, managers conduct formal appraisals to assess whether the employee has
met their objectives. This evaluation often influences future compensation, promotions, or professional
development.
6. Feedback and Goal Adjustment:
Based on performance appraisals, managers provide feedback and may adjust goals for the next cycle to ensure
continuous development and alignment with organizational priorities.
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• 6. Balanced Scorecard (BSC)
• Definition:
The Balanced Scorecard (BSC) is a strategic planning and management tool
that organizations use to:
[Link] measurable goals that align with their strategy,
[Link] performance, and
[Link] progress towards achieving long-term objectives.
• It was developed by Robert Kaplan and David Norton in the early 1990s to
provide a more balanced view of organizational performance. Unlike
traditional performance measurement systems that focus mainly on financial
metrics, the Balanced Scorecard incorporates four key perspectives to ensure
a well-rounded approach to strategy execution.

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 Perspective Objective Key Metrics

Financial Increase profitability and Revenue Growth, Profit Margin, ROI, Cost
Perspective shareholder value Reduction

Customer Enhance customer satisfaction and Customer Satisfaction, NPS, Market Share,
Perspective loyalty Retention Rate

Cycle Time Reduction, Quality Control,

Internal Process Improve operational efficiency and
Production Efficiency, Supply Chain
Perspective process effectiveness
Optimization

Learning and Employee Training Hours, Employee

Foster employee development and
Growth Engagement, Innovation Index, Leadership
innovation
Perspective Development

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• Real-Time Use Case of the Balanced Scorecard: Starbucks
• Starbucks is a global coffeehouse chain that has successfully implemented
the Balanced Scorecard (BSC) to drive its strategic objectives, measure
performance, and ensure alignment with its long-term goals.
• Starbucks’ Balanced Scorecard provides a comprehensive view of its
strategy and performance across financial and non-financial aspects,
balancing short-term financial goals with long-term customer, process, and
employee development objectives.

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• Strategic goals are goals made to achieve and support the mission and vision of the
company.
• Strategic goals effect and focus on an entire company and not just a department or work
function within the company.
• Strategic goals include goals relating to innovation, market standing, productivity,
efficiency in utilizing company resources in the form of workforce and finances, bottom
line profit, management development and performance, employee conduct and morale
and public and social responsibility.
• Strategic goals are set by organization leaders and apply to everyone within the
organization to work on concurrently and will often benefit both the employee as well as
the organization when goals are completed within the assigned time frame.

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 Aspect Strategic Goal Strategic Plan
Actionable steps and resources to achieve the
Definition Desired outcome or target.
goal.

Focus Focuses on the what (the result). Focuses on the how (the process).

Time Frame Long-term (3-5 years or more). Short- to medium-term (1-3 years).

Specificity Broad and high-level. Detailed and actionable.

Flexible and adaptable as per changing

Flexibility Generally fixed, but can be adjusted.
circumstances.

"Launch new product lines and marketing

Example "Increase market share by 10% in 3 years."
campaigns."
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Real time example of strategic goal
• Microsoft set a strategic goal to become the leader in cloud computing and
transition from a software-focused company to a cloud-first one.
• To achieve this, Microsoft invested heavily in Azure, acquired cloud-focused
companies like LinkedIn and GitHub, and formed partnerships with firms like
SAP and Adobe.
• This shift enabled Microsoft to become the second-largest cloud platform
globally, significantly contributing to its revenue growth and positioning the
company as a leader in the cloud services market.

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• Operational management goals are goals set to impact the running of an organization, where management skills,
technology and resources can be utilized in the most efficient ways possible.
• Operational goals are determined at the lower management level within an organization and are specific to certain
employees or a department in the company versus the entire company.
• Operational goals focus on individual employee responsibilities and performance and the position's overall impact within
the company.
• Example:
• Starbucks set an operational goal to reduce waste by 10% within six months through better inventory
management.
• The company implemented data analytics tools to forecast inventory needs, conducted regular store audits, and
coordinated closely with suppliers to streamline deliveries.
• As a result, Starbucks successfully reduced waste, improved inventory accuracy, and optimized stock levels,
leading to cost savings, fewer shortages, and higher customer satisfaction across its global stores.

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• Tactical management goals relate to the strategic goals set by the company.
• Tactical goals are broken into divisions or department levels and outline the steps necessary for each
department within the organization to contribute to the larger strategic goals.
• Tactical goals are usually short term goals that contribute to the long-term company goal and can be
analyzed and measured more easily.
• Example:
• Amazon set a tactical goal to increase Prime Day sales by 15% through targeted
promotions, exclusive member deals, and improved logistics.
• They offered exclusive discounts and early access to deals for Prime members, launched
a global advertising campaign, and optimized fulfillment processes for faster delivery.
• This resulted in a significant boost in sales, exceeding expectations and increasing Prime
memberships, demonstrating the effectiveness of their tactical efforts in driving customer
engagement and revenue growth.

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• Super ordinate management goals help to motivate individuals across different
departments and are used to solve conflicts and establish relationships within the
company.
• Superordinate goals allow employees and managers to work together at achieving
strategic goals and recognize each person or department’s part in the overall objective.
• Value is added to the employee or department when the mutual benefits of each is
recognized and praised and helps add a sense of individual accomplishment to working
on the goal.
• Rewards are given out to employees for achieving goals and used as motivators.

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• Superordinate goals are overarching objectives that are shared by different groups or individuals,

which require cooperation and alignment to achieve.

• These goals are often broader in scope and help unify diverse teams by focusing on a common

purpose that transcends individual or departmental interests.

• An example is the collaboration between research teams and manufacturing departments in a pharmaceutical company to

develop and distribute a life-saving vaccine.

• While each department has its own specific tasks, the superordinate goal of saving lives through effective vaccine

distribution brings them together to work toward a shared mission.

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