Planning helps an organization chart a course for the achievement of its goals. The process begins with reviewing the current operations of the organization and identifying what needs to be improved operationally in the upcoming year. From there, planning involves envisioning the results the organization wants to achieve, and determining the steps necessary to arrive at the intended destination--success, whether that is measured in financial terms, or goals that include being the highest-rated organization in customer satisfaction.
Efficient Use of
Resources
All organizations, large and small, have
limited resources. The planning process provides the information top management
needs to make effective decisions about how to allocate the resources in a way
that will enable the organization to reach its objectives. Productivity is
maximized and resources are not wasted on projects with little chance of
success.
Establishing Goals
Setting goals that challenge everyone in
the organization to strive for better performance is one of the key aspects of
the planning process. Goals must be aggressive, but realistic. Organizations
cannot allow themselves to become too satisfied with how they are currently
doing--or they are likely to lose ground to competitors. The goal setting
process can be a wake-up call for managers that have become complacent. The
other benefit of goal setting comes when forecast results are compared to
actual results. Organizations analyze significant variances from forecast and
take action to remedy situations where revenues were lower than plan or
expenses higher.
Managing Risk And Uncertainty
Managing risk is essential to an
organization’s success. Even the largest corporations cannot control the
economic and competitive environment around them. Unforeseen events occur that
must be dealt with quickly, before negative financial consequences from these
events become severe. Planning encourages the development of “what-if”
scenarios, where managers attempt to envision possible risk factors and develop
contingency plans to deal with them. The pace of change in business is rapid,
and organizations must be able to rapidly adjust their strategies to these
changing conditions.
Team Building
Planning promotes team building and a
spirit of cooperation. When the plan is completed and communicated to members
of the organization, everyone knows what their responsibilities are, and how
other areas of the organization need their assistance and expertise in order to
complete assigned tasks. They see how their work contributes to the success of
the organization as a whole and can take pride in their contributions.
Potential conflict can be reduced when top management solicits department or
division managers’ input during the goal setting process. Individuals are less
likely to resent budgetary targets when they had a say in their creation.
While
many of these points are for profit organizations they also relate to Non-Profit
organizations like Altrusa.
References
“The Art
of the Long View: Planning for the Future in an Uncertain World”; Peter
Schwartz; 1996From an article by Brian Hill, Demand Media
