- Written by Rick Riebesell
Dynamic planning is different from traditional planning for a business because of the format used for the plan.
The traditional planning process begins as a strategic plan, created by the policy-making group which is often the owners, and frequently is printed and placed in a three-ring notebook. This printed plan is the basis for the operational plan, describing actions to be taken to achieve the goals set in the strategic plan. The operational plan is printed and conveyed in various ways to productive employees who perform the actions described in the operational plan. The managers monitor the actions of the productive employees to determine their effectiveness in achieving the goals set in the strategic plan. At some point, the results of the actions are given to the owners who will revise the goals or set new goals. The effectiveness of this typical traditional plan scenario depends on the communication between the groups as each group performs its functions. The owners set goals and communicate the goals to the managers, but when actions to be taken to reach the goals are set and given to the productive employees, are the productive employees also made aware of the goals? When actions are taken and results monitored and measured, how soon are these results made known to the owners? When owners are given results are productive employees consulted about results in order to revise goals or set new goals?
The format of the dynamic plan can be as simple as a spreadsheet or take the more complicated form of a specialized software application such as Microsoft Teams. What makes the plan dynamic is that the format is shared and immediately available to all groups. Because the functions of the plan are communicated to all groups as done, there are no communication gaps. With a dynamic planning format, when the owners set a goal, the goal is communicated to all groups including the productive employees. The managers, upon receiving the goal, set actions to achieve the goal, which is communicated to all groups. As actions are taken, the actions taking place and the effectiveness of the actions in achieving the goal are measured, and this information is communicated to all groups. Given the results of the actions taken, the owners may revise goals or set new goals, and these decisions will be communicated to all groups. The process repeats, just as in traditional planning, but unlike traditional planning, all groups are aware of the status of the planning process. In addition, because of the communication format, knowledge unique to any group is more likely to be shared and can be easily communicated to the other groups.
One way to represent the difference between traditional planning and dynamic planning is through a Venn diagram. A Venn diagram uses circles to show the relationships between sets of items. Circles that overlap show a commonality of set items, while circles that do not overlap do not share set items. A simple example is with whales and fish. While whales give birth to live young and breathe above water, fish lay eggs and breathe underwater. Both live in the ocean. Circles containing a set of these items for whales and fish will intersect to show both live in the ocean.
Planning is a set of the following items: owner values, business goals, actions to achieve goals, measuring the effectiveness of actions, and revision of goals. The major groups in a business are owners, managers, and productive employees. The owners articulate values, set goals, and revise goals. The managers use goals to determine actions to achieve goals and measure the effectiveness of actions. The productive employees perform actions and measure the effectiveness of actions.
The traditional planning Venn diagram shows that owners and managers share goal functions, that managers and productive employees share measuring the effectiveness of actions, and that owners and productive employees share revision of goals.
Dynamic planning uses a format that communicates all of the items of the planning set, except for the articulation of owner values, to all business groups. The Venn diagram for dynamic planning consists of concentric circles. Circles with a common center point are concentric circles. A pebble dropped in a pond creates concentric circles. Tree rings (alternate layers of light and dark wood in the cross-section of a tree trunk) are formed as a tree grows are concentric circles. Concentric circles as a Venn diagram illustrate a situation where all things in each circle are contained in each circle of increasing diameter. As an example, from the field of all possible topics one can go to an assigned topic, then to a topic narrowed by experience and then to a topic narrowed to the research question. The largest set, all possible topics, includes the other sets including the smallest, the research question.
The Venn diagram for dynamic planning with concentric circles shows the communication of all of the items of the planning set, except for the articulation of owner values, to all business groups.
A word about owner values. Owner values should be articulated between owners. There frequently can be situations where owner values should not be articulated to the entire business. While owner values are reflected in the goals set by the owners, the communication of owner values should be a matter for the discretion of each owner.
With dynamic planning, all of the groups in a business (owners, managers, and productive employees) have immediate access to all planning items (setting of goals, setting of actions to reach goals, measuring the effectiveness of those actions, and revising of goals) when they occur. The communication gaps, which are so often the reason for the ineffectiveness of traditional planning, are eliminated with dynamic planning. The concentric circle Venn diagram illustrates the primary advantage of using a business planning format that supports dynamic planning.
- Written by Rick Riebesell
To Be Effective, the Planning Process Must Be Constant
A reliable way to accomplish business success is to implement and operate a planning process. Many business owners do implement a planning process and begin to use it, but fail to realize the benefits because the process is intermittent. Then, once the process is perceived as ineffectual, it is abandoned. It is not enough to implement a planning process, that process must be a constant process.
Traditionally, businesses have gone to considerable effort to develop strategic planning and then implement this planning through operational planning and actions taken to achieve strategic goals. But the chasms between strategic, operational, and revision are wide, and most businesses fail to bridge them. With a dynamic business plan, a plan whose format communicates the strategic, operational, and revision aspects, the gap between strategic and operational aspects of planning can be bridged. Sadly, in many situations where planning is perceived to have failed to achieve results, it is not the quality of the planning but the format of the plan that has caused ineffective results.
Consider the case where a strategic plan has been created after a retreat involving the policy-making group. The planning decisions are made by following a decision-making policy utilizing group decision-making. The culture of the business mandates that when a decision is to be made, there is a group involved including those with expertise, those with experience, those who will be asked to perform, and those who own. We will assume that this best practices decision-making is used for all planning decisions made, including those of operations and review. After the retreat, the strategic plan resides in a three-ring notebook, honored by several PowerPoint explanations of its perceptions and goals. The operations group is presented with the PowerPoint presentations and reviews the strategic plan notebook, then formulating actions to meet the goals. After actions are taken, the results are monitored. Yet this ostensibly excellent planning process is doomed. There are vital communication links that will not be made and the plan will not be effective over a period of time.
- Written by Rick Riebesell
Questions Owners Should Ask One Another
Questions initiate, form, and shape conversations. Conversations are the means by which owners articulate values to one another. Without these conversations, without an accurate perception of the other owners' values, we have less information to understand the future actions of those who will influence the future conduct of our life.
The importance of conversations lies not just with the words, for the literal meaning of what is said must be perceived with the understanding that we all obfuscate, mislead, embellish, and understate with our words. The important thing is to maintain the relationship and have the conversation so that we perceive more information: the body language, the tone of voice, facial expressions, and other things that allow us to form a more complete understanding. The purpose of the conversation should not be to receive promises or covenants but to understand and confirm the relationship.