Excessive Planning Can Get in the Way of Good Decisions

In their article “Stop Making Plans; Start Making Decisions”, Mankins and Steele discuss the perils of making plans for their organizations. They discuss how the planning process can be time cumbersome and leave less time for implementing decisions. They also claim that the plans they make often become useless when they can finally be implemented. The authors say that organizations need to spend less time making plans, but also make sure the process is constantly updated so that their plans don’t become obsolete later on.
The article discusses how the CEO of ExCom developed a new planning process to improve the quality of the decisions and operations of the organization. This would require the executives meeting with the different heads of management and having long, intensive sessions with them. Unfortunately, this didn’t improve the outcomes of the organization at all, and other organization members did not feel that it worked either. Anonymous respondents said that the process was not only time consuming, it also failed to help managers make real decisions.
The authors say that many executives have lost confidence in the strategic planning process. This is because many of these organizations have invested many resources into developing them, only to find that the plans they made actually end up making decision making more difficult. There are two obstacles that keep strategic planning from working correctly. First of all, the planning is conducted on a periodic basis with the information that is available at the time. However, many changes take place between planning sessions, which makes the plans made obsolete. Secondly, the plans made are made for individual units, but may not necessarily contribute to the success of the organization as a whole. As a result, executives tend to make decisions that are not consistent with the planning criteria that they have established.
The largest problem with periodic planning is that it does not take into account the fact that decision making is an ongoing process. The decisions that managers have to make do not take consideration that the plans that were made earlier did not look at new information and changed variables. When a competitor introduces a new product or a new competitor enters the market, managers have to take that into consideration when they follow a set of plans that were made before this event took place. There are other, less obvious problems that arise as a result of planning. For example, planning at the functional unit level of the organization often causes the functional managers to become irritated with higher-level executives.
The point that the authors want to advocate is that managers must focus on strategic planning that has a direct impact on decision making. They discuss several approaches that successful executives have used to make their planning process more consistent with the decisions they are going to have to make. Most importantly, they keep planning and decision making as two separate processes but make sure to integrate the two. Secondly, they focus on a few key themes. They also make strategy development a continuous process. Finally, they structure strategy reviews to promote real decisions.
The authors say that effective managers must create a process where planning and decision making are done in parallel with each other. This is primarily done by determining the decisions that are going to have to be made, rather than what the final decisions are going to have to be. For example, Boeing sets up financial forecasts and reviews its business plan regularly in order to keep itself on track and be aware of the milestones that it is going to have to overcome. The organization has also developed a Strategy Integration Process to identify and address critical strategic issues that come to light.
Mankins and Steele also claim that successful managers choose a limited number of variables or themes to focus on, and try to make sure that they apply across numerous divisions within the company. This saves the time that it takes to cover all the issues that it would take to focus on a single function in its entirety. It also ensures that they are focusing on issues that are crucial to the organization as a whole. The authors discuss how Microsoft has seven business units, and how every strategy that needs to be implemented must cover at least two of these units.
In order for the strategic development process to be effective, it must be made into a continuous process. This makes is possible for the managers to address a single issue at a time and be ready to make a decision after the planning has been completed. This process also has the advantage of being able to be universally applied throughout the organization, rather than at the business unit level. Textron is a company that has picked up this new approach. Previously, the company had all of its business unit reviews over their second quarter, but now reviews a couple of its business units every quarter. This new planning process has helped Textron go from being an average performer to a superior performer.
Finally, the best planning processes are those that can be reviewed so that these reviews can be used to help make much better decisions. Textron’s initial planning meeting involves reviewing important facts such as profitability of different markets and the actions of consumers and competitors. Evaluating this information is seen as being essential to the later stages in the planning process.
The information in this article coincides with many of the points raised in Davenport’s “Paralysis by Analysis and Extinction by Instinct” article. Both of these articles stress how spending too much time thinking about information can be excessively time consuming and can lead to making decisions with data that is no longer valid. The article also shows similar information to the article “Decision Making: It’s Not What You Think.” Both of these articles discuss how thinking too much about a problem does not do any good unless the decision maker is willing to take action and make taking action a part of the decision making process.