Effective planning is a critical step for any team that is embarking on a new business or project.
Though many of us know by instinct that planning is important, some of us may fall into the trap of planning for the sake of planning. When plans are not done effectively, we put the whole team, project and business at risk.
As the old adage goes, “If we fail to plan, we plan to fail”.
Therefore, it's critical for teams to have clarity of the importance of effective planning for their businesses and projects. Once they realise its significance, teams then need to comprehend what makes a plan truly effective.
Why is effective planning important for business?
As we get busy in our day-to-day, it is easy for us to lose sight of the value of a well-thought-out business plan. First, let’s revise the reason why we should put our resources into laying out a clear plan forward for our projects.
Optimise utility of resources
In the modern era, human capital which is expressed in the form of knowledge, time and money is the most precious resources that a business can have. Because of this, a team would be wise to plan on how to effectively make use of their available human capital.
In terms of effective planning, this means optimising the utility of all team members’ knowledge in the most efficient way possible. When time wastage in a project is reduced, the cost incurred from hiring the skilled team members is also reduced.
During regular planning sessions, teams can identify any current resource wastage and further optimise their resource utilisation. This exercise is to be done cyclically to ensure the adjustments are made to the changing business landscapes.
Assess risks and prepare for challenges
Planning sessions also provide a platform for the company to assess risks and challenges. Risks such as financial, economic, operational, reputational and other types of risks are critical for teams to consider regularly.
By exercising common sense during planning sessions, the team would be able to identify their status quo, discuss possible outcomes, and decide the best way to navigate around those risks.
As these challenges may present themselves in the future, uncertainty is a constant that the planning committees need to be bear in mind. Hence, carrying out forecasts and simulations is a requirement for a more effective planning outcome during those discussions.
Motivate internal and external stakeholders
Talking about the future of the team, business or company is at the core of any planning session. Each and every member of the group would want a brighter and better future for themselves.
With this in mind, a productive plan is one that helps increase motivation for both the internal and external stakeholders of the business.
By having an effective plan that clearly charts the path towards the shared vision of the company, internal team members would be clear of the reward that await them in the future. Therefore, business plans could act as a driving factor for employees, directors and business owners to strive more earnestly for the future.
Similarly, effective planning would also address external stakeholders motivations. By gaining clarity of the business strategy and the incentives that may result from its successful execution, externals stakeholders such as vendors, suppliers, customers and others would be more motivated to help support the company.
Continuous growth of the business
Overall, effective planning is vital for the growth of the company.
Planning comes with the overarching tasks of evaluating the current standing of the business, forecasting future risks and opportunities, and working out the best method of using the team’s resources to execute business operations.
However, by ensuring that effective planning is conducted routinely, the company sets itself on the path of continuous growth and development of the business.
Since we now understand the importance of planning and strategising, let’s look into what makes a plan truly effective.
What are the factors that make up effective planning?
A business or project plan needs to have the following criteria for it to be considered good.
Aligned with vision
When designing a plan for a business, we need to ensure that the plan is aligned with the company or team vision. As the vision of the company acts as the guiding north star for its whole operation, any business plan also needs to be moving in the same direction.
A strategy that does not align with the company’s vision is one that has a broken compass. Make sure to always orient business plans in the same direction as the team’s vision.
Grounded to the local context
Another critical factor of effective planning is that it needs to take account of the team’s current circumstance. In other words, this means to factor in the company’s finances, human resources, operational capacity, branding policies and other components of the company into the plan under discussion.
Though this may seem like a goliath of a task, effective planning requires us to conduct this as best as we can. The more local information about the team we consider in the business plan, the more grounded the plan will be. Hence, the more likely the team will be able to successfully follow through with the plan.
Once the analysis and forecast stages are done, a strong plan will include actionable outcomes for team members to execute. Planning sessions are only effective if the conclusions of those sessions are seen through with actual execution.
A simple but effective method of ensuring plans are action-oriented is by setting S.M.A.R.T. goals. This means setting up execution goals that are specific (S), measurable (M), attainable (A), relevant (R) and time-bound (T).
Easy to understand
Another simple but often overlooked factor of effective planning is that the business plan needs to be easy to understand. If the plan under discussion becomes too complicated for the team to understand, that would risk a decrease in involvement by the members.
Using visual tools like charts, tables and mind maps is great for providing clarity. Interactive simulations are especially useful when discussing multiple scenarios in contrast to just regular text presentations.
Planning as a single-time activity is worthwhile, but it transforms into effective planning when organised regularly. By iterative planning sessions, the business and the team behind can continually improve on their products as well as their operations.
With the magic of compounding, the positive outcomes of the plans will build on top of one another to yield continuous growth for the business.
How Causal can help
Causal is an easy-to-use tool that is made for creating interactive charts and simulations. The out-of-the-box visualisation tools that Causal provides would enhance the planning sessions experiences to help your team realise effective planning for your business.
By using Causal, you can conduct your business planning session with,
- Simple chart visualisations for clear communication of business plans.
- Interactive dashboards that can be edited during planning sessions, hence enabling real-time simulations.
- Forecasting models that account for multiple outcomes for better risk and opportunity assessment.