The future will not just happen if one wishes hard enough.
The future requires decisions – now. It imposes risk – now. It requires action – now. It demands allocation of resources, and above all, of human resources – now. It requires work – now.
The idea of long-range planning – and much of its reality – rests on a number of misunderstandings. The long range is largely made by short-run decisions. Unless the long range is built into, and based on, short-range plans and decisions, the most elaborate long-range plan will be an exercise in futility. And conversely, unless the short-range plans – that is, the decisions on the here and now – are integrated into one unified plan of action, they will be expedient, guess, and misdirection. “Short range” and “long range” are not determined by any given time span. A decision is not short range because it takes only a few months to carry it out. What matters is the time span over which it is effective. Long-range planning should prevent managers from uncritically extending present trends into the future, from assuming that today’s products, services, markets, and technologies will be the products, services, markets, and technologies of tomorrow, and, above all, from dedicating their resources and energies to the defense of yesterday. Everything that is “planned” becomes immediate work and commitment.
How to Abandon
Abandonment must be practiced systematically.
To abandon what?” and “To abandon how?” have to be practices systematically. Otherwise they will always be “postponed,” for they are never “popular” policies.
In one fairly big company offering outsourcing services in most developed countries, the first Monday of every month is set aside for an abandonment meeting at every management level from top management to the supervisors in each area. Each of these sessions examines one part of the business – one of the services one Monday, one of the regions in which the company does business a month later, the way this or that service is organized the Monday morning of the third month, and so on. Within the year, the company this way examines itself completely, including its personnel policies, for instance. In the course of a year, three to four major decisions are likely to be made on the “what” of the company’s services and perhaps twice as many decisions to change the “how.” But also each year, three to five ideas for new things to do come out of these sessions. These decisions to change anything – whether to abandon something, whether to abandon the way something is being done, or whether to do something new – are reported each month to all members of management. And twice a year all management levels report on what has actually happened as a result of their sessions, what action has been taken and with what results.
How to Use Objectives
Objectives are not fate; they are not direction.
If objective are only good intentions, they are worthless. They must degenerate into work. And work is always specific, always has – or should have – clear, unambiguous, measurable results, a deadline, and a specific assignment of accountability. But objectives that become a straitjacket do harm. Objectives are always based on expectations. And expectations are, at best, informed guesses. The world does not stand still.
The proper way to use objectives is the way an airline uses schedules and flight plans. The schedule provides for the 9AM flight from Los Angeles to get to Boston by 5PM. But if there is a blizzard in Boston that day, the plane will land in Pittsburgh instead and wait out the storm. The flight plan provides for flying at thirty thousand feet and for flying over Denver and Chicago. But if the pilot encounters turbulence or strong headwinds, he will ask flight control for permission to go up another five thousand feet and to take the Minneapolis-Montreal route. Yet no flight is ever operated without a schedule and flight plan. Objectives are not fate; they are direction. They are not commands; they are commitments. They do not determine the future; they are a means to mobilize the resources and energies of the business for the making of the future.
The Management Letter
Managing managers requires special efforts not only to establish common direction, but to eliminate misdirection.
Setting objectives is so important that some of the most effective managers I know have each of their subordinates write a “manager’s letter” twice a year. In this letter to his superior, each manager first defines the objectives of his superior’s job and of his own job as he sees them. He then sets down the performance standards that he believes are being applied to him. Next, he lists the things he must do to attain these goals – and the things within his own unit he considers the major obstacles. He lists the things his superior and the company do that help him and things that hamper him. Finally, he outlines what he proposes to do during the next year to reach his goals. If his superior accepts this statement, the “manager’s letter” becomes the charter under which the manager operates.
Mutual understanding can never be attained by “communications down,” can never be created by talking. It can result only from “communications up.’ It requires both the superior’s willingness to listen and a tool especially designed to make lower managers heard.