Long-Range Planning
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.
Divestment
In looking for a husband for your daughter, says an old proverb, don’t ask: “Who’ll make the best husband for her?” Ask instead: “For which kind of a man would she make a good wife?”
Divestment is a “marketing” rather than a “selling” problem. The question is not: “What do we want to sell and for how much?” It is: “For whom is this venture ‘value’ and under what conditions?” The salient point if finding the potential buyer for whom what is misfit to the seller is a perfect, the buyer to whom the venture to be sold offers the best opportunity or solves the worst problem. This is then also the buyer who will pay the most.
A major printing company decided that a mass-circulation magazine it owned was at best a partial fit and should be sold. The magazine had been bought originally to hold its printing contract. They asked, “What is value to a magazine publishing company?” If it is a growing magazine company,” they answered, “its greatest need is cash. For a growing magazine requires heavy cash investments in building circulation for several years. “How can we supply this need of the potential buyer to our own advantage?” was the next question. And the answer was, “By giving him ninety days rather than the customary thirty days to pay his print and paper bill to our printing plants.” The printing company then rapidly found a publishing group that filled their requirements.
The work of the Manager
Managers can improve their performance by improving their performance of these constituent activities.
There are five basic operations in the work of the manager.
- Managers, in the first place, set objectives. They determine what the objectives should be. They determine what the goals in each area of objectives should be. They decide what to be done to reach these objectives. They make the objectives effective by communicating them to the people whose performance is needed to attain them.
- Second, managers organize. They analyze the activities, decisions and relations needed. They classify the work. They divide it into manageable activities and further divide the activities into manageable jobs. They group these units and jobs into an organization structure. They select people for the management of these units and for the jobs to be done.
- Next, managers motivate and communicate. They make a team out of the people who are responsible for various jobs.
- The fourth basic element in the work of the manager is measurement. The manager establishes yardsticks – and few factors are as important to the performance of the organization and of every person in it.
Finally, managers develop people, including themselves.