Planning and Control are indispensable

While as a leader/manager you must practice all managerial functions like planning, organising, leading, motivating, communicating, coordinating, and controlling – you must focus on the crucial relationship between planning and control without fail.

Planning and control are known as Siamese twins of management. I mean, that these are inseparable from each other. Planning has no meaning unless accompanied by appropriate control and you cannot enforce any control unless you have a plan. A modern enterprise con­tinuously cycles back and forth be­tween planning and controlling.

To start with, the manager makes plans and then uses the control system to monitor progress to­wards the fulfilment of these plans. Such a practice ensures that you always remain on track and avoid any kind of sub-optimal performance in your operations.

How do Small Businesses benefit from planning?

The institution of effective planning and control systems – both during the project implementation and operation phases can prove beneficial to the entrepreneur in one or more of the following ways:

• Ensuring that the project or the program is completed without unwanted costs and time overruns.
• Ensuring that the scope of the project is not altered during the project gestation period and if there are any unavoidable changes in the project scope, these are thoroughly discussed with project sponsors – so that cost and time frames are revised suitably.
• Meticulous planning and control systems during the operation phase of the project will ensure that all-important operational parameters like cost of production, expenses on salaries and wages, financing charges, promotional and advertising expenses, lease rentals, and other avoidable expenses are kept under check.
• The firm can deploy suitable strategic planning tools to undertake structured performance evaluation in various areas like Quality Control, Customer Relationship Management (CRM), Portfolio Management, Competitive Analysis, and others.

So, what’s included in PLANNING?

Planning, as we all know, means deciding the future course of action. In other words – planning will mean what to do, when to do, what to do, who will do (team), and what should be the rules, procedures, policies that follow. When we plan a mega project or any big activity (like Mumbai Metro, Asian Games, or Commonwealth Games) – it may encompass a series of small secondary and tertiary plans and activities – these can be called decisions. So, in essence – planning and decision-making are the two sides of the same coin. Planning can be strategic, tactical, or operational.

Strategic Planning

Strategic Planning is generally long-term (covering periods of over 3 years to 7 years or even 10 years) and is initiated by the top management. Some good examples of strategic planning may be opening offices and showrooms in foreign countries, undertaking growth and diversifications, mergers and acquisitions, and joint ventures. Strategic planning provides the vision of the top management about the future of the organization.

Tactical Planning

The broader vision of the organization set up by the top management is broken down into yearly chunks and the middle management works on these yearly chunks to realize the whole vision eventually. This is called tactical planning.

Operational Planning

Finally comes the day-to-day operational planning which is undertaken by lower management or the front-line functionaries. The purpose of operational planning is to directly support tactical plans and indirectly support strategic plans.

Contingency Planning

We also must understand another kind of planning known as Contingency Planning. Contingency Planning is done to provide for any unforeseen future event or contingency. Let me emphasize that contingency planning is very important in business due to the very uncertain nature of the business.

How do we think about CONTROL?

While planning looks forward – the control function looks backwards to ensure whether the plan was accomplished properly. There are essentially four components to any good control process – namely setting standards or the target, actual performance, comparing performance with the plan/ target, finding the deviation or variance, and lastly taking the corrective action.

In actual practice, we deploy many types of control. These could be feed-forward, concurrent, and feedback controls. Then there are strategic controls – namely premise control, implementation control, Special Alert Control, and Strategic Surveillance Control.

A corporate executive or an entrepreneur can apply a suitable control mechanism to ensure the success of their business ventures/projects. In business and industry – the control function is used with advantages in areas like Production Planning & Control, Project Control, Cost Control, Administrative Control, and others. Various control techniques generally deployed include Direct Supervision and Observations, Financial Statements, Budgetary Controls, ROI, Break-even Point, MIS, and Management Audit.

Strategic Planning Tools

Planning and control are vital to your mission’s success. For effective planning and control, you must make use of various planning and strategic management tools. You can deploy SWOT Analysis for undertaking the situation analysis, PESTEL Analysis for scanning the external environment, BCG Matrix for doing Portfolio Planning, Porter’s Five Forces Model for formulating your competitive strategy, and Balanced Scorecard for analysing the performance of an enterprise. Likewise, there are many more tools to help you with every aspect of your business planning and control.

Are there any other planning tips and operational practices that you have followed in your business to your advantage? Let me know in the comments below.