It is still early in the year and like most people, you may have already planned for it or have a New Year’s resolution planner. The idea of planning can serve a great deal and if followed to the letter, it can lead to a tremendous change in your personal life or business. Planning is paramount and without exceptions, it can range from a simple personal New Year resolution to a complex budget or a business plan. As they say, failing to plan is planning to fail.
Planning as a business leader is no different. As a leader you carry the vision of the organisation and the followers you lead; it is difficult to navigate the future without a roadmap and a compass. Planning is an important part of the goal-setting process, and it goes a long way in identifying the strategic actions to be taken, the resources needed as well as the potential obstacles.
A good plan requires you to look at the past, the present and the future. It also requires a reality assessment check in terms of understanding the macro and the micro-operating environment. The macro environment is about the economy, the government regulations including taxation, then you add the competition and other factors specific to your business sector or the industry you are in.
Economic factors to consider include economic growth, interest rates, inflation rates, exchange rates, among others. Government regulations examples are new laws and taxes that may impact your business. Competition is about understanding the size of the business you are in as well as your strengths, weaknesses, opportunities, threats, and that of your competition.
The internal environment considers factors that are within the organisation and that includes the capacity, the potential as well as resources available to it. Examples are working capital, human resources, and information technology infrastructure.
Why is planning important as a leader? First, it plays a critical role in allocating the resources available which is imperative in attaining any objective. Without the needed resources it is nearly impossible to attain your goals.
Planning serves as a guideline of what needs to be done to achieve the set goal. It offers a clear roadmap, direction, and strategic actions to be taken. Without planning you cannot visualise the future, which is key in navigating the uncertain journey ahead. As much as it is not possible to eliminate the uncertainties, with a vision and a good plan you can face the unknown with more certainty and much confidence.
A good plan serves as a scorecard for the key achievement measures. The scorecard should be SMART, that is specific, measurable, achievable, realistic, and timely. If you regularly review your performance, you can track progress and adjust it if it veers off the track. That keeps you grounded to the core and increases the chances of succeeding.
As a leader you don’t work alone, you work with a team and other stakeholders who play different but critical roles in attaining the overall objective. When your team is aware of the plan and perhaps involved in its formation you build consensus and cohesion which are important values for the plan execution. When everyone is aligned, you pull in the same direction and no obstacles can easily defeat a united front.
Let us face it, a plan is a wish list of the things you would like to achieve, and it is always shrouded by doubts and uncertainties, but when you write it down, you give it a life of its own. That generates some sense of assurance and serves as a motivation for both the leader and the team. Planning not only gives you the confidence to solder on but it also serves as a reminder that you have work to do.
Things don’t always work as planned, there are many unknowns even when you have the best plan in the world—having said that a plan helps you to identify potential risks in advance. With that awareness, you can put together measures to mitigate, eliminate and manage the risk involved. In addition, when you are aware of the challenges that would impede the planned success then you have the time and the room not only to prepare but also to put together a plan B.
In conclusion, planning is an important part of leadership and as a leader, you need to always have a plan and plan B. As Robert Green said in his famous book 48 Laws of Power, plan until the end. Think through the possibility that could prevent you from reaching the end goal.
Finally, it is also important to understand the environment in which you are planning, the resources you need to execute your plan as well as the strategy to be employed to achieve the set objective. You also need to communicate with the team for cohesion and support.
Robert Muhia is the Group Chief Finance Officer at Zamara Group.
