I’m still processing the current class in management accounting. There’s a lot to process, of course, and so much of it relevant to my day job.
Planning is crucial to any endeavor. Certainly the plans change on the fly when needed, but the planning process is what brings the pieces together for decision-making and then adjusting decisions later. Here are some common mistakes managers make in the planning process:
- Failure to consider a long term perspective. Every decision has long-term repercussions. Planning means taking into account all of the intended and consequences and considering the potential unintended consequences both in the short-term and the long-term.
- Failure to consider critical success factors. These are the environmental or operating conditions of the business that are essential for long term profitability. This might be the price of the product, the location of the place of business, or anything else that is critical for success of a particular venture. In a particular industry many success factors are held in common, but not all.
- Failure to allow sufficient time for something to happen. Making a business plan that is successful depends on predicting accurately when revenues will arrive, for example. Anticipating cash to come in the door sooner than it actually does will ruin a plan quickly since running out of cash is never an option.
- Failure to develop achievable and realistic goals and objectives. Shoot for nothing and you’ll hit every time. Shoot for too much and you’ll miss every time. The objectives for success much be realistic and achievable as stated, and those goals need to be written out so everyone can see them.
- Failure to consider all
stakeholders. It’s easy to miss even one. Whether it’s employees or regulators, one weak link in the chain of stakeholders can break a plan.
- Failure to make difficult decisions. Sometimes you have to fire somebody. Or take a risk. Or raise/lower prices. The difficult decisions will come, and not deciding at a crisis point will keep a plan from success. Choosing not to decide is a poor decision.
- Failure to keep it simple. KISS. Success means focusing on the key items of the plan. Over planning with too much detail makes necessary adjustments more difficult and the plan just harder to follow. Keeping it simple makes the success easier.
I’m sure you can, like me, look at the list above and find one or more that have caused a plan in your past to crash and burn. Even just the decision to go back to college requires a plan, and all of the above are potential failure factors in that decision. Here’s a quick look at some of what I had to consider in choosing to enter the EMBA program:
- Long term perspective. Both for Samaritan and for myself, returning to school was good for bringing the skills I needed to succeed in my work not just now but into the future.
- Success factors. Critical to success for school? Sleep. Scheduling. Attitude. Flexibility at work. Delegating responsibilities. Flexibility at home.
- Allowing enough time. Every class has its own workload, and I need to make sure there’s enough time to get the work done, even when it’s coming at a busy time outside of school
- Achievable and realistic goals. Pass classes. Get the work done. Take short trips, not long ones. Keep the Sabbath so that I don’t overdo it. I also set stretch goals, like trying (until I can’t anymore) to keep a 4.0 GPA.
- Stakeholders. My class teammates. My family. Direct reports. Friends. My church. All involved in my life and all are affected by this decision and I needed to make sure I could balance my responsibilities and relationships with the big addition.
- Difficult decisions. Things like deciding to sleep instead of study. Turning in an assignment that is “good enough” so I can get back to my family. Making time to go away with my wife. Hiring people to take a load off my office work.
- Keep it simple. I set the schedule. I work, I study, I rest, I spend time with family. Most everything else has been jettisoned from life until December.
Is my plan succeeding? Mostly. Am I struggling with the above potential failures from time to time? Oh, certainly. But I think Theresa and I considered enough, without having had this course yet, back in the summer that we’ll see the end of school with success in the plan.