Purpose of Planning in an Organization

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Planning is important to the inception, maintenance and sustenance of any business, regardless of industry. The purpose of planning is partly to ensure a successful business launch, as well as to maintain operations, production, marketing, investments and growth. Each stage of business growth and department of the business requires different kinds of planning in order keep from getting off track. These plans include short, medium and long term plans that fit under the larger vision of the business.

Planning Impacts Operations

Part of the purpose and importance of planning is to create a picture of a successful future for the operations of the company. Before you draw your formal plan, begin by taking an inventory of your current operations, through studying the external and internal factors impacting the business. Market research and internal audits help provide the data necessary to determine what it will take to bring the company from where it is now to where it wants to be.

Most businesses use this information to increase efficiency and produce more at the same rates or produce the same output at lower rates. It is also important to consider ways to reach new customers, as well as ways to increase morale and motivate employees to deliver more.

The Importance of Planning

Planning helps the departments in your organization to work in synchronicity, like a well oiled machine. The right hand knows what the left hand is doing because it is laid out in the plan and everyone is clear on it. Planning within an organization must include every department, including production, marketing, technology, systems, human resources, finance and accounting. It gives everyone clarity about how they fit into the larger picture of the company so that they can effectively communicate and focus their work efforts on what matters most, while tuning out what is not essential.

Without a solid plan, everything feel essential and equally important. Consider an engineer in a company without a solid plan who has an upset customer who wants service yesterday, a boss who wants the reports to look good and a coworker who cannot figure out a problem in a new system. She probably feels like all of those problems are equally important because nobody has ever spelled out a clear plan, so she leaves work feeling stressed and with the notion she did not solve any of the problems very well.

Consider that same engineer in a company that has an overall vision of customer care that feels like family. In the short-term plan, there are clear protocols for decreasing customer response time and increasing customer satisfaction. Because of the plan, this engineer knows that customer care is essential and focuses her energy there instead of on the less important crises. The customer ends up happy and the engineer leaves work at the end of the day knowing that she contributed toward the overall mission and vision of the company.

Planning for Different Seasons

Businesses need different plans for different seasons, much like individuals change their recreational activities and clothing to match the seasons. New companies need a solid start-up plan that leaves plenty of wiggle room in finances in order to create a solid foundation for the company to grow on. To do this, you want to research the feasibility and viability of the venture you want to engage in and make sure you have enough money to get started, plus a little extra.

Once your business has been up and running a while, you will need a new plans and strategy in order to maintain your business efficiently. Your business as a whole will need a plan, and then each department will need its own internal plan that contributes to the greater vision. Planning within an organization and within each department happens in conversation so that these departmental plans fit together like puzzle piece that make a greater whole.

In order to grow and expand, your business needs a strategic plan based on market research. The purpose of planning at this state is to help your organization grow at a rate and in a way that maximizes profits and volumes while reducing risk. Your strategic plan will help you diversify your product range and venture into new markets at a rate that keeps your profit margins healthy.

SMART Planning for Success

Just like personal goals and plans must be specific, measurable, achievable, relevant and time-bound (SMART) in order to be effective, business plans must be, too. Good planning within an organization keeps in mind that a plan is crafted for a certain amount of time, like a day, month or quarter. While these short term plans are important, it is equally important to lay out medium-range plans for the next one to three years, as well as long-term plans that look three to five years in the future.

Specifying the time period a plan applies to is important for meeting goals. For instance, if a business says it wants to see 20-percent growth but does not say when it wants to achieve that goal, it's like trying to shoot in the dark and it will probably never happen. It is merely a wish. However, if the plan says it wants to see 20-percent growth within the next three years, it gives everyone something to aim for. The one year plan can be crafted based on that goal and then the monthly, weekly and daily goals can be based on that in order to create achievable baby steps that keep the company moving in a positive direction.

Benefits of Business Planning

The importance of planning cannot be overstated in terms of creating sustainability and longevity for a company. If you do not lay out where you are going and how to get there, you will probably never arrive. Solid business plans break your big goals and vision into workable actions that are clear for every person and department within your organization. Business planning helps to cover your blind spots, reveals your vulnerabilities and equips you to figure out how to best minimize them so that you can maximize profit.

References

About the Author

Suchi Moorty has vast writing experience in magazines and on various online portals. She has been associated with the print media since 2003, and is very comfortable in writing on fields such as health care, chemistry, physics, life sciences, management, human resources, finance and accounting. Moorty has a Master of Science in biology.

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