The Effects of Lack of Planning in an Organization
Organizational planning should include long-term and short-term planning. The plan should predict where the organization will be in two or five years, listing specific, measurable goals and results. The plan should also include a specific "to-do" list that keeps everyone informed of the necessary actions and resources, as well as listing who is responsible for the all the tasks. It should also include a reasonable time frame for these tasks to be accomplished. Failure to plan will damage the effectiveness of the organization and can even lead to complete break-down.
Lack of planning is certain to result in shortages or delays of necessary materials. Without an analysis of how often resources need to be replenished, these necessities will not be found where and when needed. The necessary resource might be something as small as staples for the stapler, or as essential as running out of the raw material needed to manufacture the product that is sold. In all cases, a business a cannot flourish if the management of its resources is not being monitored and planned for.
Cash flow issues are bound to occur if the organization does not plan properly for where and when the finances are needed. Late payments are likely to result in suppliers becoming unreliable or cutting off the supply of their goods or services. Late payments can also result in additional interest payments or other financial penalties that cut into profits. Cash flow problems can go so far as to result in the inability to pay employees on time. This is bound to have a negative impact on employee loyalty and retention.
Without planning, there will be no mission statement and no vision. Employees are most productive when they understand the bigger picture behind what they are doing, so productivity will decrease. There is also likely to be much wasted time, as some workers will be duplicating the work of others, while some essential tasks will be overlooked. This is all likely to result in the need for crisis management. Workers will spend a great deal of time "putting out fires" caused by the fact that no one is able to anticipate the problems that will regularly occur. In addition, larger projects will take longer than necessary, or may never reach completion, because no one did the planning necessary to break them down into more manageable segments.
Employees in organizations suffering from lack of planning are likely to experience low morale. The workers will be aware of their disorganized environment, and will suffer stress and frustration because they will have difficulty executing their assigned tasks. There likely will be a high staff turnover rate, which leads to lowered productivity. Some employees might be laid off because of lowered profits and this will further diminish morale. Other employees might feel unappreciated and over-worked as the organization will be under-staffed. This will exacerbate the downward spiral and the business is likely to fail.