The Levels of Planning in Business
A new small business will not require many levels of business planning right away. However, a business owner may begin with an initial business plan and need to use different levels of business planning as the company grows. In the growth years of a business, new departments or functions will need to be created to meet customer needs, and these units will require goals that support the overall goals of the firm.
A business owner has to choose a model of planning, such as strategic planning, that will guide the entire business. Planning is about setting goals that can be timed and measured to determine if a company meets the desired level of performance. Without a strategic plan, a business owner will make more reactive decisions in response to the market. With a strategic plan, all of the firm's employees will know what direction to take.
Once a business has grown to a certain point, a business owner or manager will begin to organize employees into departments, teams or business functions. Employees will support a specific product, perform a specific function or serve customers in a defined market. At this level, regardless of business size, a department or team manager must collaborate with the owner or company manager and determine what part of the firm's goals will require his department's tactical plan. This should be a two-way process so that the staff will buy into goal setting and give their input.
It used to be that middle-level managers created a tactical plan - how the different units of the company will implement the goals in a broad sense - and that lower-level managers created operational goals. Now, many organizations do not have middle-level managers.
Therefore, department-level managers end up doing tactical and operational planning. This level of planning requires that a manager consider which employee or group will be responsible for each department goal at the operational level. This will include looking at the specific activities that employees perform and how they interlace to support the department's goals.
At the direction of their manager, individuals can write goals to illustrate specifically how they will help achieve operational goals. These should be as specific, measurable, achievable, relevant and timed as the goals at the other levels of planning.
Individuals are also a good source of information about the product or service they support. They can suggest ways for the company to match the strengths of the business with current opportunities in the market.