1. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Chapter 4 Planning

2. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 What Would You Do? ØConsortium created to compete with Boeing ØSlow progress, with potential ØHow do you take more business away from Boeing ØWhat is your plan?

3. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 After discussing this section you should be able to: Learning Objectives Planning 1.discuss the costs and benefits of planning. 2.describe how to make a plan that works.

4. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Costs and Benefits of Planning ØThe Benefits ØThe Pitfalls of Planning

5. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 The Benefits Intensified Effort Persistence Direction Creation of Task Strategies It Works!

6. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Planning Pitfalls Impede Change & Prevent Adaptation Create a False Sense of Certainty Detachmen t of Planners

7. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Blast From The Past Pericles and Planning ØLeaders must have a vision ØPlanners must be close to events ØPlans must be flexible

8. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 How to Make a Plan That Works Set Goals Develop Commitment to Goals Develop Effective Action Plans Track Progress Toward Goal Achievement Maintain Flexibility in Planning Adapted from Exhibit 4.1

9. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Setting Goals S pecific M easurable A ttainable R ealistic T imely

10. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Goal Commitment ØThe determination to achieve a goal ØIncreased by:  Setting goals through participation  Making goals reasonable  Making goals public  Obtaining top management support

11. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Developing Effective Action Plans ØFor accomplishing a goal, these list the:  specific steps  people  resources  time period

12. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Tracking Progress ØOne method, setting:  proximal goals - short-term  distal goals - long-term ØSecond method:  gather and provide performance feedback  make adjustments in: ªeffort ªdirection ªstrategies

13. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Maintaining Flexibility ØOption-based planning  keep options open through simultaneous investment  invest more in promising options ØLearning-based planning  plans need to be continuously adjusted  encourages frequent reassessment and revision of goals

14. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 After discussing this section you should be able to: Learning Objectives Kinds of Plans 3.discuss how companies can use plans at all management levels, from top to bottom, 4.describe the different kinds of special- purpose plans that companies use for change, contingencies, and product development.

15. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Planning from Top to Bottom Vision Adapted from Exhibit 4.3

16. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Planning from Top to Bottom (cont’d) Vision Mission Tactical Plans Management by Objectives Operational Plans Standing Plans Single-Use Plans Adapted from Exhibit 4.4 Top Managers Middle Managers First-Level Managers

17. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Starting at the Top ØVision  statement of purpose  enduring, inspirational, clear, and consistent with company beliefs and values ØMission  flows from vision  more specific goal statements

18. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Setting Missions ØTargeting  set a clear, specific target ØCommon-Enemy  vow to defeat a rival ØRole-Model  emulate a successful company ØInternal-Transformation  strive to dramatically change the company

19. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Bending in the Middle ØTactical Plans  specify how a company will use resources, budgets, and people to accomplish goals ØManagement by Objectives  develop and carry out tactical plans  four steps ªdiscuss goals ªparticipatively select goals ªjointly develop tactical plans ªmeet to review performance

20. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 What Really Works? Management by Objectives (MBO) MBO & Production 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Probability of success 97% 68% MBO is based on goals, participation and feedback. Companies that use MBO are 97% more likely to outproduce companies that don’t!

21. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Finishing at the Bottom ØOperational plans  day-to-day plans ØSingle-use plans  cover one-time-only events ØStanding plans  plans for recurring events  three kinds ªpolicies ªprocedures ªrules & regulations ØBudgeting

22. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Special-Purpose Plans Planning for Change Planning for Contingencies Planning for Product Development

23. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Planning for Change ØStretch goals  extremely ambitious goals  initially employees don’t know how to accomplish ØBenchmarking  identify outstanding practices in other companies  adapt them to your company

24. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Been There, Done That ØStretch goals are more than just demanding more from employees ØGive employees the tools to succeed ØDon’t punish failure Steve Kerr on Stretch Goals at GE

25. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Planning for Contingencies Planning for Contingencies Scenario Planning ØDefine the scope of the scenario ØIdentify the major stakeholders ØIdentify environmental trends ØIdentify key uncertainties and outcomes of these trends ØUsing steps 1-4, create initial scenarios ØCheck each scenario for consistency and plausibility of facts ØCreate contingency plans from each scenario

26. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Planning for Product Development ØAggregate product plans ØFour keys to faster product development  cross-functional teams  internal and external communication  overlapping development phases  frequent testing of product prototypes

27. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 Overlapping Product-Development Phases for a New “Supercomputer Server January July January July January Block Diagram Evolution of System Specification Simulation ASIC and Board Design Hardware Mock-ups & Models “Bring-up” Full System Prototype Ship Date ConceptualizationSimulationImplementation Adapted from Figure 4.7

28. Management, 2e by Chuck Williams South-Western/Thompson Learning Copyright © 2003 What Really Happened? ØAirbus set specific goals ØBuilt planes that were easier and cheaper to maintain, used the same cockpit, and were comfortable for passengers ØUsed options-based planning  Positioned itself through innovative new features, functionality, and lower costs.