What is Planning and Why it is Important for All Businesses

Planning is essential to the success of any organization whether it is a government department, a private sector enterprise or even a small business. A strong execution plan leads to increase in sales, earning higher profits and achieving desired operational success. Planning is the process wherein you think of the future, decide the goals that you wish to achieve as a business and then create a plan or roadmap to achieve those goals in a given timeframe. Now, let’s understand what is planning in detail.

What is planning

The meaning of planning essentially refers to the process where we think in advance about what we want to do, when we want to do it, how it will be done and by whom. Simply said, planning is the process through which we can connect our current position to our future destination.

The process of planning requires setting goals and deciding on the course of action that will help the company achieve those goals. Successful business plans are always time bound as an indefinite timeframe won’t be feasible for a business organization.

Let’s take a look at various characteristics of planning:

Planning is goal specific – Any plan has to have a specific goal or set of goals. For instance, it could be achieving 1000 sales for a retail business or reducing Average Handling Time to under 3 minutes for a customer care center. Through planning, we decide the process and enhancements that help in achieving the given goal.

Planning is a core management function – Planning is the foundation of management. Once you have decided a goal or business objective, and then delegate authority as well as responsibility to your team. Planning also determines the number, type and quality of resources including the staff numbers required to achieve the company’s goals.

Planning is everywhere – Planning is a core function of management at all levels of hierarchy. Whether it is the CEO or a sales representative, everyone needs to be involved with the plan and use creating thinking skills to achieve the company’s goals.  

Planning is future oriented – Planning is aimed at achieving a desired future outcome. You can’t plan for something that has already been done. However, past experiences are used to predict future outcomes and to make strong plans.

Planning is forever – For a business organization, planning is a continuous process and it will continue as long as the organization is in existence.

Planning involves decision-making – One of the main attributes of planning is the presence of multiple alternatives and taking decisions to choose the best apparent course of action. If there is no choice then there can be no planning because no matter what there could only be one outcome.

Planning is an intellectual effort – Planning requires mental expertise. To be a good planner, one needs to have the mental capability of higher thinking, ability to foresee future scenarios, and to proactively envisage the course of action that will help in achievement of the goals. Great planners have superior intellect. One needs to apply mental faculties to carefully explore the various options available and plan resources in hand to optimize the outcome.

When done right, the process of planning offers various benefits. These are:

  • Planning shows the path to the desired goals/business objectives
  • Planning helps predict uncertainties and reduce the risk caused by any unexpected scenarios
  • Planning helps in reduction of wastage of time and resources
  • Planning fosters creative thinking
  • Planning enables better informed decisions
  • Planning helps in setting organizational hierarchy and controlling procedures
  • Planning ensures constant focus on the company’s goals

Through planning you can set the goals, policies, operational procedures, methods and rules etc for the organization. Good planning enhances self-motivation and creative thinking among the employees and leads to overall business success!