Planning Concepts Prior reading: Competing for the future (Hamel & Prahalad, 1994) Introduction to the course: CP is focused at the senior management level, vested with the responsibility for managing long-term uncertainties. Managerial skills: technical, interpersonal, and conceptual -- importance of conceptual skills for senior managers Parable: Wisdom of the mountain -- implications for management/planning Types of future: predetermined, probable, possible, plausible, preferable Session 2 Prior reading: Strategy under uncertainty (Courtney, Kirkland, & Viguerie, 1997) Exercise: (a) identify the uncertain and uncontrollable factors relevant to one of your projects and (b) state how do you have dealt with these. Answers indicated various unknown and uncontrollable factors and also diverse responses for dealing with such factors. The responses were found to be associated with different "planning frameworks" to be covered in the course (scenario planning, strategic planning, interactive planning, etc.). Levels of uncertainty: Level 1 (clear-enough future), Level 2 (alternative futures), Level 3 (range of futures), and Level 4 (true ambiguity) Session 3 Evolution of corporate planning: Phase 1: financial budgeting, Phase 2: forecast-based planning, Phase 3: strategic planning, and Phase 4: strategic management; for examples of how planning proceses can change in organisations, see: http://www.cfoasia.com/archives/9907-34.htm Types of ends: goal, objective, ideal Example: Cognex (inventor of machine vision technology)
"Cognex still intends to increase its sales to these customers by 50 per cent" (goal) "To be the standard around the world for excellence in vision products and business practices" (ideal) Session 4 Planning postures: (or orientations): inactive, reactive, preactive, interactive (or proactive) [Exercise A city has been destroyed in a devastating earthquake; how will a reactivist urban planner think of reconstructing the city? And an inactivist one? And a preactivist one? And an interactivist one?] Discussion on the city reconstruction example--to explore different planning postures Benefits of forecasting: distal and proximal
Session 5 Dealing with problematic situations: resolving, solving, dissolving Mess management: Example of urban traffic congestion; influence diagram (ID); here is a simple introduction to ID and here is another; see this for some examples of ID; read The Fifth Discipline by Peter M. Senge for additional clarity on influence diagrams. [Exercise Transcribe an article, or a part of it, into an influence diagram and analyse it.] Analysing influence diagrams: merge points, burst points, intervention points, loops, dynamic shifting of loop dominance Growth vs. development: Corporate development as an ideal for corporate planning Session 6 Forecast-Based Planning Tricks used by professional forecasters (ancient and modern) Scientific forecasting: Stability of the underlying generative mechanism Methods: Time-series analysis and causal models (regression, feedback modelling) Issues in scientific forecasting: Quality of mesurements, frequency of data, choice of the mathematical function to be used, feedback among the independent variables, etc. Forecasting accuracy: short term vs. long term; consumer goods vs. industrial goods Paradox of forecasting: If you can forecast it accurately, you cannot plan it; if you can plan it, you cannot forecast it accurately. Only the states of deterministic systems can be forecast accurately, but planning presupposes our ability to intervene in systems, thus rendering them nondeterministic. Forecasting and planning: Forecasting still leaves the question "what should one do?"--hence applicability in operational/tactical planning. Session 7 Some difficulties in forecasting: feedback, nonlinearity, and interdependence; illustration of interdependence (two-player business game); growth rates cannot be assumed. In certain situations, planning for the future becomes more complex than simple resource budgeting. Alternatives to forecasting (follow rather than lead, perpetual innovation, influence the outcome, assume that the future will be like the present, prepare multiple scenarios and plan for each) Scenario-Based Planning A scenario is a coherent and credible story of a possible future. Scenario planning typically happens in two stages: scenario development and scenario workshop. Methods of scenario development: Around the "official future," Morphological analysis, Driving forces and key uncertainties, Trend-impact analysis, Cross-impact analysis, Future-now thinking (enterprise poetry) [Exercise Cable & Wireless (Case)] Self-study questions: What uncertainties were faced by the company? Why did they introduce scenario planning? What benefits were expected from the process? What methods of scenario development were used? Why? What was the idea behind involving the chief executive? What is your independent and critical assessment of the way scenarios were used in the strategy process at Cable and Wireless? Session 8 More discussions on scenario methods British Airways (Case) Discussion: Describe the organization of the scenario development process at British Airways. Describe the organization of the scenario workshops and what was achieved through these. Describe the difficulties faced in the scenario planning process. What are the lessons learnt in the process of scenario planning at British Airways? Session 9 Memory of the future: Scenarios serve as "memory," enabling managers to perceive events and trends that indicate early signs of some of those scenarios unfolding. In this way, awareness of scenarios makes managers alert to their complex environment. "Future Now" thinking: A certain (possible) future is presented as if it has already happened. Session 10 ICL (Case) Discussion: Why did ICL set up the Vision 2000 project? How did the company go about scenario building for the first time in 1993? How was the difficulty in communicating the scenarios overcome? What learnings were derived from the first scenario project? Why was a second scenario project deemed necessary in 1995? What processes and methods were followed for the second scenario project? How were the uncertainties and ideas grouped in this project? What care was taken to avoid a communication problem in the second scenario project? What lessons were learned from the second scenario project? Class test (self-evaluated); panel discussion Session 11 Strategic Planning Concept of strategy: Emery and Trist's typology of organisational environments; relativity of strengths, weaknesses, etc.; SugarScape model Strategic planning: Strategic planning aims to formulate the long-term, medium-term, and short-term ends of an organisation. Typically missions are also formulated through strategic planning, but these are usually not ideals. Formal systems of strategic planning -- continuous revision of the organisational objectives and the scope of its activities Session 12 Mission statement: Function of mission statements; characteristics of effective mission statements (unique, inspiring to stakeholders, etc.). [Exercise Please take any mission statement and assess its effectiveness in light of the five characteristics.] A systematic procedure for developing (or revising) mission statements: SNAC analysis: It produces a list of organisational objectives. ISM (Interpretive Structural Modelling): It structures the objectives in a hierarchical structure enabling us to identify a mission statement. Session 13 Background of ISM (Work of Prof. John N. Warfield) Three methods for ISM: (a) formal algorithm (using software), (b) approximate method, and (c) group method Demonstration of the group method Technology Planning for the College of Education (Case) Session 14 Capabilities of ISM: structuring of objectives, identifying mission, diagnosing organisational problems (you may take problems as the elements and "aggravates" as the relation--this will produce a model similar to the well known Ishikawa diagram), designing organisational structure, designing information systems, etc. Assignment component defined: Choose two topics (one covered in the CP course and another not covered in the course); create a blog with two main entries--one on each topic. Review of the course: Important topics listed by the students: types of future; ends and means; hierarchy of objectives; evolution of planning; planning postures; proximal benefits of planning; four levels of uncertainty; growth vs. development; influence diagram; mess management; solving, resolving, dissolving; forecast-based planning; paradox of forecasting; interdependence (game); scenario planning; morphological analysis; memory of the future; what is strategy?; SugarScape; four types of organisational environment; formal system for strategic planning; mission statement; cathedral thinking; SNAC analysis; ISM -- approximate and group methods; property of relationships (transitivity); mini-mission (intermediate mission); fallacy of detachment Session 15 Interactive Planning From thinking strategically to redesigning the corporation Strategic planning seeks to address the question: What should a corporation do in a changing environment? Usually most strategic planning systems try to: When an organisation faces a truly uncertain environment, there may be little benefit in trying to understand the environment and hoping to gain a degree of control over it. Another alternative approach may be to ensure that the organisation is made robust and remains capable of pursuing the ends it values despite the environmental variations. This is the idea of redesigning corporations. The idea of redesigning corporations is fundamental to Interactive Planning (IP), which aims at renewing the corporation continuously, such that it remains a relevant entity within a complex and evolving environment. IP seeks to achieve corporate development, i.e., a general increase in a corporation's ability to help all its stakeholders identify and pursue their legitimate purposes effectively. Principles of IP: participation, continuity, holism Phases of IP Ph. 1: Formulating the mess Ph. 2: Ends planning Ph. 3: Means planning Ph. 4: Resource planning Ph. 5: Design of implementation and control Ph. 1 produces a Reference Scenario and Ph. 2 produces an Idealised Design. The gap between them is called the Planning Gap. Ph. 3 identifies the means to bridge the planning gap. Ph. 4 specifies the resources required (type of resource, how much, where, when, etc.) in order to implement the means chosen. Ph. 5 is concerned with the design of systems and procedures for the implementation and control of the plans as well as of the planning process. Session 16 Ph. 1: Formulating the mess: What is a reference scenario? It is a picture (description) of the state of affairs as it would turn out if the organisation continues to function the way it is functioning now and the environment continues to impact on the organisation as it is impacting now. The purpose of writing a reference scenario is to highlight the absurd (or shocking) implications of the mess obtained in the planning context and encourage the stakeholders to think of ways to avert the undesirable future implied by the current situation. It is also likely to focus attention on the ends truly desired by the stakeholders. Steps to be followed in drafting the reference scenario: system analysis, obstruction analysis, reference projections System Analysis (SA): Define the system-in-focus (s-i-f) and understand the structure and the functioning of the s-i-f. ["A System is a set of variables sufficiently isolated to stay discussable while we discuss it." Ashby] Structure: Reporting relations, policy structure, business model/strategy, life-cycle stage, management style and preferences, etc. (i.e., all those relatively stable relationships and patterns that characterise the unique features of the s-i-f, which can be assumed to continue into the future.) Functioning: transformation process, information processing, roles played by the s-i-f in its wider environment, interaction with other systems (e.g., interest groups, regulatory agencies, competitors, etc.) in the wider environment (i.e., all those processes within the s-i-f and at the boundary between the s-i-f and its environment that characterise the operation of the s-i-f, which can be assumed to continue into the future.) Obstruction Analysis (OA) identifies the key obstructions to the s-i-f's development, i.e., factors which would prevent the system from playing a constructive role in facilitating the purposeful activities of its subsystems and of its supersystem. There are two classes of such obstructing factors: discrepancies and conflicts. A discrepancy is a mismatch between the proclaimations and the actual practice. Such discrepancies can exist with respect to ends, means, resources, structures, stakeholders, beliefs about the environment, etc. Conflicts can exist between the corporation and one of its units/stakeholders, between two or more units/stakeholders, between an individual and the corporation, between two corporations, etc. Such discrepancies and conflicts are obstructions to corporate development. Reference Projections (RP) involves the identification of quantitative patterns discernible in the operation of the s-i-f (e.g., patterns of sales, number of employees, cost structure, market share, various measures of the system's performance, etc.). Finally, all the qualitative understanding developed through SA and OA are combined with the quantitative projections obtained through RP in order to produce a credible story (called Reference Scenario) that would clearly communicate the undesirable future confronting the s-i-f and create a sense of urgency within the s-i-f to do something about it. In other words, it helps the stakeholders of the s-i-f see the mess their system is in and the gravity of that messy situation. Session 17 Ph. 2: Ends planning: The purpose is to create the Idealised Design (ID), which is the design of a system that can serve as a vehicle to take the organisation towards its preferred future (or its ideal). In the process of designing this, the preferred future (or ideal) gets discussed and clarified. Three conditions to be fulfilled by the ID: It should be (a) technologically feasible, (b) operationally viable, and (c) capable of learning and adaptation. For a system to be capable of learning and adaptation: the stakeholders should be able to change it when they desire, the system should allow experimental processes, and it should have an appropriate type of management system (see Ch.6 of Ackoff's Creating the Corporate Future). Organisation of the IP process: Circular organisation Session 18 Ph. 3: Means planning: Means that are of a dissolving type are preferred in Interactive Planning Various means: Acts, Courses of action, Practices, Projects, Programmes, Policies Ph. 4: Resource planning: Three classes of resource: INPUTS, FACILITIES, PERSONNEL [MONEY is not a resource in this sense, but a meta-resource, because it is required in order to acquire the resources.] Planning for the resources: Finding the resource gap and selecting methods of bridging the gap. Also finding out how much money will be required to do so. Ph. 5: Implementation and control: Implementation and control of PLANS: the need for integrating this phase within the overall planning process (e.g., new discrepancies may be discovered during implementation and control). The planning system should be capable of converting bad decisions into useful experience through a process of corporate learning. Implementation and control of the PLANNING PROCESS: The need for champions; the advantage of a comprehensive planning framework, the services of planning professionals. Planning as Strategic Conversation [Module 6] Three general tasks of "strategic conversation": (a) Developing a shared understanding (conversations for action) (b) Developing diverse understanding (conversations for possibility) (c) Ensuring a constructive relationship between the above two (grounding the possibilities in new types of action and orienting the actions towards new possibilities) Session 19 Strategic Conversations as a Means for Organizational Change (Case) Some episodes of strategic conversation have been described in the case. For each such episode, try to identify the following: (a) What was the purpose of the strategic conversation? (b) How was the conversational process structured/facilitated? (c) What group/organisational dynamics were experienced? (d) Was the purpose fulfilled? (e) How will you explain the success/failure of the process? Finally, draw out your learnings from the whole case. Session 20 Difficulties in Planning [Module 7] Obstruction to an effective future-oriented management practice: Factors that contribute to long-term success and failure: .jpg){kind=small} |
