The limits of my language are the limits of my world -- Ludwig Wittgenstein Introduction: This course is not about writing "business plans" -- such as those written for new businesses and usually submitted to bankers. The course is more about the senior-management function related to managing uncertainties and guiding an organisation in a desirable direction. Therefore, it is related to strategy and leadership. We will learn about different frameworks of planning and the associated concepts, tools, and systems of implementation. We will also learn about the roles and responsibilities of professional planners. Their work includes developing systems and processes that enable an organisation to learn from its experience and develop its capacity to define and pursue its purpose effectively. Parable (Wisdom of the Mountain): What was the last wisdom Hwan imparted to Lao-Li? The parable brings out a key difficulty in management. No matter where one situates oneself, one never gets the complete picture. The top-management view lacks the details visible at the operational level; the operational view lacks the broad sweep characteristic of the top level. Both the views must continuously inform each other. There should be an opportunity for multiple views of a situation to influence long-term decision making concerning that situation. Exercise: Two steps: (a) identify the unknowns and uncontrollable factors relevant to your role and (b) how do you deal with these? Answers indicated various unknown and uncontrollable factors and also diverse managerial responses for dealing with such factors. The responses were found to be associated with different "planning frameworks" to be covered in the course (forecast-based planning, scenario planning, interactive planning, etc.). Session #2: Types of future: predetermined (the future that has more or less already happened), probable future (the future that is likey to happen), possible future (the future that is possible in principle, irrespective of the likelihood of its happening), plausible future (a possible future which becomes believable by an associated chain of events that can produce this future), preferable future (a future that is considered desirble by a group of persons). Levels of uncertainty: Level 1 (clear-enough future), Level 2 (alternative futures), Level 3 (range of futures), and Level 4 (true ambiguity) Evolution of planning: financial budgeting, forecast-based planning, strategic planning, strategic management -- the later stages of planning are associated with increased uncertainties and longer time-frames. Session #3: In preparing for battle, I have always found that plans are useless, but planning is indispensable -- Dwight D. Eisenhower Visibility: Defining long term, medium term, and short term, on the basis of visibility Ends and Means: Network of ends and means; types of ends (goals, objectives, ideals): Goals are achievable within the planning horizon; Objectives are achievable given a longer time-frame; Ideals are never completely achievable, however continuous progress can be made towards ideals. Kinds of planning: Four kinds, based on whether means, goals, objectives, and ideals are given or chosen. Planning postures (orientations): reactive, inactive, preactive, and interactive (proactive) Session #4: For every complex problem, there is always a simple solution, that is wrong -- H. L. Mencken Benefits of planning (proximal and distal): Some proximal benefits: better understanding of the complex environment, clarity about the mental models and assumptions held by the members of the planning team, identification of areas (e.g., technology, competition, customers, organisation's existing practices, etc.) that require further study, development of the skills of analysis, presentation, etc. Mess management: a "mess" is a system of interdependent problems; example: the traffic congestion mess; influence diagram; problem solving vs. mess management. (Here is a simple introduction to ID and here is another; see this for some examples of ID.) Session #5: A trend is a trend; but the question is when will it bend; Will it alter its course; through some unforeseen force; And come to a premature end? Corporate development: In practice, corporate growth is a common aim of corporate planning. However, growth has its own problems. Some books criticising growth: (a) The Limits to Growth by D. H. Meadows et al., (b) The Growth Illusion by Richard Douthwaite (see a review here). Corporate development can be a superior aim. Although growth and development are somewhat related, one can happen without the other. While corporate growth is mere increase in size, corporate development refers to a corporation's ability to define and pursue its ideal(s) and also enable all its stakeholders to define and pursue their own ideals. Corporate development is the ultimate aim of corporate planning. Forecast-based planning: About forecasting: Delphic prophesies; scientific forecasting (trends, underlying mechanisms); factors on which forecasting accuracy depends: stability of the underlying mechanisms; time-interval of the historical data; type of forecasting model used. Used in operational or tactical planning: A forecast does not clarify the ends one should pursue -- mission, objective, etc., must be given. Session #6: 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 Scenario planning: (i) detailed picture of a possible future, (ii) the story should be credible, (iii) multiple such stories. Methods for developing scenarios Session #7: Further discussion on the scenario development methods Case: Scenario Planning at British Airways (i) Why did British Airways welcome the idea of doing a scenario planning project? (ii) Why was the "Halo Group" formed? (iii) How were the scenarios developed? (iv) How were the scenarios used? (v) How were the robust strategies identified? (vi) What difficulties were faced in the scenario planning process? (vii) What lessons were learnt by British Airways? (viii) What did you learn from the British Airways case? Session #8: Quiz-1 (Weight 20%) Memory of the future: Scenarios serve as "memory," enabling managers to perceive events and trends that indicate early signs of some of those scenarios. In this way, awareness of scenarios makes managers alert to their complex environment. Strategic Planning strives to address some of the areas not addressed by forecast-based (or even scenario-based) planning. It focuses on clarifying the corporate mission statement and the corporate objectives and revising these from time to time. Elements of strategic planning: situation audit, developing mission/objectives, and formulating programmes of action; it often involves a formal system of planning; characteristics of effective mission statements Cathedral thinking: Story of the three stone-cutters Session #9: Formulation of mission statements SNAC Analysis: Stakeholders, Needs, Alterables, Constraints Formulate objectives using the following syntax: To satisfy the <need> of a <stakeholder> by modifying an <alterable> within the given <constraints>. ISM (Interpretive Structural Modelling): structuring the objectives -- Methods: (a) using the ISM software, (b) approximate method, and (c) group method For more information on ISM, please refer to the work of John N. Warfield Session #10: Group method for structuring objectives: Exercise: Technology Planning for a College of Education Discussion about the group method: advantages, disadvantages, difficulties, etc. Capabilities of ISM: structuring of objectives, identifying missions (and mini-missions, if any), 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 disgram), designing organisational structure, designing information systems, etc. Introduction to Interactive Planning (IP): Orientation towards strategic management; interactivism, normative planning, and mess management. Principles of IP: Continuity, Participation, and Holism Session #11: Phases of IP: Output of Phase 1: Reference Scenario: It is an account of the future confronting the corporation; it is the future the corporation is in; this is the future that would happen if nothing changes. (Please note that this is perhaps the most unlikely future.) Output of Phase 2: Idealised Design. At this stage, it is possible to articulate the Planning Gap, which is the gap between the Reference Scenario and the Idealised Design. In Phase 3, we try to bridge this gap by selecting appropriate means. In Phase 4, we plan for the resources required to implement the means chosen in Phase 3. Phase 5 deals with implementation and control of the plan. Phase 1: Formulating the Mess The Reference Scenario requires a thorough understanding of the system-in-focus, i.e., a detailed Systems Analysis: A number of tools and techniques can be used to develop structural and functional understandings -- influence diagrams, rich pictures, flow charts, organisation charts, stakeholder analysis, competitor analysis, PEST analysis, study of past performance, study of management style and organisational culture, etc. It also requires Obstruction Analysis -- obstructions to corporate development: discrepancies and conflicts. Finally, it requires Reference Projections, i.e., extrapolation of some key variables based on the current trends. The results of these three components need to be synthesised. Phase 2: Ends Planning This phase requires the stakeholders to produce an idealised design of the system (i.e., the system-in-focus). It is the system the stakeholders would like to replace the present system with, if only they were able to do so. The so-called idealised design does not refer to an ideal system, but an ideal-seeking system. It should fulfill three preconditions: It should be (a) technologically feasible, (b) operationally viable, and (c) capable of learning and adaptation. Session #12: Phase 3: Means Planning Various means: action, course of action, practice, projecs, programme, and policy Phase 4: Resource Planning Phase 5: Design of Implementation and Control Planning as Strategic Conversation: Conversations for action and conversations for possibility; conversational venue, design of conversational process; three aims of strategic conversation: Session #13: Case: Strategic Conversations as a Means for Organizational Change Some episodes of strategic conversation have been described in the case. For each such episode, try to identify the following: (i) In each instance, what was the purpose of the strategic conversation? (ii) How was the conversational process structured/facilitated? (iii) What group/organisational dynamics were experienced? (iv) Was the purpose fulfilled? (v) How will you explain the success/failure of the process? (vi) Finally, draw out your learnings from the whole case. (Planning as a continuous process of strategic conversation; need to achieve all three objectives in strategic conversation; tools and methods used in different conversational venues; success or failure of conversational processes) Session #14: Quiz-2 (Weight 20%) Common mistakes in corporate planning: Session #15: [Review]
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