Why Organisations Fail: Lack of Planning

Today I’m continuing my series on the most common reasons I’ve seen businesses fail; for those unaware, you can check out our blog for earlier posts, as well as a range of industry news specific to data protection, environmental concerns and quality management; I digress.

I’ve written a feature drawing inspiration from Peter Drucker’s book ‘The Five Most Important Questions You Will Ever Ask About Your Organisation,’ where he outlines some of his most basic - yet effective - ways to reflect on your organisation’s performance. One of the key things, and most important takeaways from what you’re reading right now is the need to establish a long term vision (otherwise known as a mission statement) that underpins your operations, and the promises you’re making to your customers. This is particularly essential in the context of planning, which is why I mention it before we get into the meat of the topic.

'Businesses often fail because of a distinct lack of both short long-term planning.'

I think the reason for this is that organisations often get caught up with trying to keep their head above water on a day-to-day basis, and forget about the long-term plan. Once the wheels are in motion and you’re hurtling down the freeway, it’s sometimes an inescapable fact that you’re overwhelmed and don’t have the luxury of time to refer back to your plan; or update it as the business changes.

This is where you need to make sure that you’re doing your due diligence in terms of setting up strategic planning meetings, ideally on a 12-week basis. These quarterly planning sessions must include where your organisation will be in the next few months, then the next few years. Go around to everyone at the table and get their vision for the organisation. It’s also worth noting that in these quarterly sessions, otherwise known as management review, be sure to include all the data you’ve got some the previous quarter, as well as a set of measurable goals for the next 12 weeks.

Ask your team: what is the highest possible summit you could reach in the next three-months? What are the potential risks that would hinder you reaching this point? What are your strong points? Likewise, what are the areas you know you need to improve? Finally, What has the customer feedback been like?

This last question is a particularly important thing to consider, as it will inform your team where you need to improve, and should ideally reshape an area of your short-term plan to make sure you change it before the next management review session. It’s a well-known adage these days that failure to plan is planning to fail; it’s well-known because it’s true- especially in the context of organisations competing in a cut-throat environment.

From here, you finish a session having modified your short-term plan for the organisation, in the aim to add to the overall profitability for the organisation in the long term. The right plan will include specific to-do lists, with dates, deadlines and accountabilities. I say accountabilities because it’s important that an individual, or a team realises that they are responsible for trying to turn an underperforming area of the organisation around. They shouldn’t feel as though there’s a figurative gun up to their heads, but people tend to work better when there’s real-life accountability involved; it’s just human psychology.

In closing, failure to run planning sessions will damage your organisation’s ability to respond to potential risks, and failure to forecast for the future will only end to the detriment of your organisation. Your organisation’s mission statement should be a constant reflection point as you convene your management review sessions, and you should be making regular updates to your short-term operations to improve areas of the organisation. It’s very rare, if not impossible for an organisation to just run with its momentum in a perpetually successful way; as the market and demands of your stakeholders change, your organisation should pivot with them. That’s why it’s important to assure your customers that you’re able to adapt in the short term, to ensure long-term viability and reliability of your organisation.

Don’t forget that age-old adage: failing to plan is planning to fail.

Thanks again for your time, and I’ll see you in the next edition of our series on why organisations fail.

Kobi Simmat.

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