If planning is to succeed, proper arrangements must be made to put it into operation. The Boston Consulting Group suggests the following concerns for effective planning: There is the matter of outlook, which can affect the degree to which functional and professional viewpoints, versus corporate needs, dominate the work of planning.

• There is the question of the extent of involvement for members of the management. Who should participate, and to what extent? There is the problem of determining what part of the work of planning should be accomplished through joint effort and how to achieve effective collaboration among participants in the planning process.

• There is the matter of incentive, of making planning an appropriately emphasized and rewarded kind of managerial work.

• There is the question of how to provide staff coordination for planning, which raises the issue of how a planning unit should be used in the organization.

• And there is the role of the chief executive in the planning process. What should it be?

Though planning is conceptually rather simple, implementing it is far from easy. Successful planning requires a blend of many forces in different areas, not the least of which are behavioral, intellectual, structural, philosophical, and managerial. Achieving the proper blend of these forces requires making difficult decisions, as the Boston Consulting Group has suggested. Although planning is indeed complex, successful planning systems do have common fundamental characteristics despite differing operational details. First, it is essential that the CEO be completely supportive. Second, planning must be kept simple, in agreement with the managerial style, and unencumbered by detailed numbers and fancy equations. Third, planning is a shared responsibility, and it would be wrong to assume that the president or vice president of planning, staff specialists, or line managers can do it single-handedly. Fourth, the managerial incentive system should give due recognition to the fact that decisions made with long-term implications may not appear good in the short run. Fifth, the goals of planning should be achievable without excessive frustration and work load and with widespread understanding and acceptance of the process. Sixth, overall flexibility should be encouraged to accommodate changing conditions.

Initiating Planning Activities There is no one best time for initiating planning activities in an organization; however, before developing a formal planning system, the organization should be prepared to establish a strong planning foundation. The CEO should be a central participant, spearheading the planning job. A planning framework should be developed to match the company’s perspective and should be generally accepted by its executives. A manual outlining the work flow, information links, format of various documents, and schedules for completing various activities should be prepared by the planner. Once these foundations are completed, the company can initiate the planning process anytime. Planning should not be put off until bad times prevail; it is not just a cure for poor performance. Although planning is probably the best way to avoid bad times, planning efforts that are begun when operational performance is at an ebb (i.e., at low or no profitability) will only make things worse, since planning efforts tend initially to create an upheaval by challenging the traditional patterns of decision making. The company facing the question of survival should concentrate on alleviating the current crisis.

Planning should evolve gradually. It is wishful thinking to expect full-scale planning to be instituted in a few weeks or months. Initial planning may be formalized in one or more functional areas; then, as experience is gained, a company- wide planning system may be designed. IBM, a pioneer in formalized planning, followed this pattern. First, financial planning and product planning were attempted in the post-World War II period. Gradual changes toward increased formality were made over the years. In the later half of 1960s, increased attention was given to planning contents, and a compatible network of planning data systems was initiated. Corporate-wide planning, which was introduced in the 1970s, forms the backbone of IBM’s current global planning endeavors. Beginning in 1986, the company made several changes in its planning perspectives in response to the contingencies created by deteriorating performance. In the 1990s, planning at IBM became more centralized to fully seek resource control and coordination.

Philosophies of Planning In an analysis of three different philosophies of planning, Ackoff established the labels satisfying, optimizing, and adaptivizing. Planning on the basis of the satisfying philosophy aims at easily achievable goals and molds planning efforts accordingly. This type of planning requires setting objectives and goals that are “high enough’’ but not as “high as possible.’’ The satisfying planner, therefore, devises only one feasible and acceptable way of achieving goals, which may not necessarily be the best possible way. Under a satisfying philosophy, confrontations that might be caused by conflicts in programs are diffused through politicking, underplaying change, and accepting a fall in performance as unavoidable. The philosophy of optimizing planning has its foundation in operations research. The optimizing planner seeks to model various aspects of the organization and define them as objective functions. Efforts are then directed so that an objective function is maximized (or minimized), subject to the constraints imposed by management or forced by the environment. For example, an objective may be to obtain the highest feasible market share; planning then amounts to searching for different variables that affect market share: price elasticity, plant capacity, competitive behavior, the product’s stage in the life cycle, and so on. The effect of each variable is reduced to constraints on the market share. Then an analysis is undertaken to find out the optimum market share to target. Unlike the satisfying planner, the optimizer endeavors, with the use of mathematical models, to find the best available course to realize objectives and goals. The success of an optimizing planner depends on how completely and accurately the model depicts the underlying situation and how well the planner can figure out solutions from the model once it has been built. The philosophy of adaptivizing planning is an innovative approach not yet popular in practice. To understand the nature of this type of planning, let us compare it to optimizing planning. In optimization, the significant variables and their effects are taken for granted. Given these, an effort is made to achieve the optimal result. With an adaptivizing approach, on the other hand, planning may be undertaken to produce changes in the underlying relationships themselves and thereby create a desired future. Underlying relationships refer to an organization’s internal and external environment and the dynamics of the values of the actors in these environments (i.e., how values relate to needs and to the satisfaction of needs, how changes in needs produce changes in values, and how changes in needs are produced).