Innovative planning eliminates missed opportunities - Column

Planning is an inherently creative process although we tend not to think of it as such. Some accountants will surely disagree. Budgeting and sales forecasting, for example, are planning processes, yet few consider them to be creative activities in the common sense of that word. Unfortunately, this viewpoint can be a significant barrier to planning effectiveness. Developing breakthrough business and marketing strategies requires that creativity be an integral part of the company's planning processes.

Pause for a moment to think about how your own company undertakes the vital task of planning for its future. While every company involves itself in planning of one form or another, the approaches employed are extremely diverse. Interestingly, planning processes most often evolve in step with the firm's management, becoming more sophisticated as the company itself grows. Younger, developing companies, for example, often struggle without benefit of the creative thinking and planning skills that many, though not all, of their larger counterparts enjoy.

In entrepreneurial firms, we often note that planning consists of little beyond budgeting for upcoming periods. As an organization begins to grow, forecasting sales and customer count by daypart is typically undertaken. Further company growth draws increased management attention to the market environment in which the company finds itself and expects to operate as it grows over time. Eventually, when the organization has become well established, each of these elements is integrated into a comprehensive planning, the objective of which is the development of strategies and action plans that will guide the company into the future.

The presence of innovative thinking in any aspect of business planning has little, if any, positive correlation with management's level of sophistication in the planning process itself. Indeed, the correlation may actually be negative since, as organizations grow larger and more bureaucratic, they tend to stifle or otherwise neglect thoughtful management of their own internal creative processes. Consider, for example, the firm whose R & D group creates a new menu item and then expects others to find customers who will order it. A clear case of misdirected creative effort.

As we have noted, managers all too often focus on the quantitative aspects of planning. That unfortunate situation is exemplified by those who respond to a request to see the company's plan by presenting a copy of their latest budget. Although somewhat extreme, that clearly illustrates the point that too little time is devoted to the qualitative aspects of competitive analysis and, more important, to the creation and evaluation of sound strategic alternatives.

The tendency to focus on quantitative aspects is natural. Regardless of our educational backgrounds, we likely have been trained from an early age to work with quantified information at varying levels of sophistication. Working with abstract concepts and qualitative information, by contrast, is more challenging because of its instrinsic nature. Since the human mind tends to be inherently lazy, we naturally lean toward quantitative analytical approaches to problem solving. Innovative thinking is hard work, because it requires not only that we deal in the abstract but also that we simultaneously be creative.

Despite its more complex nature, managing innovative thinking as part of the planning process can be accomplished more effectively than many managers realize. For example, it is generally beneficial to schedule the planning process in a way that facilitates creative thinking by including adequate time periods for passive and active creative thinking to occur at appropriate points. Further, a variety of tools and techniques exist to aid in stimulating, controlling and directing creative activities, so that time expended in the planning effort generally is employed even more productively.

Abundant evidence exists that making innovative thinking a key part of the planning effort can generate breakthrough strategies that lead to improved long-term corporate performance. When applied to corporate planning, it can lead to new ways of viewing an industry, the firm's market environment and the company's ever-changing role within them. In product planning, creative thinking processes aid in finding new applications for existing products and services, innovative ways of utilizing company assets and, of course, to create entirely new products and services. Marketing planning employs creative processes in myriad ways that relate to pricing, distribution and promotion of new and existing products.

Whether your company is a multidivision conglomerate or fledgling venture, planning and innovative thinking play an equally important role in achieving long-term success. Traditional ways of looking at the world around us can, and frequently do, create artificial barriers to seeing things as they truly are or even as they might be. How a company views its environment, discerns threats and opportunities, foresees attainable objectives given existing resources and designs its plan for future development will ultimately define its future.

Parochial thinking occurs naturally. It therefore can be a dangerous trap awaiting the unwary. Pushing our vision beyond its typically myopic confines demands substantial effort, often more than we are readily willing to invest. Envisioning the future is not an easy task, but the rewards are to those who both try and succeed.

Shareholders and analysts are often among the first to discern a company's long-range prospects. For them, evaluating financial performance is a relatively simple task, given readily available data. Beyond that, investors consider the company's quality of management and its plans for future growth and development in conjunction with what they themselves perceive to be the prospects for both the company and its industry. The synthesis of these elements become prime determinants of share price. Similarly, owners of privately held firms do, or at least should, look at their investment in similar fashion.

As the food service industry continues its exponential change, new opportunities unfold. Those firms whose management teams are quick to discern such opportunities and relate them to their own existing resources and investor objectives and subsequently devise a plan that capitalizes on both will likely reap substantial rewards.

The world about us is, indeed, changing ever faster. Keeping pace demands that innovative thinking be an integral part of our planning processes. As Alan Kay, a fellow of Apple Computer, has said, "The best way to predict the future is to define it." Define your own company's future by assuring that true creative thinking plays a major role in all of its planning efforts.

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