It’s More Than Planning

This is the text as I submitted for my summer Supply Chain Digest (SCDigest) articles. For more than a few years I've given SCDigest editor Dan Gilmore a break by writing an article for his weekly column, First Thoughts. Enjoy the raw form of the article. – DKS

“The plan is garbage. Don’t tell me the plan. Tell me what we want to happen, what will keep us from making it, and what are we going to do to make sure we make it!”

Among military leaders (Sun Tzu, Alexander, Napoleon, Von Moltke, Eisenhower) there are many pithy quotations about how important the planning exercise is. We often see these at the start of articles, the author hoping the reader’s recognition of the name associated with the quotation legitimizes yet another article written by somebody who writes for a living.

Nobody famous or important uttered the words that start this article. I said them in a meeting last week with a client. I’m not famous. I don’t write articles in the trade press for a living. I coach people who want to become effective in the planning and execution of their businesses. When I do write, it is to teach people to think differently.

Are you ready to think differently?

Planning, not the Plan

There is a huge difference between the act of planning and the apparent product of that effort, The Plan. The Plan for the most part is a wishful dream, how in the best conditions we dream that events will unfold. The Plan assumes things will happen that never will, and ignores things that surely will happen. The Plan depends on the committed support of people who have no apparent reason to lend support, and it ignores the real stakeholders.

However, all that development of The Plan assumes that people actually engage in the effort of developing a plan. That assumption is faulty. People don’t plan.

Most groups fail to even plan and organize the smallest of projects. Here is an example of one of the little exercises I use with my client groups to find out whether leadership and planning DNA exists in the organization.

The Binder Test

We have all attended workshops in which there is a binder of session materials. Usually the organizer hands out a prepared binder with dividers, indexed tabs, and the workshop materials. We don’t do that; we make the group assemble their own workshop binders. We pile all the supplies, binders, dividers, pre-printed index tabs, and filler material in the middle of the table. One complete version of a finished binder sits next to the supplies. At the start of the meeting, I tell the group that everything they need to make their binders is on the table, and give them five minutes to make their books.

In the five years we've been doing this, only two groups have actually gotten the binders completed in less than ten minutes. Most groups take about twenty minutes, and there are stragglers. Some individuals will take the example binder, quietly figure out what to do, and then execute their own binder. Sometimes the self-reliant people help the rest of the crowd. But rarely will somebody take charge, figure out what needs to happen, and then lead the group to finish.

Look at your circle of influence and ask this question: “Could we pass the Binder Test?”

Successful planning requires leadership. Somebody must step up and start leading the group to organize and plan. The groups that successfully complete my exercises always have someone who takes action first, communicating what they are doing along the way, leading the rest of the group along the path. Planning is a leadership activity.

The planning that I see in business today astounds me. Leadership does not appear to care or understand. What passes for planning in many companies is so ineffective that I don’t need to wonder how the client failed to accomplish their objective. Failures do not happen because of people's poor skills or inability to do the job; failure comes from an absence of active leadership, and from planning that hasn't been done.

A list of actions compiled on a sheet of paper is not a plan; it is just a list of tasks. You must ask and answer leadership questions: Are these the right tasks to do? Are these tasks in the right order? Are the right people doing these tasks? Are these tasks going to get us to the objective?

The biggest leadership question you must ask is, "Are we working toward the right objective?"

“Tell me what we want to happen.”

What is the desired outcome? It’s just another way to say what you want to happen. It's such an obvious step that many of us just skip past it, assuming that we know what we want to accomplish. A question so obvious that we don’t take the time to really define it. We consider our objectives so obvious that everyone should instantly understand the context, the meaning of the objectives. The objectives are so obvious that our plans just say “Install Software,” “Install Racks,” or “Deliver Package.” For the sake of brevity, or perhaps just out of laziness, we consider the objective so obvious that we fail to define what we want as the outcome.

What do I mean by the outcome? Here are some examples:

Instead of “Install Software,” we use:

Install the software between the hours of 2:00 AM and 4:00 AM, including all configuration settings, file pointers and user permission files. Test to ensure that the application launches and that it opens and closes all production files across the network. The installation must be completed, tested, and the production system available for the operations to start using no later than 5:15 AM.

Instead of “Install Racks,” we use:

Install the pallet racks to the specifications on the drawings. Ensure that all beam-locking pins seat. Sweep all anchor dust and wipe concrete dust off the posts. Shim the uprights so the posts are plumb to less than ¼ inch over 10 feet in both transverse and lateral directions. Complete each double row, including anchors and tightening all hardware, before moving to the next double row. Update progress on the project drawings as each double row is completed and ready for use. Complete a minimum of four double rows per day. Do not start a double row unless it will be finished that day.

What makes these outcomes better than “Install Software” or “Install Racks”? Details; the kinds of details that define the quality of the outcome — the “how I want it” — define the “when I want it,” and the “what I want.” Defining the outcome with this kind of detail increases the value of the outcome, and is the first big step towards creating a successful plan. Well-defined outcomes go beyond the so obvious trap that many managers fall for. Defining the details of the outcome is an act of leadership that ensures successful planning.

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It's More Than Planning - Contd.

“What will keep us from making it?”

When I see a plan that is nothing more than a sequential list of tasks, I know the people who created the plan made no effort to consider the risks. When I see conditional statements in the plan (if this happens, then do this …) I know the planners thought about some of the things that could go wrong. Conditional steps in a plan indicate that the leaders are thinking of the risks.

Throughout the planning process, leaders have to dive deep and identify the strategic risks involved with a plan. What kinds of strategic risks you need to worry about depends on the scope and scale of the plan. Strategic trends help to define strategic risks, and tactical trends define tactical risks. Strategic trends happen outside the business, while tactical trends happen both inside and outside the business. A business can control the tactical trends by working on developing the tactics used in execution and then execution performance. However, even the strongest of business has little influence on the strategic trends. Strategic trends are the external forces that present opportunity and peril to the enterprise. The leaders must understand which strategic trends affect the business and the plans for the business.

What kinds of influencing trends should a leader consider? Moreover, where can a leader turn to figure out what the influencing trends are?


Perhaps the gold standard for global planning is the work that Shell Oil does developing Scenarios. In the early 1970s, the senior executives at Shell asked the planning group to identify what business conditions the company should plan for. These planners, led by Pierre Wack, developed two competing scenarios that predicted the oil shock that followed two years later in 1973. In one scenario, Wack’s team predicted an armed conflict in the Middle East, potentially involving Israel, various Arab states, and the associated allies, triggering an economic response by the major oil producing Arab states.

Such events did happen. Egypt and Syria invaded parts of Israel, starting the Yom Kippur War of 1973. The United States came to the aid of Israel, and the Soviet Union aided Egypt shortly after, as predicted in the Shell Scenario. In retaliation for further US aid to Israel, Saudi Arabia declared a trade embargo against the United States, shutting off all oil exports to the US. Shortly after, other oil producers on the Arabian Peninsula stopped exporting to not only the US, but also other countries supporting Israel, including Holland and the United Kingdom.

The 1973 Yom Kippur War and the resultant Energy Crisis caught the oil producers flatfooted, except for Royal Dutch Shell. As the events unfolded, Shell shifted supply points, making trades on commodity exchanges and committing to crude supplies ahead of the change in the market. Shell’s leadership was not caught off guard by the rapidly changing geo-political environment because they had imagined what could happen. Their effort created a vocabulary of terms to identify the changes, and a framework with which to understand the complex events as they unfolded with blinding speed. Shell did not have a defined plan of action for the Embargo, but they did have a context to use to make their plans moving forward.

Few companies create planning scenarios as comprehensive as those crafted by the Shell teams. Moreover, even if they even consider this kind of planning, few companies consider more than one scenario. While detractors may comment on the apparent success or lack of success of the scenario process, I tend to look to the ongoing presence of Shell Oil as a global energy company, and the way the company takes the long view of the deep investments it makes in developing energy for the global market. In my mind the issue is not whether they are right on any single issue, but how the company continues to thrive in the long run.

Shell continues to develop planning scenarios. The latest set introduces new lenses looking into a divided potential future, two different scenarios of what could happen. This scenario pair, Mountains and Oceans, focuses on overriding social climate paradoxes of politics, existing and new pathways that events may follow, and trends that influence the future. The long trend toward urbanization, as more than half the world's population migrates into urban areas in the next decade, is perhaps the largest influence that political leadership will ignore; 80 percent of the population will live in cities by the start of the 22st century.

This long view — not five years, not ten years, but 20, 50, or 100 years — is the hardest view to maintain, because the prevailing view is that we can’t do anything about these issues. Perhaps we can’t do anything … if we wait for others to do the work we should be doing. The few examples of companies investing in the long view, dedicating capital, time, and money to research in order to develop an understanding of the future, are doing so with faith that there will be some kind of return, either financial or social. Shell, Google, Sony, General Electric, Siemens, Honda, DHL, and IBM all invest in research and development that may not have a measurable return in what investment markets consider the long term — five years — but could shape how those companies shape the next century.

“What are we going to do to make sure we make it!”

Planning includes knowing what tactics we should deploy, and what tactics we can deploy. If strategy provides the why behind our planning, tactics are the what we do in our planning.

In any operation, we are in full control of our tactical options. Again, our defined outcome helps shape the tactics we choose in our planning. However, our tactical capabilities — i.e., our ability to perform — shape our planning. Do we know how to perform the job? Do we have the tools? What do we need to do to get the skills, knowledge, or tools that we must have to do the job? These questions are all critical to the planning process.

Mr. Murphy

“Mr. Murphy maintains a shack on site. Our job is to try to keep him in his shack. But when he does walk the site, you'd better be ready with Plan B.”

This is a line that I use whenever I am staring a project, and often while the project is in progress. When I serve as a program manager, I send every project manager in the program a poster about Mr. Murphy.

Murphy, as in Murphy’s Laws, constantly creates mischief. Protecting against the constant reality of Murphy’s Law is a tactical exercise. You can’t stop Murphy, but you can plan for what he does. No matter the scope or scale of the project, I look hard to identify all the places where Murphy can create havoc, determine the damage that could happen, what I can do to prevent it, and what to do if we can’t stop him. The larger the project, the broader the scope, the more things can and will go wrong.

Murphy is not only walking our projects. He walks our offices, factories, and warehouses. Murphy is in our employees' homes, our suppliers' operations, and our logistics partners' trucks, ships, and aircraft. Going after Murphy is just the first step — the tactical step. Murphy appears in the little things — late deliveries, miss-measured lines, labor not showing up, or a bad batch of materials. Avoiding little hitches in the plan like these requires tactical moves, things like phone calls, reminder messages, and alternative labor sources.

Are you Planning?

Organization leaders want to think that they are planning their futures. Those same leaders believe that their teams plan their work. And while everybody thinks they are planning their work, in most cases they engage in list making, not planning. Lists are a small and necessary part of the planning process, but lists are not planning.

As a leader, (and we all are leaders in some way), are you actually planning, or just making a list? Are you defining the desired outcome, or depending on assumed jargon? Are you thinking of how your plans fit into the greater future picture, or are you just focused on the next few hours?

Is it the “Five P’s”? Or is it really Seven P’s?

I walked into a conference room to prepare for a meeting. In a few minutes, eight client employees, representing eight different functions, would walk in for a meeting. They really did not know the agenda; they only knew that the CEO wanted all of them to sit in on my meeting with the systems consultant, in which the systems consultant would explain to me what the new accounting system was going to do.

That was unimportant. I did not need to know what the system was going to do. The eight people due to arrive needed answers to more fundamental questions about their role — that is, about how the new systems would change how they worked. They needed to learn enough to dispel their fear and doubt, because the boss needed them to trust that he knew what he was doing.

Getting the fears of eight different people out on the table was much more important than my education about an accounting system.

Why People Change

Years ago I learned about the Five “Ps” of Retail:

  • Product
  • Price
  • Placement
  • Promotion
  • People

The notion of the “Five Ps” is that with the right product at the right price, placed where the customer can see it, with the right benefits promoted by properly trained and motivated people,
the retail machine generates profit. It is a simple system to understand, but it can be devilish to implement. While it is a retail system, it works as a foundation for any sales-related business.

My first encounter with the Five Ps was in the mid1980s, when I started in retail at Payless Cashways. As I understood it, Harlan Seats, a retired company manager who had been instrumental in the formation of Payless Cashways, preached the virtues of the Five Ps. I don’t know whether Harlan created the Five Ps or if it was an idea he found along the way and championed. I do know that many retail executives operate under the Five Ps principle, and many of them learned the concept from Payless Cashways management alumni.

While I understand and respect the Five Ps, I think that Five are insufficient. I think that two Ps are missing, and I think the rest are in the wrong order. My desire to modify this structure comes from years of experience and observation of what worked and did not work in many other enterprises and organizations. Some of my changes reflect how the market has changed in the past three decades, and how much more important service is in business today.

Please, allow me to introduce the Seven “Ps”:

  • People
  • Process
  • Priority
  • Product
  • Placement
  • Promotion
  • Profit

People: Today, everything starts with people. The product or service is less important, because the people in the enterprise are the core. This really should not be a surprise, and the idea that success starts with the people is not new — Peter Drucker talked about the importance of the people (in his words, the men) who make up the fiber of the enterprise. Without the right people in your business, properly motivated, properly trained, with clear vision of what the future of the company is and how they fit into that future, your business ends up in purgatory.

Process: One of the cursed benefits of technology is that business moves at the speed of light. Let’s rephrase that; the transfer of communications moves at the speed of light. Not only does communication move faster; it moves more cheaply too, so we are awash in communications. To move business accurately, effectively and quickly, we have to follow consistent processes to deliver value to the customer every time. Without the right processes, designed to work together in an integrated system, your business ends up in purgatory.

Priority: Getting to where you and the team are clear about First Things First. Setting the priorities for the People and the Processes is so important that I'm tempted to place Priority at the top of this list — which I would do, except that without the People and the Process, there is nothing to prioritize. Setting priorities for your people to work on — the order of events in the processes — is vital, and should happen before you fall in love with your product or service. The Right Team of People, with the right Processes and Priorities, can create any product and service. Without getting your priorities straight, taking the right steps, in the right order, at the right time, your business ends up in purgatory.

Product: Today, there are many ways for a consumer to buy a product. Today the Service is just as important as the product. Increasingly, Service is the Difference. Without the right product and service, designed to satisfy the needs of the market, designed to generate more value than any other alternative, your business ends up in purgatory.

Placement: The customer has to find your product when they go shopping for it. Placement in the physical store is important. Placement on a web site where the customers can find it and buy it is just as important. Without the right placement of your product and service in the marketplace, clearly demonstrating superior value, your business ends up in purgatory.

Promotion: You must get people to come look at the product or try your service. Without the right promotion, promotion that draws the attention of the market to your solution, your business ends up in purgatory.

Purgatory is not death. It is just a stagnant place. A business that lands in purgatory doesn't die. Not quite. It's more like a zombie, undead, strolling in that nether region between heaven and hell. There is some profit, but not enough to help the company grow.

Business purgatory is a horrible place. It's kind of crowded — many companies inhabit that real estate. Businesses that fail to grow from small to medium, whose owners failed to understand and implement the Seven Ps, end up in purgatory.

Purgatory is not a permanent place. Companies can emerge from purgatory, but only with a complete change in management, different leadership, and sometimes with all new people and processes.

Back in the Conference Room

The eight people due to arrive needed answers to fundamental questions about their roles, and how the new systems would change how they worked. They needed to know how they could contribute to the success of the company. They needed to know how this new accounting system would empower them to contribute.

They needed to learn enough to dispel a their fear and doubt, to assure them that the boss really did know what he was doing. Getting the fears of eight different people out on the table was what we had to do in order to avoid purgatory.

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