What Is Planning In Management and Why Is It Important?
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Planning is the process of setting goals and creating steps you can follow to achieve those goals. Doing so helps guide you and makes it more likely that you reach success, which can be especially helpful if you're part of a company's management team. This means learning how to plan efficiently can help you achieve your management goals. In this article, we explain what planning in management is, offer steps you can follow to create a strategic plan, and discuss why planning is important.
What is planning in management?
Planning in management is when a company's leadership team creates goals and outlines the steps they may follow to reach those goals. The planning process may involve analyzing the company's resources and finances, researching market trends, or conducting risk analyses. Companies may create a detailed action plan, including milestones and deadlines they can adhere to in order to reach their goals. They may also anticipate potential challenges and develop solutions to minimize or eliminate these issues if they occur.
There are two common types of planning, which are formal and informal. Informal planning typically involves meeting to discuss short-term goals employees can work towards during the following weeks. Different teams or departments may meet informally to discuss their upcoming goals. Formal planning typically involves the management team discussing and writing specific short-term and long-term goals employees can consistently work towards.
How to plan effectively in management
If you want to create a strategic action plan for you and your team, here are the steps you can follow to do so:
1. Establish the company's goals
To create an action plan, first assess the company's goals to determine what you're working towards. You can establish a mix of short-term and long-term goals. For example, a long-term goal may be to increase the company's profits by 24% by the end of the year, so a short-term goal that can help you achieve that is raising profits by 2% each month.
2. Identify resources you may need
Once you know what goals you want to achieve, identify the resources you may need to start your action plan. You may need physical resources, such as equipment or supplies, or human resources, such as full-time or part-time employees. Identifying and collecting your resources ahead of time can help you and your team focus on your tasks to achieve your goals.
3. Create goal-related tasks
Determine what tasks employees can complete to reach the short-term and long-term goals you set. Prioritize each task by importance so employees know which tasks to complete first. For example, if your long-term goal is to onboard 500 new customers by the end of the quarter, a short-term goal you can complete first may be to hire additional customer service employees.
4. Assign tasks and timelines
Once you know what tasks employees can complete, assign them to individual employees who may excel at their assignments. For example, if one task is to cold call potential customers to increase profit, assign it to employees with excellent interpersonal and communication skills. Set realistic timelines to complete these assignments to motivate your team to work hard and manage their time appropriately.
5. Establish evaluation methods
To ensure your action plan is effective, create an evaluation method to assess your team's progress. For example, you may hold a weekly progress meeting to receive updates from your team members and ensure they're adhering to their timeline. Regularly assessing your team's progress can help you adjust the action plan or goals when necessary.
6. Develop a contingency plan
During the planning process, discuss any challenges you think your team may face when working towards their goals. This can help you create a contingency plan that minimizes or eliminates these challenges. Anticipating these challenges, even if they don't occur, can help minimize stress and ensure everyone is prepared.
Why is planning in management important?
There are plenty of benefits of planning, especially among the management team, such as the following:
Allows you to set informed goals
One of the main benefits of planning is that it allows you and your team to set informed goals. To decide what your goals are, you may conduct thorough research of the market and company's current standing to determine what strengths you can maintain and what weaknesses you can improve.
When setting your goals, try using the SMART methodology. SMART is an acronym that stands for specific, measurable, achievable, relevant, and time-based. Ensure each goal you create includes these five elements to help you create goals you and your team are likely to achieve, motivating you to keep working towards your future objectives.
When employees aren't sure what they're working towards, they may struggle to complete their tasks or motivate themselves. Creating goals and an action plan they can follow reduces this uncertainty and helps them prioritize their tasks accordingly to achieve these goals. Planning can also help companies reduce uncertainty by creating action plans for potential challenges the business may face. For example, a company may create a contingency plan to handle environmental or economic challenges. This can reduce the risks these challenges may cause and prepare everyone ahead of time to handle these challenges, reducing stress.
Management teams can assess their current resources and determine what resources the company may need in the future to reduce waste. For example, if a manufacturing company used 1000 batteries last month and plans to create the same output the following month, the management team can order 1000 batteries again. This also helps reduce wasted time as the management team can work with their team members to create informed schedules that ensures everyone has a balanced workload and can use their time efficiently.
When meeting with the management team or other employees, you can brainstorm new goals, potential challenges, and creative solutions. This can promote innovation and prompt independent thinking. Employees may be able to identify opportunities for business development, such as new target markets, products, or services.
Improves decision making
Planning can help managers improve their decision making skills. It allows them to focus on a goal and create different courses of action that can help their team achieve this goal. It can also help them make informed decisions about what activities their team can prioritize.
When employees understand why their work is relevant to the company's success, it may motivate them to work towards their goals. Having an action plan they can follow can help guide them and keep them engaged with their work. Similarly, having a timeline and deadline to adhere to can be motivational.
Helps businesses grow
One of the main benefits of planning in management is helping the business grow. Managers can create business development goals, such as increasing sales, onboarding new clients, or reducing expenses. Regularly creating goals and action plans can help businesses enjoy consistent growth.
Earns the trust of stakeholders
Stakeholders are individuals or groups who are interested in a company's actions because they're impacted by them. There are six common types of stakeholders, including customers, investors, employees, the community, suppliers, and the government. These stakeholders typically want the company to succeed, and they may be more likely to trust a business with informed goals and action plans.
Provides a competitive edge
Companies that conduct market research to create informed action plans may be able to create a competitive edge. It allows them to assess competing companies' strengths and weaknesses to brainstorm ways to take advantage of their vulnerabilities. For example, if a make-up company notices their competitor doesn't offer foundation in darker tones, the company may decide to offer the product themselves and appeal to that target audience to onboard new customers.
Explore more articles
- 12 Network Architect Certifications for IT Professionals
- What Are Work Commitments? (How to Improve and Benefits)
- What Is Infrastructure and Why Is It Important? (With Types)
- Quantitative Data Definition, Types, and Methods (With FAQs)
- Guide to Marketing Materials (With Types and Benefits)
- Demographics Examples (Types, Importance, and Uses)
- 12 Skills of a Doctor (And How to Improve and Use Them)
- What Is Requirements Analysis? (With Processes and Techniques)
- What Is a Click-Through Rate? (With a How-to Guide)
- Positivity in Leadership: 33 Traits for Leaders at Work
- What Is Business Continuity Management? (With Tips)
- Brand Equity vs. Brand Value: A Comprehensive Guide