Skip to main content

SETTING A DIRECTION VS PLANNING AND BUDGETING

Since the function of leadership is to produce change, setting the direction of that change is fundamental to leadership. Setting direction is never the same as planning or even long-term planning, although people often confuse the two. Planning is a management process, deductive in nature and designed to produce orderly results, not change. Setting a direction is more inductive. Leaders gather a broad range of data and look for patterns, relationships, and linkages that help explain things. What’s more, the direction-setting aspect of leadership does not produce plans; it creates vision and strategies. These describe a business, technology, or corporate culture in terms of what it should become over the long term and articulate a feasible way of achieving this goal. Most discussions of vision have a tendency to degenerate into the mystical. The implication is that a vision is something mysterious that mere mortals, even talented ones, could never hope to have. But developing good business direction isn’t magic. It is a tough, sometimes exhausting process of gathering and analyzing information. People who articulate such visions aren’t magicians but broad-based strategic thinkers who are willing to take risks. Nor do visions and strategies have to be brilliantly innovative; in fact, some of the best are not. Effective business visions regularly have an almost mundane quality, usually consisting of ideas that are already well known. The particular combination or patterning of the ideas may be new, but sometimes even that is not the case. For example, when CEO Jan Carlzon articulated his vision to make Scandinavian Airline Systems (SAS) the best airline in the world for the frequent business traveler, he was not saying anything that everyone in the airline industry didn’t already know. Business travelers fly more consistently than other market segments and are generally willing to pay higher fares. Thus focusing on business customers offers an airline the possibility of high margins, steady business, and considerable growth. But in an industry known more for bureaucracy than vision, no company had ever put these simple ideas together and dedicated itself to implementing them. SAS did, and it worked. What’s crucial about a vision is not its originality but how well it serves the interests of important constituencies’ customers, stockholders, employees and how easily it can be translated into a realistic competitive strategy. Bad visions tend to ignore the legitimate needs and rights of important constituencies favoring, say, employees over customers or stockholders. Or they are strategically unsound. When a company that has never been better than a weak competitor in an industry suddenly starts talking about becoming number one that is a pipe dream, not a vision. One of the most frequent mistakes that over managed and underled corporations make is to embrace “long-term planning” as a panacea for their lack of direction and inability to adapt to an increasingly competitive and dynamic business environment. But such an approach misinterprets the nature of direction setting and can never work. Long-term planning is always time consuming. Whenever something unexpected happens, plans have to be redone. In a dynamic business environment, the unexpected often becomes the norm, and long-term planning can become an extraordinarily burdensome activity. This is why most successful corporations limit the time frame of their planning activities. Indeed, some even consider “long-term planning” a contradiction in terms. In a company without direction, even short-term planning can become a black hole capable of absorbing an infinite amount of time and energy. With no vision and strategy to provide constraints around the planning process or to guide it, every eventuality deserves a plan. Under these circumstances, contingency planning can go on forever, draining time and attention from far more essential activities, yet without ever providing the clear sense of direction that a company desperately needs. After a while, managers inevitably become cynical about all this, and the planning process can degenerate into a highly politicized game. Planning works best not as a substitute for direction setting but as a complement to it. A competent planning process serves as a useful reality check on direction-setting activities. Likewise, a competent direction-setting process provides a focus in which planning can then be realistically carried out. It helps clarify what kind of planning is essential and what kind is irrelevant.

Comments

  1. Very informative and impressive post you have written, this is quite interesting and i have went through it completely, an upgraded information is shared, keep sharing such valuable information. Financial Goals for a Business

    ReplyDelete

Post a Comment

Popular posts from this blog

FUNCTIONS OF THE HOLY SPIRIT

Function of the Holy Spirit. This list of the 70 Functions of the Holy Spirit come from her research. He leads and directs. (Matthew 4:1; Mark 1:12; Luke 2:27; 4:1; Acts 8:29; Romans 8:14) The Holy Spirit speaks – in, to and through. (Matthew 10:20; Acts 1:16; 2:4; 13:2; 28:25; Hebrews 3:7) He gives power to cast out devils. (Matthew 12:28) He releases power. (Luke 4:14) The Holy Spirit anoints. (Luke 4:18; Acts 10:38) The Holy Spirit “comes upon” or “falls on”. (Matthew 3:16; Mark 1:10; Luke 2:25; 3:22; 4:18; John 1:32,33; Acts 10:44; 11:15) He baptizes and fills. (Matthew 3:11; Mark 1:8; Luke 1:15,41,67; 3:16, 4:1; John 1:33; Acts 1:4-5; 2:4; 4:8,31; 6:3,5; 7:55; 10:47; 11:24; 13:9,52; 1 Corinthians 12:12) He gives new birth. (John 3:5,8) He leads into worship. (John 4:23) He flows like a river from the spirit man. (John 7:38-39) He ministers truth. (John 14:17; 15:26; 16:13) He dwells in people. (John 14:

ON BUHARI, NEW YORK TMES WROTE

Four months after seizing power, Nigeria’s military leaders appear to be suffering an erosion of popular support. Last Dec. 31, Maj. Gen. Mohammed Buhari led a group of young officers in a coup against the civilian Government of President Shehu Shagari, saying the takeover was necessary to save Nigeria, Africa’s richest and most populous nation, from economic collapse. The military intervention appeared at the time to enjoy enthusiastic support from a broad range of Nigeria’s population. Many intellectuals argued that the corruption and incompetence of the Shagari administration had made drastic action both necessary and inevitable. Traders, merchants and people in the streets welcomed the soldiers and looked forward to a quick improvement in their standard of living. Growing Disappointment Recently, however, there seems to be growing disappointment with both the military Government’s approach and pace. Since coming to power, this Government has not found a sing