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Participative long-range planning: planning by alignment.

Participative Long-Range Planning: Planning By Alignment

Planning By Alignment (PBA) is a process that combines the elements of management by objectives, teamwork and long-range thinking. It ensures the involvement and "alignment" of the total organization, providing a bottom-up and top-down communication link, rather than traditional top-down goal-setting. The PBA process attempts to focus the energies of the organization in order to accomplish key objectives and meet corporate goals. In developing long-range plans for a large line organization of Carolina Power and Light, a mid-sized electric utility, PBA demonstrated the ability to bring together a geographically dispersed organization with varying cultures and operational characteristics.

In recognizing a need to manage the changing environment of fossil generation and the utility industry in general, the Fossil Operations department of Carolina Power & Light requested support in developing a long-range planning process to provide a focus on future challenges and opportunities. The planning process would have to complement the existing detailed business-plan-level planning (micro) and also support corporate strategic plans (macro). Figure 1 illustrates the overall planning process eventually developed, with emphasis on the role PBA played in linking the macro and micro planning efforts. This article will concentrate on the long-range planning module that represents the PBA process.

Understanding the major components -and their purposes-is critical to the success of PBA. The components are objectives/action plans, SWOTs (strengths, weaknesses, opportunities, and threats), mission, vision, and alignment. The two key supports holding up the PBA pyramid involve the critical elements of tracking and review. While the element of alignment does not directly produce any of the components of long-range planning, it does provide the force of synergistic thinking and early commitment to desired results.

* Alignment - Before any of the actual planning process is initiated, attention must be given to the critical aspects of teambuilding and focusing the energies and direction of the planning participants. Initially, alignment is concerned with involving as much insight and perspective from as many levels within the organization as possible. This is accomplished through team assignments to develop vision statements and identify strengths, weaknesses, opportunities, and threats. Later, the alignment process is centered around aligning the planning participants in focusing their energies throughout the PBA effort.

* Vision - Next, the vision statement identifies the beliefs, values, attitudes, and personality of the organization. Among the questions normally addressed in developing a vision statement are:

* Who are we?

* What terms should describe our organization's cultures?

* What are we striving for?

* How should we be perceived by our employees, customers, suppliers, competitors, and general public?

The purpose of having a vision statement is to promote the ownership and focusing of commitments to accomplishing identified goals and objectives in weaving the vision into day-to-day decision making.

* Mission - The mission of an organization identifies the business itself in terms of products or services and the customers it serves.

Questions normally asked in developing a mission statement include:

* What business are we in? What do our products or services actually provide?

* What business should we be in, both now and in the future?

* What customers do we serve, both now and in the future?

* Do we want to grow? If so, how much?

* What share of the market do we want?

The value of a clear, concise mission statement is primarily the fact that it focuses ideas and energies in one direction. The mission provides a boundary that concentrates the organization's energies.

Strengths, Weaknesses, Opportunities, and Threats - The SWOTS analysis makes it easier to identify both the internal and external factors that influence and shape current activities. The first two areas, strengths and weaknesses, are normally focused on the internal environment of the organization. The last two, opportunities and threats, are more externally focused and deal with factors often beyond the control of the organization.

The value of the SWOTS analysis is that it ensures that the planning cycle does not represent a myopic update of previous plans. The process of developing the SWOTS forces organizations to expand their paradigm and identify threats and opportunities that lay ahead. It also allows broad participation by many different areas of the organization. Once the SWOTS analysis is completed with consolidation and prioritization of critical issues, we move into the fourth element of PBA.

Objectives/Action Plans - Developing objectives is a natural flow from the previous steps in the process. The vision, mission, and SWOTS levels provide focused energies and identified challenges, opportunities, and contingencies. Now the task is to express organizational needs in terms of quantifiable, achievable objectives with specific timetables. The purpose of this component of PBA is to isolate those few top-priority issues and identify "objective champions" to take responsibility for ensuring their success.

Once the specific objectives are identified, then the "objective champions" must develop appropriate action plans and identify sources of funding. The plans are then reviewed by the peer management group. Here is where many planning processes break down. After going through a great deal of dust and noise in developing the long-range plans, they are often shelved until next year's planning retreat. Therefore, before the PBA process is considered complete, an effective approach for tracking and reviewing the accomplishment of objective action plans must be in place and agreed to by the planning participants.

The Fossil Operations department of CP&L represents approximately 55 percent of the company's total generating capacity. It is managed by eight plant managers and one administrative manager, all reporting to the department manager. Before installing the PBA planning process, the department had mainly concentrated its planning efforts on the business planning module shown in figure 1. One major weakness of this approach was that it tended to be oriented more toward the budget than toward long-range thinking. The planning was generally centered around individual plants. It didn't try to optimize the total organization. The department's management recognized the need to broaden its perspective and decided to implement the PBA planning process to provide a bridge between corporate strategic planning and the micro-level business planning.

The Fossil Operations management also required that the planning process must:

* Link with the Corporate Strategic Plan.

* Link all levels of Fossil Operations management and employees (provide focus).

* Ensure that creativity be measured, but not stifled.

* Provide a needed and wanted system to ensure commitment.

* Be flexible enough to be effective in the long term.

* Provide extraordinary results.

In addition to the "must" list, a "want" list was developed. We wanted the planning process to:

* Be fun, exciting, and provide personal growth.

* Be a paradigm breaker.

* Include outside perspectives.

* Secure as much customer buy-in up front as possible.

The overall PBA process customized for the Fossil Operations department is shown in figure 2. As depicted in the flow chart, the process centered around a three-day planning retreat involving key department decision-makers. To complete the process in three days, a lot of work had to be done before the retreat. This work was designed to ensure a wide range of involvement and initiate the "alignment" mental process.

Each fossil plant was asked to include its organization in conducting a SWOTS analysis both for the individual plant and the total department. Facilitators were provided to make sure there was consistency in the process and format of the results. Each plant was also asked to develop, as a group, what they thought the vision of the department should be.

The planning retreat was designed to provide an intense environment of fast-paced activities and involvement. The flow of the retreat was:

Day 1 - The first day primarily focused on building on the alignment and team-building aspects of PBA and gaining a common ground of direction, customer supplier perspectives and planning goals.

Day 2 - The second day began the actual workshop portion of the process and included:

* Developing a department vision statement, agreeing on what the mission of the department should be, and drafting a concise mission statement.

* Consolidating, prioritizing, and reviewing the results of the SWOTS analysis.

Day 3 - The third day of the retreat was spent developing key objectives and selecting the objective-champions. The objective-champion is responsible for coordinating and leading-in general, doing everything necessary to accomplish the key objective.

Subsequent meetings were held to review objective team approaches and implement the tracking and review process. The final results of the planning retreat were rated as being successful in accomplishing the planning goals and objectives, and they resulted in some concrete accomplishments.

* Teamwork and enhanced acceptance of change.

* Common commitment to a department vision statement and a focus of attitudes, beliefs, and energies.

* Commitment and buy-in for a department mission statement that defined the scope of department interest.

* The top priority breakthrough objective to be addressed during the coming year, with appropriate assumption of responsibilities and performance criteria.

* A planning process that will provide a basis and framework for all future long-range planning efforts.

* Involvement of both customers and suppliers in the Fossil Operations planning efforts.

The versatility of the PBA process has provided a successful framework of long-range planning that can be used in organizations of varying sizes. It has been used in companies of less than twenty employees, and in companies with more than 1,000 employees, and in diverse industry types and market environments.

While the overall approach to long-range planning used in the PBA process is not unique, its combination with Management by Objectives and continuous emphasis on management by alignment provides a different emphasis to the overall process and eventual results of long-range thinking.

PHOTO : Fossil Operations Department Business Planning Strategy-Figure 1 Customized PBA Process-Figure 2
COPYRIGHT 1989 Institute of Industrial Engineers, Inc. (IIE)
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Author:Gilreath, Art
Publication:Industrial Management
Date:Nov 1, 1989
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