Planning has always been a foundational managerial skill. But in a service economy, leadership is needed to prevent the plan from being part of any project’s demise. In a manufacturing based economy, no one could ignore physics when making assumptions and building plans. But in a service based economy, cutting corners seems to have become a high art.
Manufacturers know that you cannot cheat natural science. If your yield is not profitable, you can ask hard questions about processes, tolerance, quality, pricing and plant equipment to look for answers and plan for change. But when the factory consists of people (rather than being run by them) the there is no natural law to prevent fudging. We see it every day when companies send 5% of a work force out the door but raise productivity goals by 5% without reducing workload. No one would even think about making a cut the raw goods provided to a factory by 5% and expect a 5% increase in yield without some enabling technology or change in process to account for it. But the assumption is that service work and the time that people need to do it are malleable. And with managers under severe pressure to show better and better performance, it is easy to see how a planning team can back into the assumptions needed to make an arbitrary goal seem achievable. Perhaps most damaging is that despite the long term damage that such a plan will do, the plan and the “tough minded” manager who advances it are normally lauded.
This is when it is up to leaders NOT to drink the kool-aid
Leaders are under great pressure to deliver in a very difficult time. So when the plan is presented, it is a matter of integrity for a leader to push back and ask hard questions. We see this often in terms of lowering the budget for a change or project or trimming scope of the plan. But how often does an organizational leader insist on planning rigor for a project that he or she really wants to get going? In his most recent book How the Mighty Fall, Jim Collins shows us that the roots of disaster are found not when things get hard, but in periods of high growth when hubris can allow an organization to assume that they are all but bullet-proof. I cannot count the number of times in my consulting days that I saw SVP’s in high growth companies take a project proposal, gut the budget, reduce the allotted time to complete and make no change in the expected outcome. It is true that the budgets and scope presented are often inflated. But when the cuts are arbitrary, you might just as well donate the money to charity. You get the same tax benefit, save a lot of productivity loss and business interruption, and the money can be used to have an impact.