Planning and Goals

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Planning and Goals

• Chapter 4

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B_N_H_A_K_N_

• D M T S U E
• C R G I M E
• L L B X E E
• U X U J M R

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What is Deltas Restructuring Plan?

• Delta has lost 10 billion since 2001
• Filed for Chapter 11 bankruptcy last September
  (2005)
  
• Plan
• Cut workforce by 17 (or 9000 jobs)
• Slash pay for remaining employees by asking for
  325 million in concessions from unionized pilots
  and imposing 605 million in wage and benefit
  cuts from mostly non-union workforce
• Compete by flying more direct routes in U.S. and
  overseas
  
• Shed pension obligations to PGBC
• Will assume that oil will cost 68 a barrel
• New moves should save 3 billion in annual costs
  and allow it to come out of bankruptcy in two
  years
  

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What is Deltas Restructuring Plan?

• Risks
• Steep challenges from discount airlines (e.g.,
  AirTran in Atlanta)
  
• What will happen to close-knit culture?
• Establish new business model hybrid between the
  old hub and spoke route system and the new
  point-to-point route system
  
• Shift from domestic to international routes

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Planning
Planning is choosing a goal and developing a
strategy to achieve that goal
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Which profile best describes your planning
tendencies?

• I cannot live without my to-do list and calendar
  to guide my work and accomplish goals
  
• I jot down a few issues and dates to focus my
  activities
  
• I go with the flow and avoid planning as it
  restricts my ability to perform effectively
  
• None of the above

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Benefits of Planning
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Pitfalls of Planning
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Pericles said Opportunities wait for no man.
What does this mean?

• Managers must plan quickly
• Only men need to think of opportunities
• Plans can be abandoned if circumstances require
  it
  
• Luck is more important than planning
• I dont understand what Pericles was talking about

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How to Make a Plan That Works
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Setting Goals
S.M.A.R.T.
Example Deltas goal of cutting its workforce
by 17 in two years
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Developing Commitment to Goals

• The determination to achieve a goal
• Increased by
• Setting goals through participation
• Making goals reasonable
• Making goals public
• Obtaining top management support

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Developing Effective Action Plans
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Tracking Progress
Setting
Gather and provide
Proximal Goals
Performance Feedback
Distal Goals
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Which of the following is a distal goal for
students in this course?

• Finishing Group Project 2 on time
• Getting all individual assignments done
• Taking the final exam
• Obtaining a good grade for the course

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Maintaining Flexibility

• Option-based planning
• keep options open through simultaneous
  investment
  
• invest more in promising options
• maintains slack resources
• Learning-based planning
• plans need to be continuously adjusted
• encourages flexibility, frequent reassessment,
  and revision of goals

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Kinds of Plans
Top Managers
Middle
First-Level Managers
Adapted from Exhibit 4.5
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Starting at the Top
An inspirational statement of anorganizations
enduring purpose (2 sentences)
Vision
Overall goal that unifies efforts towardits
vision. Tells us what the company
does (products/services) and who its
customers are
Mission
Clarify how the company will serve customers and
position itself against competitors (2-5 years)
Strategic Plans
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SJS provides high quality tiles and granite slab
stone to fabricators/contractors working in the
secondary home products (remodeling) market in
RI, CT and MA. This is a

• Vision
• Mission
• Strategic Plan
• Value Statement

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Bending in the Middle
Tactical Plans
Specify how a company will use resources,
budgets, and people toaccomplish goals within
its mission. (6 months to 2 years)
ManagementbyObjectives
Develop and carry out tactical plans

• Discuss possible goals
• Participatively select goals consistent with
  overall goals
  
• Jointly develop tactical plans
• Meet to review progress

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Finishing at the Bottom
Operational Plans
Day-to-day plans for producing or delivering
products and services overa 30-day to six-month
period
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Kinds of Operational Plans
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Planet Fast Pitch coaches follow a three-step
process when individually coaching softball
players. This type of plan is a

• Policy
• Procedure
• Single Use Plan
• Rule

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Planning for Change

• Stretch goals
• ambitious goals to achieveextraordinary
  improvements in company performance
  
• Benchmarking
• identify outstanding practices in other
  companies
  
• adapt them to your company

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Planning for Contingencies
Scenario Planning

• Define the scope of the scenario
• Identify the major stakeholders
• Identify environmental trends
• Identify key uncertainties and the likely
  outcomes
  
• Using Steps 1-4, put together initial scenarios
• Check for consistency and plausibility of facts
• Write the final scenarios and conduct planning
  sessions
  
• Develop measures for each scenario