PLANNING

1
 What Would You Do?
SpiceJet was stumbling from one crisis to another for the the three years 2012 -
15
Its losses mounted to Rs 1,003 crore in 2013/14
OTP stood at 72.1 per cent and 60.2 per cent, which was the lowest among
domestic carriers
Market share dropped every month, sliding from 20.9 per cent to 9.2 per cent
Mounting Debts, even lessors had plans to de register their aircrafts
What would you do?

2
Costs and Benefits
of Planning
Benefits of Planning

Planning Pitfalls

3
Benefits of Planning
Intensified Effort
Persistence
Direction
Creation of Task Strategies

4
Planning Pitfalls
Impede change and slow or prevent adaptation
Create a false sense of security
Detachment of planners

5
How to Make a
Plan That Works

Exhibit 4.1

6
Setting Goals
Specific
Measurable
Attainable
Realistic
Timely

7
Goal Commitment
The determination to achieve a goal.
Increased by:
Setting goals participatively
Making goals reasonable
Making goals public
Obtaining top management support

8
Developing an
Effective Action Plan
For accomplishing a goal an action plan lists:
Specific steps
People
Resources
Time period

9
Tracking Progress
First method
Set proximal (i.e., short-term) goals
Set distal (i.e., long-term or primary) goals

Second method
Gather and provide feedback
Make adjustments in effort, direction, and strategies

10
Maintaining Flexibility
Options-based planning
keep options open through simultaneous investment
invest more in promising options

Learning-based planning
plans need to be continually tested, changed and improved
encourages frequent reassessment and revision of goals

11
Planning From
Top to Bottom

Exhibit 4.3

12
Planning From
Top to Bottom

Exhibit 4.3

13
Starting at the Top
Vision
statement of a companys purpose
brief, inspirational, clear, and consistent with company beliefs and values

Mission
flows from the vision
specific, unifying goal that stretches and challenges the organization and has
a timeframe

14
Planning Timeframes

Exhibit 4.4

15
Setting Missions
Targeting
setting a clear, specific target

Common-enemy mission
vowing to defeat a corporate rival

Role-model mission
emulating a successful company

Internal-transformation mission
aiming to achieve dramatic change to remain competitive

16
Bending in the Middle
Tactical Plans
specify how a company will use resources, budgets, and
people to accomplish goals
Management by Objectives
develop and carry out tactical plans
four steps
discuss goals
participatively select goals
jointly develop tactical plans
meet to review performance

17
What Really Works
Management by Objectives (MBO)
Based on:
goals
participation
Feedback

Companies that use MBO are likely to outproduce companies that do

not use it!

18
Finishing at the Bottom
Operational plans
day-to-day plans
Single-use plans
deal with unique, one-time-only events
Standing plans
plans for recurring events
three types
Policies
Procedures
Rules and regulations

Budgets

19
Special-Purpose Plans

Planning for Change

Planning for
Contingencies
Planning for Product
Development

20
Planning for Change
Stretch goals
extremely ambitious goals that you dont know how to reach

Benchmarking
identifying outstanding practices, processes, and standards in other
companies
adapting them to your company

21
Planning for Contingencies:
Scenario Planning
Define the scope of the Using steps 1-4 create initial
scenario scenarios
Identify the major Check each scenario for
stakeholders consistency and plausibility
of facts
Identify environmental
trends Create contingency plans
from each scenario
Identify key uncertainties
and outcomes Develop measures to
indicate when scenario
events are occurring

22
Planning for Product
Development
Aggregate product plans:
used to manage and monitor all new products
indicate resources being used for each product
indicate products place in companys plans
help avoid having too many products in
development

23
 What Really Happened?
SpiceJet set specific goals
Focused on cost structure
Focused on building a network
Staff Rationalisation through which labour cost is reduced
Focused on its premium product - SpiceMAX - that mostly caters to corporate
travellers.

24