WHY BOTHER? 9
Why bother?
The central objective for driving a business is often thought to be maximising profits
(although this premise is often erroneous – see Chapter 6).
Yet maximising profit in the short run will probably kill the business in the longer
term, unless the profits are reinvested wisely in upgrading and replacing equipment,
machinery, human capital and intellectual property – all of which become worn out or
outmoded. To put it another way, there has to be adequate focus on product develop-
ment, longer-term marketing, training and recruitment, and fixed-asset replacement.
Moreover, there is a new set of problems confronting business, including the erosion of
national borders, deregulation, increasingly rapid communications, advancing technol-
ogy, and global flows of capital. You might be able to ignore them in the very short run.
But they will bite hard if they are neglected for too long.
By now, it should be clear that I do not subscribe to the dogma that says ‘the world is
changing so fast that my plans are immediately out of date, so there is no point in bother-
ing’. It is this rapid change that makes planning essential.
A plan usually reviews the current status of an organisation and sets out an
overall business strategy for say five years with a more detailed operational
and financial plan for one year ahead. The strategy and plan will cover all
areas of business. The most important issues vary from company to company, but in
general the key focus is on management, product, marketing and sales.
One major problem is that executives are overloaded with clamouring
demands to make daily or hourly decisions relating to operational and
administrative issues – what to do about this order, how to fix that machine
breakdown, who will cover for Juan while he is on vacation, how to resolve the
squabble between marketing and manufacturing, and so on.
The strategic decisions that are critical to the long-term health of the business
do not clamour. They lie quietly in the background trying not to be noticed. All
too often, when someone trips over them they pay back the neglect by taking
the business helter-skelter towards ruin. Executives are forced to take sometimes
expensive, corrective action to avert disaster. How often do you hear ‘if only we had
planned (planned sooner) for that’?
..................Content has been hidden....................
You can't read the all page of ebook, please click here login for view all page.