Tuesday, May 02, 2006

Continuous Decision-Oriented Planning

I was reading some statistics of companies and what I found was that companies with standard planning processes and practices make on an average 2.5 major strategic decisions (major means - impacting potential increase in profit by 10% or more). The planning approach is "Annual Review focussed on Business Units". However, if considered and compared with the amount of time companies and executives spend in planning and meeting, this number reflects a very slow decision making process.

A breakthrough model that is being adopted by many companies is “Continuous Decision-Oriented Planning”. This model is established on the premise of issue based decision making. The procecss goes like this- The company identifies the strategic priorities for the year, in an annual meeting and then, special task forces spread across the year to reach decisions on as many issues as possible. The entire decision making completes in two meetings - first around the facts of issues and alternative solutions and second on evaluation of the solutions and selection of the best course of action. Once an issue is resolved, a new is added. This also facilitates addition of new critical issues based on market demand and competition. The entire process is always proceeded by ample preparaion time. The diagramatic representation of the model is as shown below:

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