Planning Cycle

The Planning Cycle

This page sets out the basic performance management cycle for managing performance in any business or organisation.

The four stages of the planning cycle are listed below.

1. Plan

Write your business plan

Good planning is at the heart of performance management. Without a business plan you will not know exactly where you are headed so it is unlikely you will know when you get there or whether you are on track or off track.

A business strategy is a long-term plan of action designed to achieve a particular goal. It should be accompanied by a shorter term and more detailed business plan that is revised as part of an annual business planning cycle.

If you are in business you have probably done quite a bit of thinking about your business strategy but if not check out our Business Planning page for tips on developing your business vision and plan.

2. Do

Implement your business plan

Research has shown that the ability to implement a business strategy or plan is a critical factor in business – it will often determine how successful a business is. As well as being backed by good planning and a written business plan, a business requires excellent leadership, sound business processes and good systems.

If the strategy and business plan is not going to get forgotten in the daily grind of just getting things done, you need to ensure that you have the right systems and processes to implement the plan. In developing your systems and processes consider what success will look like to you and your staff and how it will be measured. Then ensure you have in place:

• Simple and clear communications so that everyone knows what is expected of them and if they are on target.
• Written processes and instructions which are followed by all (training and checks will be needed).
• A few simple and clear measures or metrics by which to measure your performance – see Data to Monitor – that clearly link back to your strategy and business plan objectives and targets.

Examples of systems and processes that should be documented and regularly reviewed include:
- Quality systems (e.g ISO9001)
- Environmental management systems (e.g ISO14001)
- Data collection processes (real time not months later)
- Programme and project management methodology
- Financial systems and controls (e.g. cash flow, debtors and creditors)
- Customer complaints and returns management arrangements
- Data protection and privacy compliance processes
- Staff recruitment, management, appraisal and development processes
Instructions and guidance on the above systems and processes will flow from (or be part included in) your Staff Handbook.

3. Review

Check that you are on target

There is no point in having a plan and targets if you do not check regularly to see whether you are achieving your targets. Likewise there is no point in collecting monitoring data if you only look at it when it has become painfully obvious that you are off track.

Progress and outcomes needs to be reviewed and measured consistently and on a regular basis. Choose a timeframe that works for your business.

Some data may need weekly review while other systems and processes only need to be looked at once a year or even every two years. Decide what you need to look at, how often you need to look at it and who will look at it – then write down your review plan and follow it.

4. Revise

Change things that are not working

A favorite saying comes to mind: if you always do what you have always done you will always get what you have always got! If a review shows that you are not on target then now is probably a good time to do something about it.

The action might be to revise your plan or your budgets, or you may need to cut costs or increase marketing spend etc. etc. – if you are collecting good monitoring information you will have an indication of what is going wrong and therefore what needs to be changed.

Change is a fact of life in business so do not shy away from revising what you are doing or how you are doing it. Your revisions will take you back to planning and will feed into future plans – that is why performance management is viewed as a cyclical process.

The Performance Pyramid

Some people also view the structure for managing business performance as a pyramid.

At the top of the pyramid you have your business vision and mission.

Below these at level two you have your business objectives and goals and at level three your business strategy and plans.

In the middle at level four you have you management processes and systems and below this at level five the performance monitoring and review functions.

As with the cyclical view, performance monitoring and review feeds back into the top of the pyramid. What you learned from monitoring and reviewing your business should help you maintain your vision and improve your business-planning process and corporate business strategy.

Need help with improving your performance? Request a Free Business Review.