Michael Padilla-Pagan Pay
COVID-19 and Government and Economic Chaos, we are at war.
Let us face the fact that we are in a wartime period if you will, which brings the questions of how much information is utilized, why our governments are unable to plan, who is doing what, and who gets what money. So, then let us ask ourselves what part of our new normal will sustain into peacetime? Probably enough.
And so, even as organizations focus on the immediate business shocks, they need to plan for the postcrisis world. Companies, governments, and citizens all need to adapt to the situation, and manage life accordingly. In our business and security world, you are as good as the information you have, and then you plan and operate according to said information. In our profession, there are ways to respond to a disruption, for which there is a playbook.
However, to use the playbook and combat a disruption such as the Pandemic, you require Strategic, Tactical, and Operational planning forget ahead. In my interaction with different organizations and leaders, including security & risk managers, it is important that the planning team considers every possible scenario. Optimism bias can be a big problem in this planning stage
Strategic planning is an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. There is, of course, a large amount of uncertainty today, especially on the economic front, which makes it hard for business decision-makers to start taking action. A lot of information is floating around, depending on what you choose to pay attention to, you can be an optimist or a pessimist. By the time it becomes fully clear which of the several possible scenarios ends up being the reality, many strategic actions you could have taken while the scenarios were still emerging will be either not feasible or too expensive. Therefore, too late.
You have to make sure to remain flexible where you can be flexible, but you also have to make certain choices and commit to them in the face of uncertainty. So how do you balance that? This is not a muscle that many organizations have developed. So, you must start to act and think in relation to strategic planning which covers the whole business, rather than just an isolated unit, with at least one of the following three key questions:
·What do we do?
· For whom do we do it?
· How do we excel?
For example, the first and third questions are those that motivate an acquisition. Acquisitions are thus strategic choices. Typically, strategic choices look at 3 to 5 years, although some extend their vision to 20 years (long term). Because of the time horizon and the nature of the questions dealt, mishaps potentially occurring during the execution of a strategic plan are afflicted by significant uncertainties and may lie very remotely out of the control of management (war, geopolitical shocks, pandemics, etc.). Those mishaps, in conjunction with their potential consequences are called “strategic risks”. Untapped opportunities can also be seen as strategic risks, but in this post, we will not analyze those upward-risks aspects.
Tactical planning is short-range planning, emphasizing the current operations of various parts of the organization. Short Range is generally defined as a period of time extending about one year or less in the future. Managers use tactical planning to outline what the various parts of the organization must do for the organization to be successful at some point one year or less into the future. Tactical plans are usually developed in the areas of production, marketing, personnel, finance, and plant facilities. Because of time being on the horizon and the nature of the questions dealt, mishaps potentially occurring during the execution of a tactical plan should be covered by moderate uncertainties and may lie closer to the control of management (next year shipping prices, food prices, energy consumption, cost of health care, tax increases, employees, etc.) than strategic ones. Those mishaps, in conjunction with their potential consequences, are called “tactical risks”.
Operational planning is the process of linking strategic goals and objectives to tactical goals and objectives. It describes milestones, conditions for success and growth, and explains how, or what portion of, a strategic plan will be put into operation during a given operational period.
An operational plan addresses four questions:
· Where are we now?
· Where do we want to be?
· How do we get there?
· How do we measure our progress?
Operational risks are those arising from the people, systems, and processes through which a company operates and can include other classes of risk, such as fraud, legal risks, physical or environmental risks. Operational risks are those resulting from inadequate or failed internal processes, people, and systems, or from external events (man-made or natural hazards). A tailings dam failure, an open-pit slide, a black-out (man-made or natural external hazard), an explosion in a processing plant are all operational hazards generating operational risks.
Since upper Management generally have a better understanding of the organization, than lower-level managers do, upper Management generally develops strategic plans. Because lower-level managers generally have a better understanding of the day-to-day organizational operations, generally they develop tactical and operational plans. Because strategic plans are generally longer-term and are surrounded by more uncertainties in terms of their occurrence and consequences (one exception example: tailings management planned until closure, and after closure) strategic plans are generally less detailed than tactical plans. However, despite their differences, strategic, tactical, and operational planning, they are integrally related and the key to managing disruption and crisis, especially during a wartime period. Managers need both tactical and strategic planning programs, and these programs must be closely related to be successful.
For each of these, there is an approach to achieving an organization's goals at their respective strategic, tactical, and operational levels. Therefore, when an organization sets strategic, tactical, and operational goals, aligned with one another, it becomes easier and lays the groundwork for developing organizationally aligned plans, leading to the overall success of your ship during such challenging times.