What is the planning cycle?

The planning cycle enables organizations to perform activities successfully and achieve goals across projects of various sizes. The planning cycle is most effective for small to medium-sized projects.

Component	Description
Definition	The Planning Cycle is a strategic management process that organizations use to set goals, create action plans, implement strategies, monitor progress, and make adjustments to achieve their objectives effectively. It involves a series of structured steps for systematic planning and execution.
Key Elements	– Setting Objectives: Identifying specific, measurable, achievable, relevant, and time-bound (SMART) goals. – Environmental Analysis: Evaluating internal and external factors that may affect goal attainment. – Strategic Planning: Developing strategies and action plans to achieve objectives. – Implementation: Executing the action plans and monitoring progress. – Evaluation and Adjustment: Continuously assessing performance and making necessary adjustments to plans.
How It Works	– Setting Objectives: Define clear and measurable goals that align with the organization’s mission and vision. – Environmental Analysis: Analyze internal strengths and weaknesses and external opportunities and threats (SWOT analysis). – Strategic Planning: Develop detailed strategies, allocate resources, and create action plans. – Implementation: Execute plans, assign responsibilities, and track progress. – Evaluation and Adjustment: Regularly assess performance, compare outcomes to goals, and make adjustments as needed.
Process Breakdown	1. Initiation: Identifying the need for planning and gathering relevant information. 2. Goal Setting: Defining specific, achievable objectives. 3. Environmental Analysis: Assessing internal and external factors. 4. Strategic Planning: Formulating strategies and tactics. 5. Implementation: Executing action plans. 6. Monitoring and Control: Tracking progress and performance. 7. Evaluation: Assessing results against objectives. 8. Adjustment: Making changes based on evaluation findings.
Benefits	– Improved goal alignment and focus on key priorities. – Enhanced organizational performance and efficiency. – Better resource allocation and risk management. – Agility to adapt to changing circumstances. – Increased accountability and transparency. – Informed decision-making and a structured approach to problem-solving.
Drawbacks	– Time-consuming process, especially for complex planning cycles. – Potential resistance to change from stakeholders. – Overemphasis on planning may lead to inflexibility. – External factors beyond control may disrupt plans. – Requires ongoing commitment and resources.
Applications	– Business and Strategic Planning: Used by businesses to set corporate strategies and operational plans. – Project Management: Employed in project planning and execution. – Public Policy Development: Used by governments to formulate policies and programs. – Education: Applied in curriculum development and educational planning.
Use Cases	– A technology company using the Planning Cycle to set annual product development goals, allocate resources, and track project progress. – A city government employing the cycle to plan infrastructure improvements, assess community needs, and allocate budgets. – An educational institution using it to develop a curriculum, set learning objectives, and evaluate teaching effectiveness.
Examples	– A retail company employing the Planning Cycle to expand into new markets, including setting sales targets, analyzing market trends, and adjusting pricing strategies. – A healthcare organization using it to plan patient care improvements, define performance metrics, and continuously monitor healthcare outcomes. – A non-profit organization applying it to develop fundraising strategies, allocate resources, and assess the impact of social programs.

Table of Contents

Understanding the planning cycle

The planning cycle enables organizations to plan and then implement robust, practical, cost-effective, and well-considered projects.

The planning and implementation process is iterative in the sense that insights are fed back into the cycle to be incorporated into future projects.

Alternatively, project managers may move back to an earlier stage of the cycle.

Whatever the case, project planning is a cycle within a cycle (like other management functions) since objectives are modified or new ones are created as new information comes to hand.

The planning cycle is most effective for small to medium-sized projects.

For larger, complex projects where project management becomes a technical discipline in its own right, certified frameworks such as PMBOK or PRINCE2 can be used.

The components of a planning cycle

Let’s now describe the various components of the planning cycle. Remember that the process is not linear.

At any point, the organization may choose to revisit an earlier step with new information or restart the process.

1 – Define objectives

Defining objectives is the most crucial part of the planning cycle.

While mission and vision statements provide some degree of clarity on where the company is headed, the planning cycle requires teams to develop specific goals using the SMART framework.

smart-goals — A SMART goal is any goal with a carefully planned, concise, and trackable objective. To be such a goal needs to be specific, measurable, achievable, relevant, and time-based. Bringing structure and trackability to goal setting increases the chances goals will be achieved, and it helps align the organization around those goals.

2 – Develop premises

Premises are assumptions the team makes about how the project may be impacted in the future by different conditions.

These may be external (competitors, laws, innovation) or internal (management, employee training outcomes, or available budget), for example.

The SWOT analysis can be used to examine the organization’s current position and how it may be able to respond in various situations.

Whatever method is chosen, however, premises must be defined early so that managers can monitor conditions during project implementation. If assumptions prove incorrect, the plan may need to be revised.

3 – Evaluate alternatives

In business as in life, there is more than one way to achieve the same outcome.

A company wanting to reduce office-related expenditure by 8% could move to smaller premises, enable more employees to work remotely, or find a cheaper source of toner ink.

Project managers need to evaluate each alternative in terms of its implementation difficulty and chances of success.

They should do this by seeking out diverse perspectives or expertise.

There are several methods for evaluating a plan. These include the cost/benefit analysis, force field analysis, and the six thinking hats brainstorming method.

4 – Identify resources

What are the resources required to implement the plan? Which of these resources does the organization possess, and which must be sourced from elsewhere?

Resources may encompass technology, money, equipment, raw materials, or skills.

For each alternative from the previous step, the availability and cost of resources must be identified.

5 – Establish tasks

Tasks comprise the roadmap that enables the organization to move toward a desired future state.

They must be defined at all organizational levels and, to illustrate task completion sequences and interdependencies, many teams choose to use a Gantt chart.

6 – Determine tracking and evaluation methods

Tracking means project managers constantly monitor progress toward the intended outcomes.

They should have a detailed understanding of critical tasks as well as those most likely to encounter problems or cause project bottlenecks.

In the final evaluation, the team looks back on what it has learned. Could any aspect of planning be improved or refined?

Developing a standard post-implementation review process may also be useful if similar projects are likely to be undertaken in the future.

Above all, the review should determine whether the project solved a key problem and if so, if its benefits could potentially be enhanced.

Key takeaways:

The planning cycle enables organizations to successfully perform activities and achieve goals across projects of various sizes.
The planning cycle is most effective for small to medium-sized projects. For larger, more complex projects, formal frameworks such as PMBOK or PRINCE2 may be more effective.
The planning cycle has six iterative steps where results from the evaluation stage can be fed back into similar future projects. These steps include defining objectives, developing premises, evaluating alternatives, identifying resources, establishing tasks, and determining tracking and evaluation methods.

Key Highlights

Planning Cycle Overview: The planning cycle is a process that allows organizations to plan and implement projects effectively, ensuring they are practical, cost-effective, and well-considered. It involves iterative stages that incorporate insights and can be revisited if needed.
Scope of Planning Cycle: The planning cycle is particularly effective for small to medium-sized projects. For larger and more complex projects, certified frameworks like PMBOK or PRINCE2 are often employed.
Components of Planning Cycle: The planning cycle consists of six iterative components:
1. Define Objectives: Clear and specific goals are set using the SMART framework, ensuring they are Specific, Measurable, Achievable, Relevant, and Time-based.
2. Develop Premises: Assumptions about future project impacts are defined, both external (competition, laws) and internal (management, budget).
3. Evaluate Alternatives: Different approaches to achieving goals are explored, considering feasibility, difficulty, and success probabilities. Methods like cost/benefit analysis and brainstorming are used.
4. Identify Resources: Necessary resources for plan implementation are identified, including technology, money, equipment, materials, and skills.
5. Establish Tasks: The roadmap of tasks to achieve the desired outcome is created, often visualized using tools like Gantt charts.
6. Determine Tracking and Evaluation Methods: Progress is constantly monitored, focusing on critical tasks and potential bottlenecks. A post-implementation review process may be established for improvement.
Iterative Nature: The planning cycle is iterative, with feedback from evaluation influencing future projects. The process is adaptable, allowing for changes based on new information.
Final Evaluation and Review: A final evaluation is conducted, reflecting on what was learned during the process. Opportunities for improvement are identified, and the project’s problem-solving effectiveness is assessed.

Frameworks, Models, or Concepts	Description	When to Apply
Strategic Planning	Strategic Planning is a systematic process of defining an organization’s direction and making decisions to allocate resources toward achieving its objectives. Strategic planning involves assessing internal and external environments, setting goals and priorities, and developing action plans to guide organizational activities. By engaging in strategic planning, organizations can align efforts, anticipate challenges, and capitalize on opportunities effectively.	Consider Strategic Planning when seeking to define your organization’s long-term vision, goals, and strategies. Use it to assess internal strengths and weaknesses, analyze external opportunities and threats, and develop strategic initiatives and action plans that align with organizational objectives effectively. Implement Strategic Planning as a framework for guiding decision-making, allocating resources, and achieving sustainable growth and competitive advantage within your organization.
Tactical Planning	Tactical Planning is a short-term planning process that translates strategic objectives into specific actions and initiatives to be implemented by various departments or teams within an organization. Tactical planning involves setting specific goals, defining tasks and responsibilities, and allocating resources to achieve desired outcomes within a defined timeframe. By engaging in tactical planning, organizations can operationalize strategic objectives, coordinate activities, and monitor progress effectively.	Consider Tactical Planning when seeking to implement strategic initiatives and achieve short-term objectives within your organization. Use it to translate strategic goals into actionable plans, define tasks and timelines, and allocate resources to support implementation effectively. Implement Tactical Planning as a framework for coordinating activities, monitoring progress, and ensuring alignment with strategic objectives and organizational priorities within your organization.
Operational Planning	Operational Planning is a detailed planning process that focuses on day-to-day activities and processes within an organization to ensure efficient and effective execution of tasks. Operational planning involves setting specific targets, establishing procedures and protocols, and allocating resources to support ongoing operations. By engaging in operational planning, organizations can optimize workflows, manage risks, and deliver products or services to customers reliably.	Consider Operational Planning when seeking to streamline workflows and improve efficiency within your organization. Use it to set specific targets, establish standard procedures and protocols, and allocate resources to support day-to-day operations effectively. Implement Operational Planning as a framework for optimizing processes, managing risks, and ensuring consistent delivery of products or services to customers within your organization.
Integrated Planning	Integrated Planning is an approach that combines strategic, tactical, and operational planning processes to ensure alignment and coherence across different levels of an organization. Integrated planning involves coordinating activities, sharing information, and leveraging synergies to achieve organizational goals holistically. By adopting integrated planning, organizations can enhance coordination, agility, and performance across departments and functions.	Consider Integrated Planning when seeking to align and coordinate planning efforts across different levels of your organization. Use it to integrate strategic, tactical, and operational planning processes, share information and resources, and leverage synergies to achieve organizational goals holistically. Implement Integrated Planning as a framework for fostering alignment, collaboration, and agility within your organization to achieve strategic objectives and drive sustainable growth effectively.
Performance Management	Performance Management is a continuous process of setting goals, monitoring progress, and providing feedback to improve individual, team, and organizational performance. Performance management involves defining performance metrics, measuring performance against targets, and identifying areas for improvement or development. By implementing performance management practices, organizations can align efforts, track progress, and drive accountability and results effectively.	Consider Performance Management when seeking to improve individual, team, or organizational performance within your organization. Use it to set clear goals and expectations, monitor progress against performance metrics, and provide regular feedback and coaching to support continuous improvement and development effectively. Implement Performance Management as a framework for driving accountability, engagement, and performance excellence within your organization to achieve strategic objectives and business success.
Scenario Planning	Scenario Planning is a strategic foresight technique that involves creating and analyzing alternative future scenarios to anticipate uncertainties and prepare for potential challenges or opportunities. Scenario planning helps organizations identify potential risks, explore alternative strategies, and develop contingency plans to mitigate or capitalize on future events. By engaging in scenario planning, organizations can enhance resilience, agility, and adaptability in the face of uncertainty.	Consider Scenario Planning when seeking to anticipate and prepare for future uncertainties within your organization. Use it to create and analyze alternative future scenarios, identify potential risks and opportunities, and develop strategic responses and contingency plans effectively. Implement Scenario Planning as a framework for enhancing organizational resilience, agility, and strategic foresight to navigate uncertainty and drive sustainable growth and competitiveness within your organization.
Budgeting Process	The Budgeting Process is a financial planning process that involves estimating future revenues and expenses, allocating resources, and setting financial targets for an organization. The budgeting process typically includes developing a budget proposal, reviewing and approving budgets, and monitoring actual performance against budgeted targets. By engaging in the budgeting process, organizations can optimize resource allocation, control costs, and achieve financial goals effectively.	Consider the Budgeting Process when seeking to allocate resources and set financial targets within your organization. Use it to estimate future revenues and expenses, develop a budget proposal, and monitor actual performance against budgeted targets effectively. Implement the Budgeting Process as a framework for optimizing resource allocation, controlling costs, and achieving financial objectives and business success within your organization.
Change Management	Change Management is a structured approach to managing organizational change effectively. Change management involves assessing change impacts, engaging stakeholders, and implementing strategies to minimize resistance and maximize adoption. By applying change management principles, organizations can navigate transitions, drive transformation, and achieve desired outcomes with minimal disruption.	Consider Change Management when seeking to implement organizational changes or initiatives within your organization. Use it to assess change impacts, engage stakeholders, and implement strategies to minimize resistance and maximize adoption effectively. Implement Change Management as a framework for guiding individuals and teams through transitions, driving transformation, and achieving desired outcomes with minimal disruption within your organization.
Strategic Risk Management	Strategic Risk Management is a process of identifying, assessing, and mitigating risks that may impact an organization’s ability to achieve its strategic objectives. Strategic risk management involves analyzing internal and external risks, prioritizing risks based on their impact and likelihood, and developing risk mitigation strategies. By adopting strategic risk management practices, organizations can anticipate threats, capitalize on opportunities, and protect value effectively.	Consider Strategic Risk Management when seeking to identify and mitigate risks that may impact strategic objectives within your organization. Use it to analyze internal and external risks, prioritize risks based on their impact and likelihood, and develop risk mitigation strategies effectively. Implement Strategic Risk Management as a framework for enhancing risk awareness, resilience, and value protection within your organization to achieve strategic objectives and drive sustainable growth effectively.
Continuous Improvement	Continuous Improvement is an ongoing effort to enhance processes, products, or services through incremental changes and innovations. Continuous improvement involves identifying opportunities for optimization, implementing improvements, and evaluating outcomes to drive ongoing enhancements. By fostering a culture of continuous improvement, organizations can increase efficiency, quality, and customer satisfaction over time.	Consider Continuous Improvement when seeking to optimize processes, products, or services within your organization. Use it to identify opportunities for optimization, implement improvements, and evaluate outcomes to drive ongoing enhancements effectively. Implement Continuous Improvement as a framework for fostering a culture of innovation, agility, and excellence within your organization to achieve continuous growth and improvement.