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Importance of strategic planning at an individual level in times of recession


Strategic Planning at an individual level will relate to what pro-actions that we take at any stage of our lives. It will also mean a keen understanding of today's challenges and the imperatives thereof. This article is an attempt at discussing certain aspects of Strategic Planning at an individual level, given the challenges for the next thirty-six months.

Introduction

Picture this situation. You have just been admitted to the prestigious PGDM course at the ziIMA. However, your father who had come up through the ranks, and is now a Stores Officer with a leading cement company, is forced to take the Voluntary Retirement Service (VRS) option by the Management, which is keen on reducing cost. It will take a full 24 months for you to be able to support your family in any way.

What should be Strategic Planning, that you as a student, should do, given current realities. Yes, your research should center around what is the best career option, given today' s recession and the bad economic situation in the country. Your family situation would soon become a bit difficult, but your school teacher mother chips in. She advises you to just concentrate on her studies. She would manage the family and do her own planning. That would be her " Strategic Plan" as well.

Be that as it may, Strategy itself is a series of planned actions that we take in the form of several activities, all designed to achieve some specific goal at some point in time. In the aforesaid example, the goal for you, the PGDM student, would be to find out a good career, that, given the realities of today, will be, relatively recession-proof, though sales may temporarily come down. One of such superb start-up businesses that are doing very well, are all in the booming Supply Chain Management (SCM) industry. Irrespective of whatever happens to the manufacturing sector, or the service sector, goods and services still need to be transported. Exports will still go on, meaning a massive movement towards all India ports. Massive movements of all fruits and vegetables, even today, do take place. All this is waiting to be integrated through the most advanced information technology, and it is here that the start-ups are doing good business. Hence, you, as a budding MBA from the country's premier B school, need to be focussed on the short-term objective of making a good career with a good SCM organization, after you have chosen Marketing and Finance as your dual specializations. Of course, you could also do some electives in operations management.

In this article, the scope of Strategic Planning at an individual level, will be focussed on a) Choosing the best possible alternative and working towards it b) Multi-skilling to take on the challenges in a recessionary environment c) Managing personal finances d) Securing buy-in from the family and e) Looking ahead for the future.

Choosing the best possible alternative and working towards it

The young man in the aforesaid example, is a distant relative of mine. He is deeply worried about family resources. The father is even toying with the idea of selling his own house in Bangalore. Yet, the relatives have counseled him to take it cool. He has now secured a stores officer position in a large warehouse of a wholesale distributor of consumer products. Though the salary is not so good, he has opted for this job. His wife, the school teacher, also takes tuitions at home to supplement income. This is exactly what should be done. Any Strategic Plan of the family should also be factored around finding out various alternatives. Once the family members are clear about the alternatives, the picture will become clear as well. The serious actions have to necessarily follow. The son has been merely advised to concentrate on his studies.

Multi-skilling to take on the challenges in a recessionary environment

Judging by what happened at CTS, Chennai, a smart Engineer put on this thinking cap. What are the Strategic Options, given the fact that the environment is very bad? Before he could possibly lose his job as well, the Engineer enrolled for a course in Business Analytics. He got a job with another smaller organization. However, as explained to this author, the young man now feels secure and is confident of working his way up. He is 25 now, and his parents have been told firmly to put off his wedding plans for three years.

Tough times demand tough steps as well. Many bankers are now quietly doing the SAP Finance course in some private institute or the other. Two of such guys hope to get into the Core Banking Solutions Division of some bank, as the present state of mergers of public sector banks, they really hope, will offer them enough scope to survive with such skills. Every young man or woman has to necessarily re-skill and also multi-skill themselves. This will be part of their "Strategic Plan".

Managing personal finances

The Engineer who has quit CTS in the aforesaid example, has shifted to a Chennai suburb. He has joined with two other friends, working in the manufacturing sector. In these recessionary times, luxuries such as Swiggy food are best avoided. This is exactly what the three young men have done. Motor cycle petrol expenses are now bare minimum. They go around with the Rs.1000 bus passes. They cook their food themselves, and depend on Youtube for all recipes!! One of their mothers comes once in a while from Tindivanum (a small town, 120 kilometers from Chennai) and helps them too. Their Strategic Plans are heavily focused on reducing costs. The savings are quickly pumped into recurring deposits. This is exactly what should be done.

Securing buy-in from the family

Strategic Plans in a recession, need a lot of buy-in from the family. Not everyone is as lucky as the Stores officer, whose understanding School Teacher wife is quick to react and take on the challenge by taking tuitions. There will be cases where either wives or husbands do not understand the gravity of the situation. The bankers, for example, who are insulated from the real recession, tend to think that they can spend if there is no tomorrow. Wiser counsel has to prevail even in such families. The buy-in is important to cut down costs.

Every single Strategic Plan should have the cost-cutting focus, and this is extremely important. If for example, non-vegetarian food is cut and is down to just once a month, the savings can run into at least rupees one thousand per month. The family members need a lot more communication and the action plans should be laid out.

Looking ahead for the future

The last couple of years has been tough for the NRIs in the USA. Each one of them who does not have a green card are afraid what will happen next. No one is sure.

A couple of young engineers, one of whom is personally known to this author, decided enough was enough. They had saved quite a bit and invested their savings in agriculture. With the help of experts in drip irrigation, the two young men have taken up entire farms on lease on some fifty acres, about 160km from Chennai. The deal is simple. The sharing of profits takes place on a fifty-fifty basis and the entire lot is sold in some areas, like in Chengelpet gated communities in Chennai, to IT professionals in Chennai (direct delivery to homes) and so on. This is a booming business and the guys are happy. The farmers, who had limited resources, are happy too. Their earnings are nowhere near what they would have earned in the USA. Yet, they are happy.

This is exactly the kind of Strategic Plans that are required to be put in place, everywhere. The real challenges are in identifying opportunities. Strategic Plans, like the ones mentioned above, are a must in the times to come. Not a single person can relax. Young or old. For example, for those who aspire to become teachers, a doctorate degree is a must. Every single Strategic Plan should have safeguards against inflation and the real recessionary times. The present recession is expected to last three years and it is high time we all learn the art of managing today and the challenging times of tomorrow. Strategic Plans need to factor in the different variables in any given situation. The two wise men, for example, have a firm plan of selling their products within a small radius and do not compete with the wholesale merchants in the heart of the city. Tambaram, with hundreds of gated communities, is just enough for them to market their entire produce.

Conclusion

Tough times call for good Strategic Plans at the individual level. The plans should be structured to earn more money and reduce expenses. Through well known real-world examples, certain aspects of Strategic Plans, have been described above in some detail.


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