Monday, March 20, 2017

Systematic planning vs. intuition and ad hoc problem solving

Some people don’t write plans; all they have is a concept of a strategy in their head. Then they adapt the ‘plan’ to the situation. They are very flexible both the good and the bad senses, and they react to what happens instead of planning. Those people are usually very effective sellers, as they have no problem with promising a potential customer more than is possible. They can then give the order with their promises to someone else.

That third party is then obliged to fulfill the contract. If it is not possible to fulfill it, salesman can put the blame on the third party. That can be done repeatedly, over and over again. Can it be done forever? I believe it can’t. But if a salesman’s reputation gets so bad and his sales drop so much that it is not profitable for him to stay on the job, he can change industry and start again. In between, he might make a very nice profit for himself and the company he works for, so it can be a win-win situation to have this kind of employee.

We can’t say they are bad; they are simply different from the fulfilling person. The promise person and the fulfilling person are not compatible long term, usually, but they can live in symbiosis. Who is right and who is wrong? It is hard to say and as I already wrote – morality depends on the area and the habits around you.

In Europe and America (except for Mormons) it is considered the right thing to have only one partner be it wife or husband. In Arab countries it is normal and approved to have more wives. Arabs consider themselves moral with their set of values, and Europeans also consider themselves moral with their set of values. Both act moral from their point of view. Unfortunately many of those values are not compatible. But let’s get back to planning and ad hoc problem solving.

Too much planning can work against you. There is one problem connected to knowing too much, planning too much and thinking too much. It is called analytic paralysis. You think and plan too much, but you won’t convert those plans and ideas into actions. Without action, there will be no wealth. If you think you have a good plan, act upon it. Don’t wait until it becomes ‘The Perfect Plan.’

There are no perfect plans. It is good to be prepared, but you can’t prepare for everything that happens. It is better to act now, based on a good plan, and take corrective actions after the plan A crashes in contact with real world, than to act twenty years from now with ‘The Perfect Plan.’

A perfect plan is a myth which does not exist. Just like the perfect market does not exist. They are both models, which smart profesors at the universities use to simplify the real world economy. They are both academic models used for academic education. The situation WILL be different tomorrow, next month or next year, so there is great probability, that your perfect plan will be outdated the day you start realizing it.

If the plan works in principles and can deliver great results, you have enough buffers for that plan to get good results if there is something unexpected. And there WILL be something unexpected along the way. You can count on that. Planning is very important in my opinion, but you don’t need the complete manual for every possible situation when you are starting something. It is not possible to plan everything in advance.

Deals or promises from your partners which you included in your plans will be broken and you will have to adapt your plan according to the situation. Some people try to solve any problems which could come into existence, which may be right if you have nothing better to do. But if there is small probability that the problem will arise, are you willing to waste your time and resources on preparing for that problem?

Your time is limited and you have to focus on what is the most important, not on many insignificant problems, many of which will probably never happen. Would spending your week solving possible problems, which will cost your company 100 dollars, be better than spending your week taking advantage of opportunities, which could bring 1000 dollars in sales?

A good plan helps you keep your eyes on your goal and reach the goal in the minimum amount of time. Great goals can be split into smaller ones, and if you divide big tasks into smaller ones, you can achieve anything. Planning is important, but some people manage to get wealthy without any written plan. You have to understand what kind of person you are, what works for you and then use either
detailed plans or very vague plans. If you are not sure, try both approaches and measure what works better.

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