I stumbled across this interesting (and thought provoking) piece over the weekend. It argues that because things change rapidly, business planning is a waste of time, and is arguably dangerous. Having worked at many brand plans, customer plans, channel plans and business plans myself, the idea that the laborious and often painful task could be sidestepped is incredibly alluring. But my experience suggests otherwise. Whether you are a business leader, brand marketer, shopper marketer or customer manager the reality is that your business plan is really critical. So how should managers create and use plans which are valuable to the business?
Plan in collaboration
I was with a client the other day, kicking off a new project. As part of this process, I asked the brand managers to present their brand plans: partly to help me understand what was going on, and partly to ensure everyone in the project team was on the same page. What astounded me was that none of the sales team, none of the trade marketing team, had seen any of it. OK, the plan was new, but the implication was that these other functions had played no part in the inception of the plan. The starting point of any plan is an analysis of the situation, and one individual, team or department cannot have the multiple perspectives to be able to create a really good understanding of the situation. Whatever your plan (be it brand plan or customer plan or channel plan) – think of it in terms of total business planning, as your plan will impact the total business, and require action from the whole business to be effective.
Conduct your business planning over many months
Don’t try and create your business plan in one go. You will struggle to find the time in one block, so you run the risk of delaying and delaying. You’ll also find it hard to get the time and input from others required for an effective collaborative plan if you ask for three days of their time in one week. Business planning over many months allows proper research to support the plan, and allows your brain time to dwell and explore the full implications of what you are planning to do.
Clearly differentiate between objectives and strategies
The confusion between objectives and strategies seems sometimes to be reaching endemic proportions. Treating strategies as if they are objectives appears to be the biggest reason for a plan going off in the wrong direction. To be clear: objectives are results that must happen. Strategies are optional. If you don’t complete your strategies, but you hit your objectives, then you are on track.
Have as few objectives as possible
In this day and age things in the world seem to move faster and faster and therefore a flexible plan is highly desirable. Given that objectives are ‘must do’ then it stands to reason that as few as possible objectives is best as it increases the flexibility. Really challenge yourself and your team and keep the ‘must do’ list down to a minimum.
Create lots of strategies
Conversely, strategies are options. Creating as many options of how to deliver an objective is key. Selecting the most effective ones is important of course, but so is keeping track of all of the other options. When things change, or plans don’t work out, it is these options that become potential a plan B.
Review. Rewrite. Abandon.
Without a plan you have no idea if you are on track. But being on plan isn’t the point. Business plans are most valuable in that they tell you when you are NOT on plan. When you are not on plan, and you know it, a warning light flashes, and you can decide what you want to do about it. Change strategies, or change plans? Both are options, but only if you have a plan in the first place.
Every plan, every review, every amendment. If people don’t see that the plan is dynamic and responsive then they will do one of two things: follow the plan regardless or ignore it completely. Neither scenario is particularly rosy, so communication is the key. Part of the plan should be how, when, and to whom the plan will be communicated.
Running a business without business planning is nonsense
Let me finally rebuke Mr. Price’s assertion, by analyzing his key piece of evidence. Apparently 93% of successful companies abandoned their original plan. Hmmm. So. At least 93% of successful companies (whatever that means) must have had a plan in the first place (in order to be able to abandon it). The quote does not suggest that in abandoning their plans that these companies then proceeded without a plan. And therefore the only conclusion we can draw from this statement is that almost all successful companies had a plan (at least originally). They simply were smart enough to review the plan and adapt it: and where necessary abandon it and replace it with a different plan.
Plans are essential. They help you keep on track. They help you communicate with other parties and help them keep on track. In a complex world with more and more moving parts, with more and more decisions needing to be made quickly, it is imperative that people understand if their actions are aligned with everyone else or not. Treating a business plan like a straight-jacked is nuts, and always has been, but attempting to keep a business working together without a plan: well that appears to me to be just plain nonsense.
If you’d like to understand how your business planning could be more collaborative and more flexible, please contact me and I’ll tell you what I know!