Current business planning methods are wrong.
They are totally out of touch with what organizations need to be successful.
And they need to be rejected and replaced with a planning process that recognizes the challenges organizations face in today’s environment of rapid change, unpredictability, uncertainty and ‘chaos’.
Here’s my quick rundown of the shortfalls of traditional business planning methods.
#1. Time — It takes too long to develop a business plan using standard pedagogical methods. Weeks can turn into months of analysis, modeling, risk assessment, strategy option comparisons and status reviews before the business planning process is concluded.
And as time passes by people lose interest in the outcome, and what began as an exciting task erodes into a laborious exercise.
#2. Cost — It’s an expensive process to deliver a business plan. At anywhere from $200 -$300 per hour it doesn’t take long to run up a $25,000 bill to have the business plan developed.
#3. Direction overload — Priority is given to getting the business plan direction ‘perfect’.
In fact most of the business plan development time is spent on defining the strategy direction exactly and precisely. Precision is given the utmost priority. Literally over 80% of the time spent is on getting the business plan direction EXACTLY RIGHT.
Analytics are used to attempt to squeeze perfection out of the plan.
#4. Execution MIA — With the overwhelming focus on business plan direction, little time is allocated to determining how the plan will be implemented.
The details of who does what by when are unfortunately not dealt with, leaving the plan “a brave idea” with no roadmap describing exactly how the intent of the plan will be achieved.
I’ve sat through planning sessions where so much time was spent on the WHAT, there was no time left for the HOW.
#5. Benchmarking — Under the guise of innovation, looking at ‘Best in Class’ organizations to determine what changes are needed overwhelms the direction setting process.
The amount of original thought and audacious creativity (https://www.bedifferentorbedead.com/blog/item/786) going into the business plan is meager at best.
Most organizations have an ongoing ‘love affair’ with benchmarking.
#6. Differentiation — There’s much talk about how to create a competitive advantage in the market, but it’s mostly smoke with no substance.
CLAPTRAP, ASPIRATIONS and NARCISSISM pervade this discussion. People declare they are ‘the best’ at this and ‘#1’ at that.
They all agree they are ‘market leaders’ with respect to some competence or skill that gives them the competitive edge that will vault their performance to astronomical heights.
In the end, the tough work of declaring what makes them truly unique among their competitors never gets done. The capabilities and competencies needed to “be the ONLY ones that they do” never gets addressed.
Reliance on the same-old textbook differential advantage rhetoric continues with no real change to their competitive position.
The objective of any business plan is to establish your organization as the ONLY one that does what you do.
#7. Leader fingerprints — Current business planning methodologies rely heavily on the opinions of consultants and other SME’s—Subject Matter Experts— either internal or external to the organization to guide the direction of the plan.
THEIR views, based on their alleged experience and expertise in developing high performing organizations, influence the strategic imperatives of the organization that results in the future allocation of investments.
Fingerprint leadership, in a nutshell, has a leader strategically micromanaging in their organization.
The truth is, in this business planning model, leaders review the opinions and recommendations of these SME’s and provide their approval on the strategic journey out to them, but rarely do they offer anything unique in terms of business strategy.
Their individual perspectives on strategy get little airtime because they’re not asked to plot the course of the organization from a blank sheet of paper.
The opportunity costs to the organization of giving too much power to the SME Influencers are significant. First, the business plan fails to capture and incorporate the experience and expertise of the leaders and second, leadership accountability is weakened.
With no direct skin in the game other than approving someone else’s proposal, a leader isn’t compelled to apply the same energy to implementing the plan as they would if they had more of an Influencer role.
strong<>#8. Textbooks and models — What SHOULD work in theory or academic pedagogy gets priority over what direction best fits the unique requirements of the particular organization the business plan involves.
The “Paper Plan” gets completed with virtually no frontline input. Models are used to predict expected demand from the plethora of assumptions made about customer take rates and competitive behavior.
Academia influences the direction and Doing doesn’t. If the results of the current strategy are falling short of expectations, the automatic assumption is that the STRATEGY—i.e. the plan direction—is wrong when in fact it might be an execution issue.
The landscape of business planning needs to change.
Business Planning should:
▪️Be relevant.
▪️Be engaging and fun.
▪️Engage the leadership team extensively, and draw on their knowledge and experience.
▪️Be reasonably quick to develop and not cost ‘an arm and a leg’.
▪️Focus more on execution.
▪️Establish leadership accountability.
▪️Be influenced more by the people in the trenches dealing with customers and competitors.
I created the Strategic Game Plan to address the frailties of traditional planning methods.
It guided us to take a startup to A BILLION IN SALES! and has helped many businesses achieve the growth and success their leaders never experienced before!