Actionable Business Planning
Business planning should not be just a theoretical exercise, something that is done once a year to produce a neatly bound business plan document that is quickly forgotten and packed away in a box. The intent is to make the business plan actionable, meaning it can be immediately implemented with the goal of growing the business and making it more profitable. The management team should refer to the plan throughout the year and measure the company's progress toward the stated objectives.
Other People Are Reading
-
Recognize Resource Limitations
-
Planning is only useful it produces a blueprint for expanding the company based on the real capability of the management team and the financial resources available. It must also take a realistic view of how the company is positioned versus its key competitors. A plan that shows the company's revenues reaching $50 million by year three of the plan, assuming it invests $2 million on an expanded marketing program, is only useful if the company has the $2 million available to spend. A plan that sets a goal of being the undisputed market leader within three years is only realistic if the company is not up against larger, more entrenched, better-capitalized competitors.
Implementation Schedule
-
For a plan to be actionable, the management team must show when each step in the plan will be implemented. The team must then evaluate whether the schedule is reasonable -- whether all the goals can really be accomplished within the planned time frame. Putting together a calendar with target dates of completion allows coordination of all the departments and individuals that have to work together to accomplish the goal. It also shows the budget required for each step so the financial staff can make sure the necessary funds will be available when they are needed.
-
Responsibility for Achievement
-
When the next year rolls around and company management reviews its accomplishments versus what had been in the plan, many times they will be surprised that very little progress was made toward one or more of the objectives in the plan. A reason for this is lack of accountability -- the person ultimately responsible for the achievement of the action step was not clearly spelled out in the plan. Even if a manager knows an objective is part of the overall company plan for the year, it is not a high-priority item unless he knows the task is part of his job and part of how his job performance will be judged.
Beyond Strategy to Specific Tactics
-
Business plans for both start-up companies and even well-established companies often lack specifics about what needs to be done to accomplish each strategy. They talk in vague strategic generalities, with statements such as "We will significantly increase the distribution for Product #1." This doesn't address which new distribution channels will be tested. It doesn't say why the channels were chosen. It doesn't have a time frame for implementing the strategy. There is a gap here between stating the strategic goal and describing how it will be accomplished. The company needs to envision the goal being achieved and work through all the steps required, again assigning responsibility for each step. Start-up companies' plans often state that they intend to advertise to reach their target customers, but they neglect to discuss which of the many, many choices in media were selected, why they were selected or what marketing message the company intends to emphasize to these customer prospects.
-
