…but planning is everything
During our third lockdown, with no clear path to an exit, and with BREXIT complications mounting, it seems like business planning is fruitless.
What’s the point of preparing a plan if you’ll have to tear it up before it begins and start all over again? “We tried that coming out of the second lockdown and look what happened: a third lockdown almost immediately and a BREXIT deal which is causing unforeseen delays and extra costs,” a client said to me recently.
The title of this piece was first written by Dwight D Eisenhower, former President of the US and the man charged with planning the largest invasion force ever during WW2. He went on to say that “the planning process demands the thorough exploration of options and contingencies.”
Planning Time is Thinking Time
Business planning is about thinking. The value lies in the process. When you spend time planning, you’ll think about your business in ways that you may not have thought about it before. You’ll look at it from different angles and consider the actions you want to take to make it successful. You’ll identify relationships between actions and planned outcomes; between costs/resources and income.
Business planning helps you focus on the right things to do for your business but also to identify the things you won’t do – which is just as important.
When you go through the planning process, you’ll decide what’s important for your business. This is enormously helpful when you get into the day-to-day grind. With a clear plan, you can focus on what’s most important, rather than spending time trying to figure out what you should be working on.
This is much more efficient than trying to decide what to do every day. When you do that, you generally spend your time putting out fires – dealing with the most urgent things on your plate.
With a plan in place, it becomes easy to work backwards to create efficient and effective weekly and daily to-do lists. Then you can focus on what really needs to get done each day. And that’s how you reach your goals.
Past Experience Can Help
You could look back at what worked well in the past and try to understand what made that happen? What were the circumstances? What actions did you take? What were the outcomes?
Looking forward, you should question whether that will work again? What, if anything, has changed? How can you adapt to that change?
Facing the uncertainty we do now, plan a few, but only a few, scenarios. Set out your assumptions around these and project income and costs forward one or two years.
For example, if you have three broad scenarios – and I’d suggest limiting it to three – determine how you would track your performance as the weeks and months go by. What small number of indicators will tell you how the business is performing? (e.g. Total # of customers; Average € per customer; Gross Margin.)
Assess the outcomes and make corrections.
Dwight D Eisenhower was in charge of planning during a global conflict when uncertainty was at its peak. The uncertainty we’re facing today is daunting but in six months’ time we’ll have greater clarity on both COVID and BREXIT.
The purpose of planning is to make decisions about the future of your business. The purpose of a business plan is to document those decisions so that you can refer to them going forward or share them with other stakeholders (customers, colleagues, banks, etc.).
Keep an Eye on the Score
Monitoring your performance – at least monthly – allows you to adjust those plans to take account of what’s happening in your business world.
Eisenhower was right. No plan survives its first encounter with the real world. But if you go through the planning process well, you’ll already know this and you’ll also have thought about how to respond based on the information you collect.