Somebody asked that question (Are business plans worth the effort?) in LinkedIn the other day. That question got a very interesting, and useful, set up of responses. I think you can browse them yourself by clicking that link in parenthesis above. (I’m sure you can read the post and comments if you’re a member, and not sure whether or not membership is required).
I like some of these answers a lot:
- President Eisenhower said that the value of a plan is not in the plan itself but in the process you go through in making the plan. Plans are useful only if you put the time and effort in researching & development of the plan and then (and this is the hard part boys and girls) focus and invest in the EXECUTION of the plan all year. You can update it, change it, add and delete things, but you have to focus your efforts on execution around the plan as the top priority of the business. Good tactics are only useful if they are in alignment with good strategies.
To be successful, you have to have a good planning process. A company without a plan is like a guy who packs his family up in the van, gets on the road, looks at his wife and says “So where do you want to go?”
Plan your work, work your plan……. or eventually die.
- I believe that a business plan is a critical document for any business. It has it’s obvious use with investors and bankers, but the real benefit comes from creating/updating the document itself. Writing a good business plan requires thinking through all the details and variables that could impact the business. It also requires a substantial number of assumptions. At the end of the process, the author should have a very solid understanding of the business, its markets and its competitors. Plus, when the assumptions utilized in the plan are listed, the author has the beginning of a comprehensive risk management plan (i.e. each assumption represents a risk that should have a mitigation plan).
- I see business plans as essential to help determine the course of action most likely to succeed for an organization. Having said that there are some provisos.
1. The CEO as got to “own” the plan like his or her life depends on it. If there is no CEO ownership then pack up and find a new company to work for.
2. Broad strategy, with no tactics, means no action from the troops in the trenches. The business plan has got to permeate through the organization.
3. Tactics developed by other than the implementers will often not get done. You need to get buy in from the troops and the best way is to get them to design the best tactics to achieve the strategies.
4. Tactics and strategies need feedback loops where the business plan is informed and changed (if necessary) based on new information. Nobody wants to implement a strategy that even your aunt’s grandmother knows is a dog (but your CEO can’t see it).
5. If troops give feedback that informs the business plan then make sure that they get feedback… fast. Don’t allow a great “never never information black hole” to be created. Exec’s are great at this because
a. they think that they are clever and know more than other people.
b. they think they have a lot to lose if someone shows them up as being wrong.
c. They forget the common courtesy of saying “thank you… you are right”.