Business Planning - What is it, Why use it?
If you can’t articulate it, you don’t own it. When you define the future, the plan begins to shape itself to reality.
“Plan, envision, and articulate what you see in the future both for yourself and for your employees.” Michael Gerber
Business Planning – What is it?
In theory it’s a systematic approach leading to
breakthrough performance…
…in practice, it’s the most effective business management tool, if, you want to make the absolute best use of your time, money and resources.
So, what does business planning
do for us?
It forces a clear identification of “How we move ourselves” to our key objectives. It creates an alignment of all the facets of your business on the key strategic initiatives.
Additionally, it fosters a data oriented, fact-based approach using benchmarking exercises, diagnostics, key performance indicators
and more. It also reinforces the vision, but also clearly defines how we will get there (based on Who, does What by When)
What it doesn’t do, is achieve results if the management process isn’t changed, i.e. moving to what I call a plan, do, check act, management style, the PDCA Cycle.
- Plan: Recognize an opportunity and plan a change.
- Do: Test the change. Carry out a small-scale study.
- Check: Review the test, analyse the results, and identify what you've learned.
- Act: Take action based on what you learned in the study step.
When we start to implement an action, we set up a governance process, a review process on a regular basis to run though that Plan, Do, Check , Act cycle. This is an absolutely key part of shifting the dials within your business, the implementation and execution part.
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Coming back to business planning and understanding why we use it,
It identifies the few (think 80/20 rule), long term breakthrough objectives that are critical to the long-term success of your company and it links those major objectives with specific action plans. This also helps us to focus and align our internal organisations (think employees, functional departments, outsourced partners) to achieve those long-term objectives.
But the main thing for me in my opinion, is it turns the vision
and strategic plan
(3-5 year) into a year over year action plan
that is measured monitored and accountable.
Now when we think Breakthrough or Key Objective, we start to think what areas do I need to focus on.
A key or breakthrough objective is an act over coming or penetrating an obstacle or restriction, a major achievement or success that permits further progress, a quantum leap as such…something we don’t know how to do…YET
As mentioned earlier one of the best ways to get a feel on how we do this, is through business benchmarking or auditing against a set criterion. This is something my clients go through on our Growth Programmes, both online and workshop. They look at 12 areas of the business, as examples, Sales and Marketing, Leadership, Digital Marketing, Well-being, etc, and there are probably about 120+ questions that are assessed.
So when we bring it back to “What should I focus On”, we can break it down to the critical few that creates the most value, positions you to capture the most share, sustain the value created and close the biggest most important gaps to your vision and strategy.
Breakthrough Thinking Drives Us To Be The Best!
But what is breakthrough for one company may not be for another.
Why use it Business Planning?
Most companies fall short of their plans, most businesses have a vision (97/98%,), 80% have clear strategic plans, but when we get down to the successes on execution there are only 50/55% that see some success, there is only 33% that actually see significant success.
Why is that, implementation, and execution, we revert to type and go back to working the day the job. It’s difficult to implement that 90 Day transformation/action.
The company vision is framed on a wall, looks fantastic but it’s just a dream, the strategic plan ends up on a shelf, just a wish list and we revert back to tactical activity with little or no improvement.
We need to take our company vision/strategic plan, our desired end state and company aspirations, and create the strategic objectives that drive competitive advantage and profitability. We need to extract the 1-year incremental objectives and improvement priorities, track the return on investment and effort with key performance indicators coupled with detailed action plans.
And this needs to be bolstered with a governance/review process that has a constancy of purpose, process, and language.
