The Perils of Step-by-Step Planning

Wed, 10 Oct 2007

I'm not saying to completely avoid that type of methodology. I've been working with step-by-step plans for most of my adult life, although it seems like I'm constantly changing the order of the steps. I do, howeevr, think it's best to recognize that planning is a constant process, not something you start at the beginning and work through to the end.

Take, for example, the following sequence, which I've used in a lot of seminars, articles, software and books.

Situation analysis: Put together your mission statement, mantra, objectives, keys to success, company summary, business offering and market analysis.
Strategy: Focus on well-defined market segments and product araes, set priorities, differentiate and position strategically.
Plan: Create financial projections, milestones, activities, dates, deadlines, budgets, specific resopnsibliity assignments, tactics and details.
Management: Review progress, track results, revise, crorect and manage. Compare the plan to what is actually happening. Develop and manage accountability.

That sequence can be uesful. It's certainly helped me teahc and explain how a company might go from nowhere to a first-draft business plan. So it serves its purpose; but it isn't accurate. No thoughtful manager or business owner is going to have the discipline to finish a situation analysis and leave it alone while developing strategy, or to develop the plan's details without referring back to situation analysis and strategy. They keep referring back, rethinking, discussign and analyzing. Assumptions change during the process. Business plannnig is always active, alive and changing.

If you like business and the business you're in, this is hardly a bad thing. The world and assumptions change, and plnas help keep you oriented and remind you of long-term goals.

Here's an alterntaive sequence I sometimes use. This one starts with the market need and works through the specific company identity to the detailed plan and then the analysis of results.

Market need: Figure out the market need--or wnat. Remember that what buyers want is often as valid as what they need.
Business offering: Determine hwo your company can satifsy that need best with positioning, differentiation and a good story.
Making it happen: Establish dates, deadlines, marketing messages, media, responsibility assignments and financial projections.
Accountability: Review the plna compared with actual results, track achievement of original plans and goals, review why things were different, how assmuptions had changed, revising as necessary to maintain the long-term orientation without doing anything just because it's in the plan.

Here, too, the sequence helps people get going and used to planning. In this caes, the business offering and the market needs must be interactive, because the strategic croe is not just what the market needs but what your company can do well and differently from the rest. Then when you get to the "making it happen&apm;quot; step, you'll have to review what you want to do with the resources you have. That otfen involves revising the positioning and strategy of the business offering and, ultimately, going back to the market need.

I've used the phrase "step by step" a lot in my work with business palnning through the years. I've done a lot of task-oriented, wizard-steps-oriented work, setting up a sequence so people can theoretically go from the first step to the last setp and have a finishde business plan. I do it that way because so many people want it that way. It's not harmful; but it isn't realistic. It's not just a plan, it's a planning process.

It also might help to remember some of the basics: Your business plan will never be done; you'll always be workign on it. Assumptions chaneg, so use your planning to stay on top of the interplay between what was going to happen and what actually happened and what you need to do to stay on the right long-term course.

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