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When it comes to business planning, too many managers simply go through the motions. They make a low-passion effort at modest revenue growth, transferring unachieved prospect lists, and explaining (in nitty-gritty detail) why last year's most important initiatives simply didn't happen. It's as if publication of the plan is the ultimate objective. It's not. Business planning is not about the planning, but about the business. The purpose of the effort is to improve the organization's chances for achieving future growth, profit, and success. Over the years, we've worked with organizations of all sizes and types, industries, and product or services focus. Most everywhere we've looked we see a similar opportunity to make annual planning much more productive. To help you do just that, and create a plan that helps your organization grow and achieve profit, here are our four specific ideas: 1. Write to an Audience Business unit plans are often written to an audience of the firm's senior managers—or worse yet to no audience at all. These documents are full of undefined and insider information and too much jargon. It's little wonder that few will read a plan that looks like that. Managers should remember what we learned in high school English class, namely to write for a more general and unknowledgeable (eighth grade) audience. It doesn't matter that few people will necessarily read the plan. Those who do will understand it much better. 2. Tell a Great Story Fundamentally, the purpose of a business plan is to attract attention, interest, and resources to the business. It's just like an investment prospectus. When someone reads your plan, will they want to become involved and invest their treasure in your success? Few if any firms have unlimited financial and people resources; each business unit is in effect competing with the others for these investments. The business plan must be interesting, relevant, and compelling to stakeholders. As with the firm's larger scale strategic plan, each business unit and/or market segment plan should define the strategic framework overarching the business. In particular, this framework will include the business mission (purpose), vision (destination), and enterprise strategy (competitive advantage). This is important stuff. Teams are more engaged, more productive, and more successful with work that has meaning, purpose, and direction. 3. Connect to Reality The dream can (and should) be big, bold, and difficult to achieve. Too many organizations are meek (or passive), and they miss the opportunity to stretch themselves against their biggest and best aspirations. At the same time, an effective business plan must tie these aspirations back to an accurate and realistic assessment of current reality. Managers need to understand market trends and developments in both the industry and larger world. They must accurately size up the playing field, evaluating the strengths, shortcomings, and strategies of key competitors. Only then can leaders define and defend their distinct competitive advantage. This then leads ultimately to creating focused operational strategies—answering the "how" questions— that bridge the gap between today's current reality and important strategic objectives. 4. Focus on Action Quite often business plans lack clarity and specificity in the action agenda. Initiatives and goals are vague (e.g., to "retain existing clients" or to "add new services as appropriate"). Effective goals are specific. Additionally, these goals are measurable (so you can see when they're done), actionable (they can be executed), assigned to a responsible individual (not a team or committee), and time-defined (not "as appropriate," "ongoing," 'in the second quarter," or "in 90 days"). It may seem simplistic (it's not), but the magic tool for action planning is usually a simple spreadsheet or table. Ditch the verbose, essay approach to writing goals. Columns of information better force the issue: a clear definition of the goal, one person in charge of delivering it, specific measures of success, and a finite due date. The primary purpose of the annual business plan is to help the organization grow and improve. It isn't about going through the motions, checking off a box, or writing a document that no one will read or use. A great business plan is short, sweet, and laser-focused. It is interesting, relevant, and compelling, a story that attracts both talent and financial attention. The plan connects strategic concepts like mission and vision to the organization's market and competitive landscape, operational strategies, and a detailed, executable action agenda. How does your plan and planning process stack up? Let us know what you think and what you are doing to write and use better business plans.
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