Let’s not kid ourselves.
We’ve all been there.
That business planning session where a bunch of great ideas got broken down into bite-sized things to do, then captured in a "plan". Everyone congratulated each other on a job well done and retreated to the bar to celebrate.
After that? Nothing.
Back at the office, it's business as usual for all concerned. Good intentions forgotten. As a result, there’s just no escaping the feeling that all that work was a waste of time and effort.
Sound familiar?
If so, it’s time to make some changes.
Focused business planning is an essential component of the sustainable growth planning process (check out the graphic below). It’s one final step that gives life to your business purpose and related strategy. And it’s the precursor to creating meaningful and actionable key performance indicators (which we covered in our previous Insights post).
Experience points to a few common pitfalls that contribute to lacklustre outcomes from business planning. Here’s what we’ve observed and some tips on how you can improve business planning outcomes.
Business plans achieve little if created in isolation
A business planning session that begins with someone (usually the boss) saying something like “here are our priorities for the year ahead” is unlikely to produce great outcomes. We know of businesses that take this approach year after year and wonder why they either A) go nowhere or B) seem to endlessly chase the next big idea. Which they never find…
The first step in the business planning cycle should be an honest review of your business purpose (the non-financial reason your business exists and why it does what it does), your vision and how your current strategy is working toward the delivery of both of those.
The fundamental job of your business plan is to provide a shorter-term road map guiding the day-to-day activity that helps your business achieve its longer-term aspirations and outcomes. If any action items discussed and agreed in the context of your business plan don’t fulfil that function, then the word “irrelevant” should spring to mind.
Don't be tempted to simply "rubber stamp" the purpose, vision and strategy. Instead, consider all three in light of external and internal factors that influence the business. It’s rare for a business to make massive “purpose shifts” (given it’s the reason the business exists beyond making money). The vision and strategic plans are different matters and should be reviewed to ensure ongoing relevance (indeed, strategic plans should be subject to regular review throughout the year, not just when kicking off the business planning cycle).
The graphic below illustrates the flow of the sustainable growth planning process:
This approach contributes to creating the framework for sustainable growth in your business.
That laundry list of things to do that you think is a business plan? Not good enough….
Effective business planning should result in exactly what it says on the box - a plan. Which is not a long list of things to do, un-timebound and with no attaching accountabilities.
Business planning sessions can cover a lot of ground and will deliver quite a lot of work to be done. That being the case, your list of initiatives must be thoroughly prioritised, recognising they’re not all equally important or urgent. You won’t get 100% agreement during the ranking exercise, and that’s good...constructive debate is healthy. If you simply can’t get a majority view on a contentious item, set it aside for a separate discussion. There’s nothing wrong with that.
Next, make sure that there’s a single point of accountability for each initiative agreed upon and prioritised. Several people could likely be involved in seeing an initiative through from start to finish, but you need one person responsible for keeping things on track.
And last, make sure you assign timeframes around each initiative. Not just an end date for completion but (especially for the more significant projects) dates by which agreed milestones should be achieved.
A set-and-forget approach once the plan’s prepared also won’t cut the mustard
You’d think that agreed timeframes and single-point accountability would be enough to get things done, right?
While that sometimes (infrequently) might be the case, sadly, it generally isn’t.
Your plans should be reviewed regularly to ensure all milestones are met. Generally, we recommend a formal quarterly review process. However, progress on business plan initiatives should be a vital part of the regular communications in your business - team meetings, email updates, informal get-togethers and the like.
Change is inevitable, so there are plenty of external and internal factors that can quickly derail the best of plans. Ongoing assessment will help you identify those factors so you can make the necessary adjustments. Also, be prepared to dump projects and/or introduce new ones where the environment changes dramatically enough.
Committing to regular reviews is one thing but making it happen is another. It's often best to bring in someone from outside the business to ensure accountability - someone with no "baggage" and who's not afraid to ask the hard questions. Our usual recommendation is to appoint an Advisory Board with a mandate to keep the business on track, act as a sounding board for new initiatives, and help when problem-solving is required.
Employees won’t buy in if they’re not involved in the process
There’s a mountain of evidence that employees at all levels in a business will give their best and produce “discretionary effort” when they can see how their role fits into the bigger picture and contributes to outcomes.
It’s not enough for the senior people in a business to disappear for a day or more and then come back and present their teams with a list of priorities. You won’t get buy-in, and there’ll be a very task-based approach to work across your team.
Some of the best business planning sessions we’ve seen involve at least one participant from each functional area. Where the business is small enough, there’s nothing wrong with everyone being involved in the process. Some excellent ideas are hidden in plain sight, often coming from the least expected employee.
Where the size of the business means it’s not practical to include everyone, communications on outcomes and expectations following your business planning session will be especially important. Give as much information to the entire team as you can, encourage discussion and questions and answer any concerns or issues as honestly as possible.
This doesn’t mean you need to create consensus…that’s difficult to achieve and more challenging as the business grows. But you do need to give employees enough information to help them understand their place in the business and which allows them to give meaning to what they do on a day-to-day basis.
That will contribute to higher engagement levels across the business and a willingness to contribute that discretionary effort we mentioned earlier.
Summarising our essential tips to better business planning...
Business plans should be clearly linked to the bigger picture - purpose, vision and strategy - to help create the framework for sustainable growth rates.
Your business plan should be exactly that - a plan. Prioritising actions, single-point accountability and deadlines are all important.
Plans need to be reviewed to ensure progress is on track and initiatives remain relevant. Consider appointing an Advisory Board to keep you accountable and on track.
Involve employees in the process as much as you can and frequently communicate, which will contribute to engagement levels.
Does business planning feel a bit like Groundhog Day to you?
Do you want your business plans to be a foundation for sustainable growth?
GrowthCatalyst can help.
We invite you to contact us to arrange a conversation, face-to-face or virtual.
Alternatively, you can book a time for an initial discussion here.
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