The effective development of business plans is drawing a lot of attention these days. In no way does this mean that companies are becoming more effective in their business planning or business plan creation. Many companies claim to be doing regular business planning but most are not. Executives and managers continue to make fundamental mistakes that undermine otherwise well intentioned strategy formulation efforts.
Here are four fatal flaws that consistently creep into business planning processes that if avoided, can significantly improve both the process and the results.
Skipping Rigorous Analysis Before Starting On The Actual PlanMany executives and managers believe their business experience and knowledge base alone equips them with all the information they need to conduct effective business planning. This belief is almost always untrue and serves only to undermine the kind of critical thinking from which truly creative strategies are born. This becomes complicated, since most planning is done by a team and all participants come with preconceived notions and differing sets of data on which to base the plans. Having an experienced facilitator with success in business planning is critical. A good business planning process takes full advantage of the numerous tools of strategic analysis to gain key insights regarding how the industry is evolving, how competitors are changing positions, and where an individual firm's sources of competitive advantage lie. Don’t ever overlook the critical role of defining the company’s Core Purpose and Core Values before you start.
Believing Strategy Can Be Built in a DayMany executive teams earnestly believe that effective strategies can be identified, explored, and agreed upon during abbreviated offsite meetings where the main driver of the agenda is the timing of snack breaks. While offsite meetings are useful forums in which to share information and address key issues, meetings should be adequately timed over days or weeks if necessary, so that sufficient preparation, review and discussion can occur before and during the event. We have found that breaking the process into multiple sessions, each with assigned pre-work, allow participants to reflect on the work being done in less pressured surroundings and provide clearer input to the plans.
Failing to Link Business Planning with Strategic ExecutionAccording to a recent survey, execution overall and strategy execution in particular hold the first and second positions when it comes to "top issues" in executive's minds. Executing strategy requires the work of the entire organization, whereas business planning only requires the top team. One of the greatest challenges of the planning team is the ability to link their work with ongoing strategy execution. Strategic success demands a simultaneous view of planning and doing. Managers must be thinking about executing even as they are formulating the plan. They also must find a means of effectively cascading the corporate plan down into the various functions and business units so that all of the work is aligned.
Dodging Strategy Review MeetingsBusiness plans quickly become obsolete when there is no activity in place to keep them alive. Worse, managers sometimes feel freed from execution accountability when reviews are continually rescheduled or dropped from the calendar altogether. Successful businesses have made their business process a continuous and dynamic one. This is a more realistic approach than the once-a-year planning meeting that still dominates many corporate business planning efforts. The most direct way to maintain a consistent focus on strategy is to schedule and hold regular strategy review meetings. At the end of the business plan formulation, managers should establish a strategic governance process where business plan review meetings are scheduled a year in advance. In the meetings, with each of the strategies and tactics having an owner responsible for it, there is accountability. The measures that have been developed provide a strong basis for review of the success of the pan and what may need to be modified to keep on track.
Business planning tied to strong execution is a winning combination. Our clients are enjoying this success. How may we assist you?
Maver Management Group