Why Business Planning Must be a Process… Not an Event
by The One Page Business Plan Company, January 20, 2021
The days of writing an annual plan and putting it on the shelf or in a drawer until next year are over.
Good planning is based upon the reality of constant environmental and internal changes.
New entrepreneurial businesses, growing businesses, and mature businesses each have different priorities. Thus, the content of those plans—Vision, Mission, Objectives, Strategies, and Action Plans—will change as the business matures. But there is no question that highly successful businesses often outperform others because they use a dynamic planning process.
What a dynamic planning process involves is an awareness of external and internal changes that can affect business strategy. This requires that objectives and action plans conform to any new strategies that address these changes.
New businesses will likely be in the capital acquisition mode and must simultaneously watch cash flow. Marketing, advertising, and other forms of self-promotion are critical. The infancy of company culture begins to emerge and the few people in the organization must be prepared to wear many hats simultaneously. Each of these priorities require a unique set of objectives and action plans to keep the business in ascension mode.
Stable, yet growing businesses will face their own set of unique business planning requirements. Planning for and executing an organizational development plan is key among them. Outrunning the supply line is also a concern that needs attention. Similar to a new business, capital acquisition, cash flow, and promotion require considerations for business plan inclusion.
Mature businesses will want to gain or maintain a leadership role in the sectors it serves. Succession planning will become more of a priority as leadership team members move on or retire. More emphasis on cross-functionalization of processes and workflows will be critical to enhance efficiency and cost management. There will be a need for more innovation to invent spin-offs or to reinvent the company to ensure the longevity of the business.
New skills will likely be required to meet changing environmental changes such as the use of artificial intelligence and machine learning. Leveraging social media in new ways and on new platforms may also push the skilling-up of certain areas of the business.
As you can see, only scratching the surface of a company’s maturation requires new objectives, strategies, and action plans aligned to the different priorities.
And even within each maturation segment, new opportunities and challenges will emerge that will require a rethinking of priorities that will require each department, work team, or project team to reevaluate their objectives and action plans. As corporate strategy changes, the trickle-down of change will be required.
Maintaining a great business plan requires constant attention to internal and external change dynamics. In a newer business, revisiting one’s plan may be required on a quarterly or even monthly basis. More mature businesses can generally foresee the near-term future based on past and current trends and business cycles. Major economic or sociologic environment changes, innovation, and disrupters require considering a recalibration of the plan.
So, if your organization has been doing business planning annually, waiting to make changes to your plan, the organization may want to consider formal quarterly reviews. We need only look at the rippling effect the Covid-19 pandemic has had on nearly every sector of businesses, world-wide consumer behavior, legal, and legislative action. All have been impacted by the pandemic. While an extreme example of environmental changes that impact a business’ potential livelihood of survival, the point is that business leaders need to be vigilant about changes occurring in the external world as much as keeping an eye on the internal business, for changes one could correlate to changes in another.
One way to create and manage “living” or dynamic plans is to use an easily edited cloud-based system like The One Page Planning and Performance System as a place to capture and record your best thinking.
The process of a periodic environmental scan or S.W.O.T analysis concerning the sectors the business serves and any macro-environmental changes are ways to keep a handle on what could force change to your business priorities and, thus, to your business plan. Considering different, creative ways to keep a vigilant eye on the competitive landscape are critical to maintaining a dynamic and responsive organization. Belonging to and actively participating in associations that serve your business sectors is another means of staying connected to environmental changes.
Look at your business plan as a blank slateto avoid preconceived notions or the creation and perpetuation of sacred cows. A fresh, informed, and objective point of view will help make your business plan reflect the direction company leaders take.
Do not fear change. Embrace it with a dynamic business plan!