Adopt business planning as management, with lean business planning. Repeat this step monthly for the rest of your business life. A going business is always revising its plan. Change is constant. Follow your review schedule monthly. A real business plan is never done. If your plan is done, your business is done.
The workable lean business plan is the first step in a planning process that will help you steer your business and optimize your management to get what you want your business to do for you. Follow up with the review schedule, review plan vs. actual results every month, and keep your plan alive and growing. Keep it lean, keep it live.
Experts know that planning manages change. Change is constant. Change does not void planning.
You’ll need to add product and marketing information to coordinate development, deployment, messaging and timing. Add to your financials to account for loans and capital equipment, which become part of a balance sheet.
The normal lean planning process is what I call the PRRR cycle, for “plan, run, review, and revise.” This is my lean-planning version of the traditional lean business technique that started with lean manufacturing and also includes the lean startup.
This is frustrating, because people get bored with consistency, and almost always the people running a strategy are bored with it long before the market understands it. I was consulting with Apple Computer during the 1980s when the Macintosh platform became the foundation for what we now call “desktop publishing.” We take it for granted today, but back in 1985 when the first laser printers came out, it was like magic. Suddenly a single person in a home office could produce documents that looked professional.
What I saw in Apple at that time was smart young managers getting bored with desktop publishing long before the market even understood what it was. They started looking at multimedia instead. They were attracted to new technologies and innovation. As a result, they lost the concentration on desktop publishing, and lost a lot of market potential as Windows vendors moved in with competitive products.
That argues for sticking to the plan. Strategy takes time.
The Arguments for Revising the Plan
On the other hand,
“There is no virtue in sticking to the plan for its own stake.” — Tim Berry
Nobody wants the futility of trying to implement a flawed plan. You’ve probably dealt with the problem of people doing something “because that’s the plan” when in fact it just isn’t working. I certainly have.
That kind of thinking is one reason why some Web companies survived the first dotcom boom and others didn’t. It also explains why some business experts question the value of the business plan. That’s sloppy thinking, in my opinion: confusing the value of the planning with the mistake of implementing a plan without change or review, just because it’s the plan.
How to Decide: Stay the Course or Revise the Plan
Change the business plan or not. This consistency vs. revision dilemma is one of the best and most obvious reasons for having people — owners and managers — run the business planning, rather than algorithms or artificial intelligence. It takes people to deal with this critical judgment.
One good way to deal with it is by focusing on the assumptions. Identify the key assumptions and whether or not they’ve changed. When assumptions have changed, there is no virtue whatsoever in sticking to the plan you built on top of them. Use your common sense. Were you wrong about the whole thing, or just about timing? Has something else happened, like market problems or disruptive technology, or competition, to change your basic assumptions?
Do not revise your plan glibly. Remember that some of the best strategies take longer to implement. Remember also that you’re living with it every day; it is naturally going to seem old to you, and boring, long before the target audience gets it.
It’s a lot like the legendary farmer’s axe, that has had its handle changed four times and its blade changed three times, but it’s still the same axe.
As your company gets used to the planning process, the plan is always a work in progress. It gets a big refreshment every year, and a review and course correction every month.
Lean planning is especially good for dealing with this essential reality, because lean is faster and easier to do and therefore easier to review and revise. Streamline it. Make it just big enough to run the business.
Keep it Live
The idea is that you always have your lean plan up to date. You meet every month to review it. Every so often, asbusiness plan eventscome up, you spin out of your business plan a formal output piece, whether it’s a pitch presentation, an elevator speech, or a full-fledged formal business plan document.
Do understand, always, that the document, summary, or pitch is not the plan; that’s just output from the plan. It’s the latest version. But the lean plan goes on, like steering, walking, dribbling, and navigation.
Don’t ever postpone things waiting to finish a plan. Get going. Start simple with just the bare necessities, and keep reviewing and revising as business goes on.
Case in point: the Palo Alto Software business plan was first started in the late 1980s. It is still going on today, in 2021, with regular reviews and revisions. It still isn’t done. The management team meets for a regular monthly review session, and revises as necessary.
We’re human. We can’t help it. We’re predicting the future, and we’re going to guess wrong.
But they are also vital to running a business because they help us track changes in assumptions and unexpected results in the context of the long-term goals of the company, long-term strategy, accountability, and, well, just about everything lean planning represents.
So the business plan itself is an important first step. To optimize for you business, though, you can’t stop there. You need to have regular monthly business plan review. Look over plan vs. actual results. Turn the planning into a dashboard.
Measure the value of a business plan by the execution it causes.
It’s about getting what you want from your business. Forget the big formal business plan document of decades ago. Forget the fact that the plan will be wrong. ItKeep it simple. Do only what you need. Write it down and keep track of it so you can look back in a few weeks to check what you thought would happen and compare that to what actually happened. Your business plan is wrong, but it’s vital to good business management.
Use the planning process like a GPS for your business — the plan as destination and route, and monthly plan review for constant course corrections.