It’s Time to Rethink Your Approach to Business Planning
Business Planning as a Team Sport
Workers enjoy knowing how their role in the company is contributing to the overall success of the business. If employees have that visibility and are recognized for contributing, leaders create a much higher, productive and successful work culture.
How do you foster this type of corporate environment? The answer is business planning. My belief is many leaders do a cursory job. Proper business planning should be a core piece of your strategy and management of the plan is essential to achieve the goals that the executive leadership team and ownership have for the company.
In some work environments only the CEO develops the business plan and then presents it to management team and says, “Okay, go to work. This is the vision for the company. Make it happen!”
The One Page Business Plan
I use a tool called the “One Page Business Plan” that provides a high level of discipline and rigor important for every company to achieve sustainable cash flow and profit growth regardless of size from a startup to a $100M company. Jim Horan is the developer and author of the tool and it’s one that I am trained and certified to provide my clients and Vistage group members.
I used the “One Page Business Plan” when I was a CEO on several occasions and as a consultant. It enables me to bring my management team in line with my vision and it also enables them to be a part of the authorship of the business plan. I invite my management team to contribute to the development of the business plan so there is a sense of ownership throughout the company.
I also ask the leadership to take the same approach in developing action plans for their direct reports so we get vertical alignment up and down the organization. Everybody understands their role and how they are contributing to the bigger picture. This alignment provides for a much healthier work environment.
What got you here, won’t get you there
The more important piece is not so much the tool, but the discipline and routine that comes with it. There is obviously a limit to how useful the tool is if you aren’t using it. We typically develop business plans once a year and put them on the shelf. We finally take another look and dust off the cobwebs just in time to create another plan we’ll never look at for the coming year.
My approach is very different. We review results against our plan on a monthly basis. We adjust our tactics to bring variances back in alignment with the plan or revise the strategy to reflect the changes in business condition. It’s an opportunity to set new goals and new actions for the ensuing 30 or 90 days, whatever the time span that works best for the business.
This process provides an accountability that is critically important to keeping the business on track. Assign ownership to different elements of the action plan and make sure to keep everybody delivering on promises and accountable to the organization—not in a punitive way, but a helpful, collaborative manner. I deal in accountability quite a bit because it’s a huge piece of the Vistage CEO peer advisory experience I facilitate.
There’s nothing more compelling than having to report back to your peers on how you are doing relative to your stated goals.
Results are Compelling
There’s nothing more compelling than having to report back to your peers on how you are doing relative to your stated goals. Again, these aren’t someone else’s plans, they are commitments the CEO and leadership team said were important to the success of their business.
I recently worked with a CEO of a large construction company that was going through significant growing pains. To my client’s credit, he recognized that the back of the envelope planning process was not going to serve his company going forward. He needed to elevate the engagement of his leadership team and be more purposeful in developing a growth strategy that was proactive and actionable.
One Page Business Plan in Action
I recommended the “One Page Business Plan” tool and my client readily saw its benefits, as well as the value of engaging his entire leadership team in its development. Over the ensuing 30 days, we put together a comprehensive business plan that reflected the CEO’s vision and his management team’s operational strategy for taking his business from $20M in revenue to north of $34M in 12 months. I’m happy to report that my client exceeded his growth expectations.
My client never experienced such a high degree of alignment and sense of ownership with his leadership team. “It was like having a room full of growth-minded business owners all collaborating with the same goal in mind…building our business,” he said.
Business planning can be cathartic for everyone in the organization. In particular, giving the CEO a platform for articulating his/her vision and enlisting the leadership team to develop a strategy and action plans that they can own. Recognizing the achievements of individual and team contributors makes for a rewarding experience.
Do you have a favorite tool for business planning? If not, contact me to learn more about the “One Page Business Plan.”
About the Author:
I’m a Vistage Chair and Executive Coach helping leaders make better decisions and achieve their most ambitious definition of success. I can be reached at Mark.Thomas@VistageChair.com.