The business plan review is as sacred a ritual as the business plan ‘sign-off’ itself. Yet few people would agree that it does anything more than spill blood, damage careers, and inflict pain. Is there a batter way to do it?
Most reviews tend to be about numbers – why haven’t you made your number? Apart from the pleasure it may give the reviewer in inflicting pain and humiliation, such reviews don’t do much good, and plenty of harm
What is the real value of the business plans?
In most cases, though (and I have written about this at length elsewhere, so will not elaborate here), the real point of planning is the planning itself, not the plan. It is the process that has value, not the outcome… ‘Plans are nothing, Planning is everything’ and so on..,
What are the key elements of the process?
1. Getting all the relevant people involved, so they know what to expect from each other
2. Identifying the assumptions underlying the plan and surfacing all the hidden assumptions we would all rather not talk about
3. Identify the one or two key actions (or strategic initiatives or whatever we want to call them) we need to take to make sure we can actually execute the plan.
If we understand this, it becomes obvious what we should review every quarter (monthly isn’t worth it, in most businesses)
1. The assumptions we had made: do they still hold good? Is the world unfolding the way we expected? If not (usually not!), what has changed?
2. Therefore, what do we need to change in the plan?
3. Who is the weak link in the execution? Therefore who needs to be strengthened and supported?
4. Which of the strategic initiatives is moving ahead as we wanted? Which isn’t, therefore what do we need to do about it?
5. What new initiatives do we need (ideally, we should not try to run more than three initiatives in a company at a time – if we are going to add one, we should drop one)
For instance, with one of my clients – a software products company selling to financial institutions, the key assumption turned out to be that financial institutions in India will replace an old product in droves – this is the assumption to monitor – more important, to see what we can do about it – can we make them migrate? Can we somehow make them feel comfortable? Is there a leader whom everyone will emulate? And so on. With another of my clients, in the outsourced product development space, the key assumptions turn out to be that we will be able to go to large enterprises by partnering with leaders in certain chosen focus technologies. Top management can then focus on questions like – how are we progressing in this partnering effort? Do we know who the leaders are? What can we do to make them partner with us? If progress is not what we expected, what is our plan B to achieve next quarter’s numbers? And so on.
If reviews focused on assumptions and the progress of strategic initiatives, they would actually be useful.. Now wouldn’t that be something! A business plan review that actually takes us somewhere..
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1 comment:
Agree completely. Perhaps a couple of more points can be added to the list of items to be reviewed, but that is mere quibbling. The fundamental problem of this approach is that it is not as safe and satisfying to the reviewer as it is to tell someone off for not having done enough - it calls for the reviewer to 'own' the tough challenges of business, you see!
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