Planning, Startups, Stories


Tim Berry on business planning, starting and growing your business, and having a life in the meantime.

About Things Not Going According to Plan 0

So things don’t go according to plan. Big deal; change happens. Does that mean your plans failed? No.  Not if you understand planning and work it correctly; at least, not with business planning. I don’t know about diets and life plans, but business plans are always wrong, but still vital. It’s the fact that things don’t go according to plan that makes planning so important.

I refer to a thoughtful post at Lifehack today titled at Why Your Plans Fail, written by Scott Young. Here’s his lead:

Business plans, diet plans, plans to get a degree and your plan to get rich. Life is full of planning. You’d think that all your practice planning would make you at least somewhat good at it. Then why do so few things go “according to plan?”

You want business planning not because things will go according to plan, but because they won’t. If that seems ironic or contradictory, consider walking or steering; both are constant corrections, falling in and out of balance, and revising. Good planning isn’t guessing right, it’s managing the process of revising and reviewing.Business_plan_istock_000000240797sm

Scott suggests what he calls “the planning fallacy,” which he suggests is about how people are wrong and “fail to recognize it. People make wildly overconfident projections but fail to notice their abysmal track record in predicting.”

The answer? Not a different technology, according to Scott.

The problem isn’t a better planning method. We’ve all had a great deal of practice planning. Different planning styles can help, but they can’t solve the core problem of uncertainty. That is, you have no idea what the future holds.

The planning fallacy creates two major problems – the inability to plan and being blind to that incompetence. The real solution is to keep a careful eye on your track record and learn to stomach uncertainty.

Ironically, though,  the answer is in fact a new kind of planning, although not a new planning technique, or technology. It’s what I called, just a couple of months ago, the not so big business plan. Which is in fact very close to learning to stomach uncertainty. I wrote:

  • [Your plan] is going to change. You want to know afterwards how it changed, when it changed, and why it changed.
  • It doesn’t have to be “right.” You’re not going to implement it blindly, like running into a brick wall. It leaves tracks you can look back on to trace changing assumptions. You’re going to use it to steer. Steering involves constant corrections.
  • It’s concrete and specific about what is supposed to happen, when, who is responsible, and how much it costs. Otherwise you won’t be able to follow changes.

That is, in my opinion, a better planning method. We don’t measure planning by whether or not things go according to plan, but rather by whether or not planning helps us build the business, develop and implement strategy, and — a critical factor — manage rapid change.

Scott’s doing the “straw man” trick, defining what he calls “traditional planning” as something I’ve never seen work (in 30+ years as a planner) and I’ve never seen anybody who understands business planning advocate. Traditional according to whom? Scott wrote:

Traditional planning starts with your objective and works backwards from that. Let’s say you were planning out what career choice you wanted. A traditional approach would be to work out your career choice, possible firms to work with, education you’ll need, classes you’ll need to take and how to fund your education. Each step determining the one before it.

The problem with this method is it cleanly erases uncertainty along the way. What if changes happen in the industry and firms you want to work for start downsizing? What if your school of choice doesn’t accept you? What if you don’t like the classes or eventual career? What if you can’t fund tuition? Flexible planning starts where you are and works forward. So your current position might be limited post-secondary schooling and funds.

I strongly disagree. That’s not good planning and it’s not traditional planning either. How far back do we have to go? It was before I was born that Dwight Eisenhower, military leader and U.S. president, said “the plan is useless. Planning is essential.” Following a plan through changed assumptions is just dumb. The answer is recognizing that planning is a process, it continues, and it is a powerful tool for managing change (from “not so big” again):

  • Set up schedules for frequent review. Your plan will change. Your assumptions will be wrong. Your plan will be wrong. You’re going to use it like a steering wheel, to make corrections, track changes, etc.
  • Identify important assumptions. How will you track them? How will you know when they’ve changed?
  • Admit it: you’re always planning. You’re always thinking about this stuff. Now you’re writing it down – not printing, necessarily, not even sharing until there’s a benefit to that, but planning and tracking, always.

To me that’s the only way to plan. Scott actually gets pretty much to the same place, with his conclusion:

Flexible planning suggests that many outcomes are favorable and that the paths to get there are almost infinite. Instead your job becomes to put yourself in increasingly more favorable positions.

In a business context this would mean planning your business so that it would have the largest amount of opportunities available. This way if one of your original plans fails, you can easily switch to another.

I think he’s getting close here, but  we can  still do that better. Staying flexible might be nice for some contexts (to be fair, he’s writing a lot about career planning and education planning and such), but I’m skipping that and focusing in on business planning.  You have to assume change, build for it, plan for it (nice phrase, no?) and manage change. I mean explicitly manage change as I suggest in that other post, scheduling and establishing the review process, tracking assumptions, and leading change without losing track of your course. My conclusion:

Keep your head up. Keep your eyes forward, scanning the horizon, watching for what’s coming up ahead. If you’re an athlete you’ve heard this from coaches as you dribble or catch or run. If you hate sports metaphors, then think about walking a busy city sidewalk. Don’t look down, you’ll bump into somebody. Look up.