Planning, Startups, Stories


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

Planning Principles: Business Plan in Constant Change

One of the strongest and most pervasive myths about planning is dead wrong: planning doesn’t reduce flexibility. It builds flexibility. Lean business planning manages change. It is not threatened by change.

This is the third of my five main principles of business planning. The first was do only what you’ll use. The second is that planning is continuous process, not just a plan.

Why plan when things change so quickly?

Regarding this third principle, people say, “Why would I do a business plan? That just locks me in. It’s a straitjacket.”

business planning is like dribbling

business planning is like dribbling

And I say: wrong. Never do something just because it’s in the plan. There is no merit whatsoever in sticking to a plan just for the plan’s sake. You never plan to run yourself into a brick wall over and over.

Instead, understand that the plan relates long term to short term, sales to costs and expenses and cash flow, marketing to sales, and lots of other interdependencies in the business. When things change — and they always do — the plan helps you keep track of what affects what else, so you can adjust accordingly.

Change does not undermine planning; actually, planning is the best way to manage change.

So running a business right requires minding the details but also watching the horizon. It’s a matter of keeping eyes up, looking at what’s happening on the field around you; and eyes down, dealing with the ball – both at the same time.

Business planning manages constant change

Which reminds me that dribbling is one of my favorite analogies for business planning. In soccer or basketball, dribbling means managing the hand-eye or foot-eye coordination of the immediate detail while simultaneously looking up and watching opponents and teammates, and developing plays. When I was coaching kids in soccer, I’d try to help them remember to look up and not just down at the ball. The best players did this naturally. Change does not undermine planning; actually, planning is the best way to manage change.

Here are a couple of additional ways dribbling is like planning:

  1. Dribbling is a means to an end—not the goal. Planning is like that too. It’s about results, running a business—not at all about the plan itself. Good planning is measured by the decisions it causes. It’s about managing, allocating resources, and being accountable. I’ve written this in several places: “You measure a business plan by the decisions it causes.” And this: “Good business planning is nine parts execution for every one part strategy.”
  2. Think of the moment when the player gets the ball in the wrong end of the court or field. That’s either a defensive rebound in basketball, or a missed shot on goal in soccer. The tall player gets the basketball and gives it to the one who normally dribbles up court. Or the goalie gets the ball and gives it to a defender. At that moment, in a well-coached team: 1) there is a plan in place  and 2) the player knows the plan but is completely empowered to change it instantly, depending on how the play develops. Business planning done right is very much like that. The existence of a plan—take the ball up the side, pass to the center—helps the team know what ought to happen. But changes— the opponents doing something unexpected—are also foreseen. The game plan doesn’t lock the players in to doing the wrong thing or failing to respond to developments. It helps them make instant choices, changing the plan correctly…and when they do, the other players can guess the next step better because of the plan.
  • Creating a separate plan for change should be done. I think it is better known as Disaster management.

    http://www.noobpreneur.com

    • Thanks Aira. To my mind, change is constant, and planning is planning for constant change. Disaster management might also be a good idea, but I don’t think that substitutes for planning for change.