Real Business Planning Thrives on Uncertainty

How do business plans and business planning relate to maps and navigations and getting somewhere? What about the difference between a business plan, business planning process, and extensive planning? Agile Planning

Why would you care? Consider this quote:

That is not to say entrepreneurs don’t have goals, only that those goals are broad and—like luggage—may shift during flight. Rather than meticulously segment customers according to potential return, they itch to get to market as quickly and cheaply as possible, a principle Sarasvathy calls affordable loss. Repeatedly, the entrepreneurs in her study expressed impatience with anything that smacked of extensive planning, particularly traditional market research.

That’s quoting Leigh Buchanon in How Great Entrepreneurs Think on, who is writing about Prof. Saras Sarasvathy, of the University of Virginia’s Darden School of Business:

Brilliant improvisers, the entrepreneurs don’t start out with concrete goals. Instead, they constantly assess how to use their personal strengths and whatever resources they have at hand to develop goals on the fly, while creatively reacting to contingencies.

This, in contrast to corporate executives, who …

… use causal reasoning. They set a goal and diligently seek the best ways to achieve it.

I’m an entrepreneur. I love the idea of effective vs. causal reasoning, and I’m (like most reformed market researchers) as impatient as anybody with market research. But for me the most interesting word in that first big quoted paragraph above is “extensive,” as in extensive planning. To me, extensive planning is the overuse and exaggeration of the formal business plan document. It’s analyzing forever without moving forward. And, even though I’ve been a professional business planner for 30 years,I agree. I’m impatient with that too.

But I also believe totally in planning as process, as in my own plan-as-you-go business planning, which is simple, practical, effective, and flexible.

And as for market research, I mistrust it. Not that I don’t like to guide decisions with information, but research seems to take on a quasi-biblical degree of certainty that gets in the way of judgment. People don’t realize how much research depends on the assumptions and the underlying quality of the implementation, so even unsound research conclusions become impossible to question.

Plans should be just big enough to run the company. You have to learn to live with uncertainty, plan with it, love it, and manage it. You can’t research your way out of it. Not in the real world of entrepreneurship.


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