Do you have a business plan? Do you update it annually? How far ahead does it run? One year, five years, 10 years? If it’s only one year, then it’s not a business plan, it’s a budget.
If you’re reading this, you are probably doing at least some planning – perhaps a daily meeting, or a weekly or monthly get-together to decide who needs to do what by when.
These are essential activities, but it’s fairly easy to see what will happen in the day, week or month ahead. When you try to look further ahead, things get murkier. Yet it’s the decisions you take for the longer term that can make or break your business.
In Selling the Invisible, Harry Beckwith has some useful insights on the process of planning. For a start, he says, good planning rests on three things: predicting the future, knowing what you want your future to be, and devising ways of getting there. But all are pretty shaky!
The future is unpredictable
People cannot predict the future. They get it wrong all the time, even over the short-term. A freak hailstorm might destroy your orchards, for example. Then there are economic factors such as inflation, the exchange rate and so on – all of which can change in unexpected ways. When it comes to trying to predict future habits and preferences, gross errors abound.
What really happens
As an example, Beckwith cites the once widely held view that more and more people would be working from home. It has never happened. The experts who predicted this shift failed to recognise that work performs an essential a social function. Most people want to be at work.
Or take the prediction that television and Kindle were supposed to kill books. Wrong again. Bookshops are booming.
Experience has proven again and again that no matter how well we do the research, widely-held views of the future will be wrong.
There is only one way to deal with this incontrovertible fact: plan for several possible futures. You don’t only need a Plan B; you need Plans C, D and even E.
Does this mean you shouldn’t plan? Not at all, says Beckwith, but it’s important that everyone involved in the planning exercise appreciates a few things.
Firstly, understand the limitations of planning. Don’t expect to come up with a plan that will faultlessly point the way to the future. It won’t. You need a sheaf of plans.
Secondly, realise that the greatest value of the plan is the process – the thinking that went into it. All those involved will have gained perspective, and be better managers for it.
Thirdly and most importantly, “Don’t plan your future. Plan your people”. By having outstanding people in your team, you will drive towards your shared vision without necessarily following the ‘plan’ blindly, but by applying their skills.
