Why is Business Planning So Difficult?
By Eric A Denniston, Managing Director, Denner Group International 2-20-2-13
Takeaways: Business planning requires strategic thinking and analytical thinking skills. It’s important to understand the difference between the two. Best practices include having clarity about where your business is going, keeping the planning process simple, and involving your staff in the planning.
Nearly all small businesses struggle greatly with most everything having t
o do with planning for their business. The most obvious obstacles are the basic resources of a small business: time and money. I have no doubt that the two most overlooked obstacles to business planning are the lack of management commitment to planning and the lack of skills in planning. Planning skills are not a subject generally taught in school at any level but perhaps graduate degrees and beyond which mystifies me.
So much really good material has been produced about best practices in business planning but it’s not emphasized enough. If you, dear reader, agree with me, read on. If not, you may be among the few who are well-practiced in the disciplines, skills and arts of business planning.
Discipline and Concentration Required
Most small business owners, naturally, wear many hats. This has the effect of preventing one from devoting the discipline and concentration to actually doing the planning, and much more importantly, to establishing the processes and structures to support the execution of those plans. So, what can business owners and managers do to effectively and efficiently introduce profitable planning activities to their organization?
First, I suggest you recognize that planning skills are learned mostly through practice. However, in addition to courses at your local colleges, a great resource is a local or online consultant that can also more easily tailor some instruction to your needs.
Second, also recognize there is a learning curve that might delay your progress in planning. This you can overcome by hiring a consultant to facilitate some planning sessions for you. The big advantage here is that you can learn along the way. A good consultant trains and coaches you through the planning process so you and your staff can build the skills your organization needs.
Third, become serious about having discipline in your planning programs. Keep it simple at first, but plan on building your programs to an optimal level for your organization. When you set schedules for planning meetings, stick to them. If you don’t, you are telegraphing to your staff that planning really is not that important to you as the owner or manager. And insist on attendance at the meetings. Make it part of staff evaluations to participate in planning meetings.
Best practices to implement immediately
> Gain clarity on the distinction between strategic planning and operational planning. Strategic planning is creating a Vision and a Mission, defining the values that guide the organization’s behavior, and determining what positioning the business wants to have in the eyes of the customer, not in your eyes. Strategic planning is also about laying the general route of the journey the business is on to reach its vision, defining the key success measures you will use to know you are still on track. It is about having clarity on where the business is today and what its strength and weaknesses are. It is about defining the core strategies you will follow and the key action items to implement to achieve the vision. And finally, it is about constantly scanning the external future environment your business operates in to better address the changes you’ll have to make in the future on your way to your vision.
By contrast, operational planning is concerned with the tactical issues of running a business. Budgets, meeting schedules, action plans to support the strategies, setting policies, defining roles and tasks, outlining market segments and pricing, hiring, firing, advertising, etc., all are part of your operating or business plan.
Recognize then, that you should have two separate plans – a strategic plan and a business or operating plan. And develop them in separate sessions, with the strategic plan first. Also, more importantly, recognize that each planning process actually involves thinking very differently. This is a distinction that schools should teach.
Most of our schooling is in how to think analytically or tactically, therefore, we are under-prepared to think strategically or systemically. This means we need to make sure we build up our strategic thinking skills. Much has been written about this so you can search the internet for books, articles and courses on this. But, you can also learn while you do the work, which often is the most productive way to do it. Consulting firms like ours help you do just that.
> Another best practice is to keep it simple. Just the idea of a planning session will make most business owner and managers roll their eyes as they think of how of their employee’s time is tied up in doing this. A carefully laid out plan that accounts for how your business and employees must operate is an important factor in efficient planning. The skills a consultant brings can help enormously. Don’t be afraid to ask for help. I have yet to find an entrepreneur who did it all himself or herself. They found good help along the way so don’t be bashful about asking for help.
> A third best practice in keeping it simple is to use a framework tool that I know works in all sizes of organizations. Called the EABC model for planning developed by the Haines Centre for Strategic Management, this model has you answer five questions in this specific order:
- What are your desired outcomes – your future desired state?
- How will you know you are on track to reach them?
- What is your current state, which can easily be achieved with a SWOT analysis?
- What do you need to do to bridge the gap from where you are today to your future desired state? and
- What will be occurring in the future that will affect your achieving your future desired state?
If you would like a free copy of this model, please visit our website to download a copy.
Best practices in planning also include an understanding of the time required to draft a plan. And don’t forget, the time to establish the structures and processes to make sure the plan(s) are implemented or executed. Too often, once a plan is drafted, nothing happens because this crucial step is overlooked or ignored. We actually recommend a brief,initial “Plan to Plan” session to set the stage for success before you implement. This allows you to identify the personnel, financial and time resources required to truly achieve a successful planning program.
If you are conducting your first strategic planning process, I recommend two full days in an environment that eliminates distractions. A retreat is a good idea, but what is important is not being distracted. A good, experienced facilitator can make this happen in one day but what will be missing is some training for the staff on the planning and implementing processes and structures required.
Also, be inclusive with your staff. Let them know what is going on and be prepared to involve and engage them in the planning process. Again, an experienced facilitator can be very valuable in coaching you on how to engage staff, keep them informed, and on what to engage them in.
To wrap up, let’s remind ourselves of some key practices in planning.
- Set a schedule and stick to it.
- Be inclusive and keep people informed.
- Build planning skills any way you can.
- Understand the distinction between strategic planning and operational planning and do them separately using the appropriate way of thinking.
- Establish the structures and processes to ensure your plans are executed and measured efficiently.
To speed up or simply make the planning happen, don’t be bashful in asking for help. A few hundred or thousand dollars for a consultant’s help could mean 10 to 100 times return on your investment, and likely more engaged and productive employees in your organization.
