The Business Planning Paradox
Some years ago I sat on the Australian board of a major US consumer goods company when the news came through that our regional boss in the US had retired and was been replaced by a newly retired US Army General with no business experience – imagine our misgivings!
Our new boss, let’s call him “Bud” arrived in Australia three weeks later to sit in on the presentation of our revised and much changed 5 Year Strategic Plan. He sat patiently through two days of presentations, projections, detail and the final summary asking pertinent questions and seemingly agreeing with our logic and direction.
On the third day, in our windowless board room, he kicked off the questioning by asking me “Son, how much faith do you personally have in this plan, would you bet your career on it?” I was confident in our team’s research, logic and the plan presented so I answered in the affirmative with: I am confident Bud and yes I would bet my career!
“Son I am saddened because you must be a lot dumber than I was thinking” was Bud’s response!
This was a bit of a downer to say the least. Bud continued:-
“Son I served in supply in Vietnam can you imagine starting your day at 5.00am not knowing where your troops were going that day, or how many would be alive or wounded that night, but knowing that wherever they were they needed mess tents and hot food, field hospitals, beds, fuel, ammunition, and vehicles to replace the damaged ones and if I let them down I let America down”
“Now Son my enemy was a lot harder to handle than your “competitors” so how helpful would a 5 day plan never mind 5 years have been to me?”
I assumed this was a rhetorical question and asked Bud just how he did plan his supply chain – I was incidentally impressed by the complexity of his logistics.
Bud’s response was to answer “Son I’m asking the questions today so let me ask you this; how far can you turn your head to each side?” around 90° each way, I answered, about 180° in total. “And how far can you lift and lower your head?” mmm, around 90° degrees each way “BULLSHIT!” he roared “you are very lucky if you can get a true 170° and let me tell you problems will come at you from 360° and spherically so better be prepared!”
I may have made Bud sound like a difficult character, he wasn’t, he was different and we became friends and remained so for many years.
He had developed his famous 4 point plan to “Succeed in Everything” and here is the paradox: it was potentially an 8 Point plan! Let me explain:-
“The 4 point Plan to Succeed in everything”
a) Develop a detailed written plan
b) Don’t be too “stuck” to your plan
a) Calculate, Calibrate & Measure everything
b) Don’t be bound by numbers, always look beyond
a) Constantly seek information, input and advice from others
b) Follow your own heart & instincts
a) Delegate wherever possible
b) Always retain control
Developing a detailed plan of where you want to be and how you plan to get there is to me absolutely essential to good management. Done well it involves bringing the whole team together to focus on the challenges and opportunities facing the organisation and the plans progressive development forces you and your team to think through each point, to question, determine and build a strong team vision.
Don’t be too “sticky”! I like to think of a plan as a road map to guide us from point A to point Z, a very useful document without which many long journeys would fail. However if along the journey a bridge has collapsed or the mountain pass is blocked by a slide we have to put the map to one side and handle the blockage. So it is with business plans!
Calculating & Calibrating: Peter Drucker said “What’s measured improves” and I am a huge Drucker fan. I am a bit of a numbers nut, I find spreadsheets akin to soothing pictures; when I sit down to review a business I enjoy dissecting the market, the innovation, the competition, the costs, expenses, cash flows and projections…….they can all be reduced to numbers and measured.
There is also a common corporate condition known as “Analysis Paralysis” this is the stage at which you can no longer see the wood for the trees. KPI’s are great but they can hide the bigger picture, so step back occasionally and look beyond the numbers – you may be surprised by what you see.
Seeking information, input and advice from others has long been a hallmark of good leadership and a strong indicator of an organisations culture and attitude. Until we strive fully understand every aspect of the market in which we operate, our relative position within it, our products relative positions within it, our financial position within it and the markets overall direction, wants and needs we are operating an incomplete structure, perhaps one lacking a vital component.
A strong CEO or leader asks many questions in meetings or planning sessions but is careful in placing forward their views; they listen to, consider and weigh the advice, they read through the detail of market and financial analysis and then make an effective decision based upon their experience and their heart or gut instinct. This is what makes them leaders.
Delegation is another common denominator of strong leaders. Delegation not only provides leaders with more time to lead but it empowers subordinates whilst building their leadership and the organisations culture. It’s a wonderful, internal win-win!
A really good leader delegates on an 80/20 principle which I call “Loose, Tight, Management”. In effect 80% of decisions are safe, that is if the wrong decision is made it’s not life threatening to the Corporation but 20% of decisions are crucial and by keeping control over this 20% you always retain control of the whole.
A strong leader never criticises a poor decision or a failure arising out of delegation, these are valuable lessons for subordinates and each lesson well-handled builds the person and enhances the corporate culture.
The lesson I took from Bud was that there are few if any absolutes in an ever changing world and that the key to good planning is to understand exactly where you want to be whilst retaining the flexibility and the ability to change to adapt to changed needs and conditions.
The lesson was well taught and conveyed and as a consequence planning improved, I improved and the corporation improved and that is what “A Plan to Succeed in Everything” should deliver.
By, Neil Steggall
The Barking Mad Blog
Business Advice with Bite