Some would argue that in a dynamic and disrupted business environment business planning is no longer relevant. Events simply move too fast for any plan to be worthwhile.
Indeed, many successful high growth businesses never had a plan. Does this prove that planning is unnecessary, or even counterproductive? Or are these the high-profile exceptions that overshadow the failure of others?
Planning Delivers Higher Growth
According to research by Cranfield Business School companies that carry out business planning enjoy a 30% growth premium compared to those that don’t. These are also the businesses that are more likely to survive the critical first five years.
Of course, in business nothing is as simple as: write a business plan and you’ll grow 30% quicker. There are three significant conditions that have to be satisfied. First, your plan has to be fully in tune with your market. You can’t simply plan to grow sales of a product by 30% and expect customers to fall into line.
The demand has to be there, or at least be capable of being created. You must have a unique proposition or be perceived as delivering added value. One way to look at it might be to question: why do we deserve to get these extra sales, rather than our competitors?
Implementation: the Action behind the Words
A plan without action is a daydream. The second essential element of any plan is to translate stated goals into the day to day actions that deliver the desired outcomes. Many plans fail, not because they are bad plans or based on bad products, but due to poor implementation.
The way to drive the right actions is to concentrate on measuring and reporting results, not tasks. Everyone is then focused on what is being achieved, rather than what is being done.
Tracking: the Reality Check
The third condition is that your plan must be dynamic. Market conditions will change. As you implement the plan you will learn. Some of your assumptions will prove to be flawed. There may be opportunities you didn’t spot. Buyers and their behaviour will evolve and firms have to adapt with them to stay relevant and keep adding value.
Executing a dynamic plan means that you have to track. Were your assumptions valid? Did your marketing activities perform as you expected? What worked best and why? Which elements of the plan do you need to modify? Is your perception of value really shared by your customers? Is the ‘voice’ of your brand one that customers find appealing?
Minimising the lag between understanding the ‘actual’ and comparing it with the ‘planned’ is the key to preventing potential sales and growth from slipping away.
The question isn’t whether or not a plan is worthwhile, it’s whether it is grounded in reality and whether you have the tracking mechanisms to modify it as you go. Perhaps it’s less about having a plan and more about incorporating planning and tracking into your everyday business routines.
For more information on how to realise 30% performance gains for your business contact us on 01823 429339 or visit our website.
