Half the respondents to a survey we completed 11 months ago said they thought they would miss their goals and expectations for 2010. But many also said they had used a structured planning process.
So they invested time and energy in planning but still didn’t get the results they wanted.
Why is that? I’ll give you 3 reasons – and then 2 vital questions to ask yourself.
1. Not enough digging.
All plans are based on assumptions. The gap between what was intended and the reality that develops is determined by how strong or weak those assumptions are. And that is a function of the amount of relevant information collected before the assumption is made.
Many owners, executives and managers don’t dig deeply enough for information.
For example they’ll use anecdotal feedback from their sales force rather than ask key customers the 6 simple questions. Or they’ll accept spec sheet data for a piece of production equipment rather than get users’ experience with capacity and downtime.
The strength or weakness of an assumption is also determined by how rationally the planner applies the information collected. And their ability to do that is a function of their experience in similar situations.
2. Not enough detail.
The business owner often has goals with more stretch in them than the management team. So reaching agreement on sales and profit targets can absorb a lot of time and energy.
As a result there’s often too little effort given to thinking through – in detail – the impact of success on other functions – e.g. operations – and resource requirements e.g. IT systems, cash to fund growth.
But by not dealing with detail during the planning process an owner and management team are creating the surprises that will come back to haunt them during the year.
We live in an age where the external environment e.g. – the economy, an industry and competitors – changes more quickly than ever before. That means detailed thinking about which processes and functions can be adapted, how that would work in practice and which situations might trigger the need to be flexible.
Make this part of the planning process to take surprises out of the year ahead.
3. Not enough linkage.
One of the reasons plans fail is that there is no linkage to implementation.
Perhaps it’s because by the time the digging and detailed thinking are complete exhaustion sets in.
Most companies start well – by figuring out what they have to do to close the gap between where they are now and where they want to be in 12 months’ time.
Some express these action steps in loose terms. Taking time to frame them in SMART (specific, measurable, achievable, written and time related) terms makes it easier to understand and assess the impact of doing them.
Many companies falter at this point e.g. although the sheer volume of things to be done can be overwhelming they try to complete them all. Instead the action steps have to be prioritized and individuals made responsible for completing the top 6.
To complete linkage there has to be regular follow through e.g. quarterly and the plan adapted – e.g. goals, action steps, processes and functions “flexed” – as a result of what actually happened during the quarter.
Those 2 vital questions to ask yourself…
- “Based on past performance, am I sure that the planning process we’ve just completed/are completing will actually deliver the results we want in 2012?”
- “Why would I continue to use a planning process that doesn’t work when I won’t tolerate an unproductive employee or piece of equipment?
Answer them honestly, make any required changes and 2012 will be the year when your Plan delivers the results you want.
For the past 12 years, Jim Stewart has worked with entrepreneurs and business owners who want to increase profits and improve the value of their company – and a number of the companies with whom he has worked have received Business Achievement Awards. As founder of ProfitPath (http://www.profitpath.com), he is a TEC Canada Trusted Advisor.