Business Plans Don't Deliver?

The Wall Street Journal asked "Why Don't Business Plans Deliver" in a June 22nd article. In general, they found the state of business plans to be rather dismal. I can't disagree with that especially when we're talking about the business plans of small business. Small businesses tend to rely far too much on platitudes, ambiguities and a tendency to avoid adequately addressing those areas that require real thought and research. But this isn't about business plans. In the "For Further Reading" section Keith R. MacFarland stated, "The strategic planning model is due for a new release, one that enables companies to keep pace with changing environments, quickly create and adapt strategy, and empower people throughout the organization to make effective choices. I couldn't agree more.

The "Strategy Paradox" (Michael E. Raynor) points out that sometimes commitment to the best strategy results in the most abysmal losses. Witness the Sony Betamax and Discman. Good strategy meet with better strategy and once again validated Von Clausewitz's law.

Historically, and to a great extent rightly so, business schools have taught, develop a strategy through a stringent process, be happy with it and ride it to the end. They allowed for once a year tweeking but by and large you were expected to live or die by your strategy until the company's strategic plan became little more than something to look pretty on a shelf.

In order to succeed you have to have a viable strategy that drives the decision process and eliminates or reduces choices that don't fit the company's business model. This implies application of the rigor that befell Sony. So, in order to succeed your strategy needs to be caste in jello so that you can always explore every option and debate every decision. That won't work either since, as they always say, if you don't know where you want to go you're liable to end up anywhere. While you're debating every decision opportunities will pass you by, not to mention your competition.

What's a owner to do? Loose opportunities that fall outside rigorously set boundaries or loose them to a decision process that is still debating where you want to go when the opportunity that will take you there whizzes by? How about peripheral flexibility?

Knowing what tomorrow looks like today is impossible. Randomness and the Black Swan is always a factor. Designate an individual or form a small group (or a consultant) whose job it is to continuously survey all the things that effect strategy and develop contingencies to mitigate risk and prepare for potential changes in the market. In other words:

1. Anticipate the ever evolving future and decide on the most likely scenarios.
2. Formulate responses to the mostly likely scenarios.
3. Determine the delta between the resources needed to meet today's demand and those to meet the future.
4. Identify source to supply the required resources.
5. Continually review, amend and readdress the portfolios of options so they may be activated as necessary.