The problem with most plans is this: there aren’t any.
This is the case among many technology SME companies operating in Silicon Valley. To be sure, every one of them has spreadsheets that depict the rise (nothing seems to fall) of sales, resources, share and profit over time.
But, when a CEO is asked, what are you doing that will cause sales to increase by 25% next year?, the response – to this, and follow-on questions – often points to a familiar theme: the “plan” is what results if the quantitative assumptions embedded in the spreadsheet hold true. The spreadsheet is the embodiment of assumptions that the sponsoring VCs deem both reasonable and achievable.
(It doesn’t take insightful questions to arise at the core problem. The fact that a CEO has me in her office suggests that a well thought-out framework is either not in place or, if it is, then it isn’t working.)
Don’t get me wrong. These CEOs are not unintelligent people. They are sharp, skilled, and committed. But they are often required to be so focused on the financial numerics of the enterprise that the underlying raison d’être of the firm, and the things that cause markets to respond, receive second billing.
Assumptions ain’t all they’re cracked up to be
Alas, assumptions do not plans make. Assumptions are merely statements about future conditions that, for the purpose of simplifying planning, are held constant over some reasonable span of time.
To really understand what’s at the heart of a plan is to talk to those who have to implement it. Get two levels down from the CEO, and the answers to the request, please describe the company’s plan in your own words, typically span a range of diversity that covers most strategies one could imagine for an industry.
When in doubt, Go like Hell towards all points of the compass
The most succinct rendering of a plan I’ve yet heard – yet typical of what many employees often convey – is this:our strategy is to go like hell in as many different directions as we can manage, figure out the ones that pay off, then focus on those. No kidding. There is no exaggeration here.
The numerics serve as both goal and yardstick. There is always an underlying sense of how people will go about getting there, but seldom does one get an impression of it being orchestrated, rehearsed, and executed. Yet again, it is typical.
I often imagine it as people in boats trolling for fish in a lake. Dozens of boats with motors quietly humming as they troll, fishing lines in the water, waiting for a strike. Someone yells, I got one. Upon hearing this, the rest of the boats crank up their engines full throttle and head in that direction. Within minutes there are dozens of boats trolling in the same area, at risk of fishing lines crossing, yet all joyously confident that their odds of catching fish have increased.
It Doesn’t have to be this Hard
Good planning is hard work. But it saves even more hard work in its execution. Successful companies that grow large and profitable understand their markets, their competitors, the environment in which they operate, what is in their control and what is not. They commit resources long term, i.e strategy, purposefully and with the knowledge of the outcomes that will be yielded.
Spreadsheets are merely quantifiable expressions of what the business sets out to do as a result of its plan. Spreadsheets are to a business plan what sheet music is to a composer. They capture the product of intellect, but they are not a substitute for it.
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