The Business Plan . . . MIA (missing in action)

The Business Plan . . . MIA (missing in action)

The business plan provides a kind of map or battle plan for the marketplace. It also validates a company, proving that it has a reason to exist. That’s a scary thought which might help explain why so many organizations operate without one.

Not long ago a textile manufacturer ceased operations for that very reason. For years it struggled in the tough upper niche market that required high fashion, small runs and quick turnaround with rather antiquated machines requiring a full 12 hours for a changeover. Competitors with newer, faster machines could come into the market and gain an instant advantage. In the end, the company could not afford the new technology nor could it change markets, so it perished.

Surprisingly, many companies don’t even know what advantage they have over the competition. They simply float along, content to be in the middle of the pack. “We’re no worse than anyone else” is how author Tom Peters described this thinking.

The Invisible Plan
Many companies say they have a plan but it isn’t on paper. Often it exists in the head of the company founder and driving force. But when this visionary person dies or retires, the plan is lost. For other companies, the plan is communicated by a sort of oral tradition (“tribal knowledge”). But ask people in the company to articulate and you will get many different versions.

The Flawed Plan
Large companies often have a business plan but it is so bulky it is hard to execute. Created by the strategic planning department, it is the size of a phone book and no one reads it. If a business plan weighs a pound or more, chances are it isn’t worth the paper it is printed on.

A plan may be packed with too many goals or missions. If a company hopes to accomplish fifteen goals, what are the chances of success? Two or three well thought-out goals make better sense. The saddest plan is one with missed opportunities. A hidden or untapped market may be just waiting for the company to take advantage of but the architects of the plan lack the vision to spot it

Why Most Companies Don’t Have a Plan
The day-to-day operations of business commands so much time most firms can’t spare the time and manpower necessary to create a good plan. Those that do attempt it find that it is a prickly challenge. Companies may not be ready to face the really tough questions required. For example, if quality is the cornerstone of the company, why are production workers paid for quantity and not quality? If service is truly what the company was built on, why do employees in the customer service department treat customers like the enemy?

Elements of a Good Plan
A good plan is created with a realistic analysis of the market combined with a hard look at the company’s strengths and weaknesses. What does the company do best? What differentiates it from the competition? Next comes focus. A smart plan leverages company strengths and eliminates the unnecessary. This may mean taking the ax to a product or a division even if there is great sentimental value attached to it. Once it is determined how a company should attack the market while doing the things it does best, the final piece is to spell out how each department can support it.

For those companies with the courage to hammer out a solid business plan, the rewards can be great. First, the firm will probably have something most of its competition does not. Second, the company will focus its energy and resources in a single direction, creating a much more powerful organization. Armed with a well-conceived game plan, the company will maximize its chances for success in the marketplace.