By Goke Ilesanmi
Planning is very critical to business success. So also is strategy. In short, these two words are believed to be interchangeable or at least go together like Siamese twins. Little wonder that we have the phrase “strategic planning”. What is a business plan? A business plan is a formal document that articulates the direction of a business in a bid to accomplish its most important goal, that is, profitability. Profit does not come by accident.
So by writing and following a business plan, you can definitely increase the possibility of achieving profitability. Whether you want to start a business or grow one, attract investors or obtain a loan, attempting to do it without a well-composed business plan is like a stranger going to a place without prior direction. Or better still, it is like a ship without a rudder (which controls its direction). Let me also illustrate it as a motivational speaker. It is like having a dream without an action plan. The dream cannot become a goal that can be achieved.
To be successful in business, you need to research and write your business plan; master the key components of a successful plan; understand all your financing options; and streamline the process using easy-to-use templates.
A business plan is used for many purposes, that is, as a development tool, a management and planning guide, a mission statement, a sales document, etc., and is read by several different audiences. Therefore, you need to structure the components of your business plan for the greatest impact; anticipate all questions that business plan reviewers will ask; and critique and package your business plan for winning results.
Balanko-Dickson, a third-generation entrepreneur, Licensed Professional Business Coach and founding member of the Professional Business Coaches Alliance, who has clients throughout Canada, the United States, South Africa and the United Kingdom says developing a detailed business plan will provide you with an opportunity to shape a powerful business development strategy. He stresses that a business plan has an equation structure of Goals + Research+ Strategy.
In what seems like a contrary and paradoxical view, Roger Martin, dean of the Rotman School of Management at the University of Toronto, Canada and author of Playing to Win: How Strategy Really Works, says, “I must have heard the words we ‘need to create a strategic plan’ at least an order of magnitude more times than I have heard ‘we need to create a strategy’. This is because most people see strategy as an exercise in producing a planning document. In this conception, strategy is manifested as a long list of initiatives with timeframes associated and resources assigned. Somewhat intriguingly, at least to me, the initiatives are themselves often called strategies. That is, each different initiative is a strategy and the plan is an organised list of the strategies.”
Martin says strategic plan of this sort is not different from a budget. He stresses that many people with whom he works find it hard to distinguish between the two and wonder why a company needs to have both. Martin adds that he thinks they are right to wonder this way.
In his words, “The vast majority of strategic plans that I have seen over 30 years of working in the strategy realm are simply budgets with lots of explanatory words attached. This may be the case because the finance function is deeply involved in the strategy process in most organisations. But it is also the cause of the deep antipathy I see, especially amongst line executives, toward strategic planning. I know very few who look forward with joy to the commencement of the next strategic planning cycle.”
We need to break free of this obsession with planning if must make strategy more interesting as well as different from a budget. Strategy is not planning — it is the making of an integrated set of choices that collectively position a firm in its industry so as to create a sustainable advantage relative to competition and deliver superior financial returns, argues Martin. He adds that once this is made clear to line managers, they will recognise that strategy is not just fancily-worded budgeting and they get much more interested in it.
The fact remains that it is difficult to execute a strategy without initiatives, investments and budgeting. But Martin is quick to add that what you need to get managers focused on before you start on those things is the strategy that will make these initiatives coherent. “That strategy is a singular thing; there is one strategy for a given business — not a set of strategies. It is one integrated set of choices: what is our winning aspiration; where will we play; how will we win; what capabilities need to be in place; and what management systems must be instituted?” he submits rather rhetorically.
That strategy guides you as to what initiatives are sensible and capable of producing the desired result. Martin says such a strategy actually makes planning easy. There are fewer fights about which initiatives should and should not make the list, because the strategy allows you to easily determine what is important or not. According to him, this conception of strategy also helps define the length of your strategic plan.
There is no disputing the fact that this paradoxical analysis and definition of strategy can be rejected by those who have spent all their lifetime developing traditional strategic plans, especially that there seems to be a thin line of meaning between planning and strategy as explained by Martin.
Till we meet on Wednesday.
GOKE ILESANMI, Managing Consultant/CEO of Gokmar Communication Consulting, is an International Platinum Columnist, Certified Public Speaker/MC, Communication Specialist, Motivational Speaker and Career Management Coach. He is also a Book Reviewer, Biographer and Editorial Consultant.
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