Does Everyone Know Where You’re Going Now?
Best practice of the week: 1.5.1 Business planning
The pandemic is causing organizations to respond to huge changes and uncertainties in demand, supplies, and workforce. Does this mean it’s a waste of time to plan? Au contraire! Business planning discussions are the only way to be prepared. Even a simple 12-month cash flow projection will guide decisions about risks, investments, vendor contracts, etc. Confidence is strengthened even by broadly identifying what is not expected to be different as well as what’s going to change.
THE CENTER’S BEST PRACTICE OF THE WEEK: 1.5.1 Business planning
Definition of business planning: “Creating and communicating the small set of goals that inspire everyone.”
Business plan format (See The Goal Tree in The GMs Toolkit for a 1-page tool)
- Business concept – purpose, 5-year look, picture of success
- Operations – basic workflow, production trends, quality targets
- Market research – industry, segments, customers, company advantages, regulations
- Product line – products/services, pricing structure, product lifecycle
- Marketing and sales – markets, channels, types of communications (direct, public relations, advertising)
- Research and development
- Financial projections – revenue streams, cost structure, cash flows
3 Good Questions (discuss in a management meeting)
1. How well does today’s plan serve the owners’ personal goals?
2. Does our plan clarify what we're not going to do?
3. What planning should investors and directors expect?
One powerful technique for quickly updating your plan is to run a 2-hour “question discovery” session with the management team. Brainstorm all the questions you have about your organization’s future: the key rule is only record the questions—no answers! Then outline the questions using the structure of The GMs Index, the universal language of management. Then get agreement on the top six questions. By agreeing on the questions instead of debating positions, you’ll see just where you need to head: to keep straight on or make a course adjustment.
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The Center for Management Terms & Practices is the standards body for general management. CEOs can delegate with confidence if managers in every department are using the same best practices, language and tools. See The GMs Index and The GMs Toolkit.