Why Planning is Essential

I know someone who has recently started to work on the North Sea wind farms – you know, those semi-autonomous territories parked out of sight and hearing that are supposed to provide us with energy for the future.  When they told me that the maintenance programme involves filling the turbines with significant amounts of diesel on a regular basis, and it being done from a giant floating hotel-cum-gas-tanker, I started to wonder how the operating plan for these wind turbines works.  It feels intuitively mad to me that we are burning thousands of litres of diesel in order to produce carbon neutral fuel.  How on earth does that work?  Then I got to reflecting on the fact that none of us has ever seen a business plan or model for these turbines, even though our taxes are paying for them.  I had a bit of a grump at that stage.  However, it made me think about the whole business planning/operating plan process and reflecting that many businesses across the country will be starting that very same process around about now, if they are wise and lucky.

The fact is that many businesses now have either strategic planning departments or a planning lead who invest their time in working out the future direction of the business.  However, I think it is fair to say that there is widespread and evident disappointment across many businesses that these strategies are either slow to implement or simply do not get implemented.  I think the least we can say is that a strategy is easier to conceive than execute.  I often detect a degree of cynicism amongst business owners towards new strategies, almost as if they are discounting the claims made within a plan and doubling the projected costs to try and arrive at a realistic projection of the impact.  However, what they rarely seem to do is to factor in the impact of previous strategies and how the baggage left behind weighs directly upon either the planning process, its execution or both.

In the finance world there is a recognition of the impact of previous actions, as demonstrated in the incremental budgeting versus zero-based budgeting approach.  I am contending here that we need to recognise there is a similar issue within business planning and operating plans and proposing an approach that can be the equivalent of a zero-base approach.

The first step I take in this process is to set a strategic goal, a major objective that will endure through multiple planning processes.  It is a goal that is aimed for and worked towards, that sets an aspiration for the business and is strategic in so far as it sits above the day-to-day business targets. When I think about this strategic goal, I invariably see it in terms of the Rock, with the Rock, Gravel, Sand experiment many of us will remember from our schooldays.

Having established the strategic goal or rock, then I identify the strategic actions needed to realise that goal.  These are at a strategic level in that they deal with broad activities.  Invariably these will include a sales plan, marketing plan, systems plan, HR plan, finance plan, product plan, service plan etc, etc. I call these enabling strategies and think of them in terms of the gravel within our Rock, Gravel, Sand experiment.  For me it is important that each of these enabling strategies has an owner, an executive level champion who will take ownership for every activity within that strategy.  I also believe it is essential that each enabling strategy is agreed within the executive team, again in order to create ownership of, and by extension increased commitment to, the plan.

The third element, or the sand within our school experiment imagery, becomes the workstreams within each of the enabling strategies.  It is literally a detailed map of the planned activities for the coming year, product launches, system upgrades, marketing campaigns, sales drives.  The idea is to create a high-level plan of action that is instantly referrable and trackable.  If you have a marketing campaign planned for Q1, it is there together with its dependencies, both up and down stream.  If the product is not launched, then you have no marketing campaign, without the campaign you cannot have a sales drive and so on.  This approach is the ultimate in the ‘what gets measured, gets done’ philosophy.  Each activity has an owner, a time scale and a reporting structure. The structure effectively creates a set of small replicable actions that allow resource planning to ensure there are no choke points or hot spots, creates space for early intervention to get programmes back on track and the visibility necessary for Plan B’s, or even C’s.  My contention is that this structure is an action-oriented delivery structure.

As with the enabling strategies, each activity needs to be developed within the teams that will execute the activity.  Again, this approach creates ownership because teams are setting their own goals, their own deadlines.  If I set the goal, then I am providing a readymade ‘get out of jail’ card.  It is Nick’s plan.  But if the team set the goal, then it is their commitment, and the making of that commitment invariably results in a greater investment of time, energy and emotion in delivering it.  Essentially, we want to deliver our promises.

As with any plan KPI’s and reporting are essential, but in this model reporting simply becomes an extension of this high-level overview in that the items to be reported on are headlined in the overview and can be reported via a RAG (Red, Amber, Green) system on the dashboard allowing for drilldown into off-track activities.

The implementation of a quarterly review inevitably focuses on the workstreams and the addition of newly identified activities and/or the cancelling of activities that have been bypassed by a change on the business environment.  This system of reporting ensures that the plan is a ‘living, breathing’ document as opposed to a piece of shelf-ware that had its 5 minutes in the sun at the start of the year, then became forgotten in the hurly burly of business as usual.

What Can Go Wrong and How to Address It

One of life’s realities is that many people, even those in leadership and management positions do not like taking ownership for activities and results.  This can easily generate resistance and evasion.  However, you really do have to ask yourself whether you want someone in a leadership or senior management position who will not take ownership.  I have seen this in many medium and large organisations where managers form what I call the marzipan layer.  They close-down ideas coming up from the sharp end of the business that engages with customers and fail to share initiatives coming out of the leadership.  Allowing that kind of culture to flourish will damage the business.  It will almost inevitably fall into a position where people are more concerned about sustaining their role than they are about delivering an operating plan. 

Invariably the resistance comes in two phases.  First you get resistance to the actual planning process.  We are busy to the max right now; we haven’t got time.  That may actually be right, but an operating plan is an investment in the future.  So, accept people are busy, but ask them to give 2 to 3 hours, maybe even four in an evening session where you bring in a few beers and a curry and the team work on the Strategic Objective and Enabling strategies and provide the funds for individual teams to do the same on their workstreams.  You get planning and team building for a small investment.  Secondly you get resistance at the reviews.  There will be 101 reasons for actions not being completed.  In fact, you could be forgiven for thinking it has taken longer to come up with the reasons why not, than it would have taken to do it.  This is where ensuring the team build the workstreams comes to the fore.  This is a promise that an entire team has made to the business, what could, or would, stop you, fulfilling a promise, or at the very least flagging up you are not going to be able to keep the promise well in advance.

There is no denying an operating plan requires managing, but in managing the plan you build an understanding of, and feel for, the daily activities of the business.  For me it is feels like the equivalent of reading braille, I get to sense the irregularities in the patterns and can delve into them.

Faulty Perspectives

An operating plan weeds out faulty perspectives because the thinking is done as a team with members testing each other’s assumptions. 

  • A collegiate approach prevents sales from taking the approach of introducing new products to overcome a poor sales technique.  Reduces the risk of production deciding to improve profitability by filling out the product line.  The thinking is done up front. 
  • A collegiate approach harmonises competing demands and allows the sponsors to discuss and agree prioritisation.
  • A collegiate approach addresses any bias towards the status quo.  We are by nature competitive creatures and when part of a group we will invariably seek to set new standards, particularly when we are encouraging one another.  Overly risky ideas are sanitised by the team, and overly cautious approaches are challenged by the team.

Here are some of the benefits of corrected potentially faulty perspectives: -

Serious functional overload is avoided, a situation immeasurably preferable to after-the-fact remedial work.

Strategic shock waves can be contained, new products can be given their own team that has no allegiance to existing products and can objectively evaluate the potential.  They can assess any system needs without mentally adjusting for current workarounds.

Management focus can be applied to identified issues, surprises are prevented, and issues can be considered early and at the point of impact.

Strategy does not become a separate entity that lacks contact with the business.

Communicating the Plan – Start with Why

The best plan in the world is worth little unless the whole team is enrolled in its delivery.  Taking the co-creation approach to building the plan is a great start.  Communicating the plan to the whole team is an equally great way of shifting the plan from a thinking process to a doing execution.

If you think back to your own experience, I would imagine that you can readily recall times when you have been in meetings thinking ‘why on earth are we doing this?  We only launched a new initiative last quarter’ or something similar.  The key to embedding ideas across the team is to address the golden question – why.  You can see a brilliant explanation of this at with Simon Sinek.

Invest the time in explaining to the whole team why the strategic goal has been selected, how they can their play part in making the enabling strategies and workstreams happen and, arguably, most importantly, what they will feel when the strategy is delivered.  There may not be 100% agreement with the strategic goal, but if people understand why, then unless they are completely disengaged, they will accept it.

Then make sure you keep the team up to date with progress, this is readily done through regular team meetings if you hold them, a quarterly update on the operating plan.  Or alternatively a Business Update email that does the same job.  An easy-to-read email that reminds everyone of the strategic objectives together with a breakdown of progress on each of the enabling strategies, some detail around any remedial work that is being undertaken to get any delayed activities back on track and a report on the KPI’s to remind the whole team of the results from their efforts.

Rock, gravel, sand – A medium to long-term strategic objective, a set of enabling strategies that will deliver that objective, and detailed workstreams that allow you and the whole team to measure progress within each of those enabling strategies.

Cultivating an Ownership Mindset

A sense of ownership is incredibly powerful, because when we own things then we want them to be successful.  But to own something then we need to, at the very least, have played a part in making it happen.  We will rarely, if ever, have a sense of ownership over something dumped in our laps.  So, if we want to create a sense of ownership around our plans for the business how can we expect people to own anything that they have simply been given.  Co-creation is essential to creating that ownership.  Allow people to play a part in setting their own targets, determining their own objectives, because when they own them, they will invest greater effort, energy and enthusiasm in making them happen.

Hit the mark when you explain why.  Everything that we engage with creates a set of questions in our minds.  Invariably those questions boil down, in their purest form to words like – Where, When, What, How and Why.  The most powerful of those questions is why, because it gives us the reason, the rationale for the whole thing.  The others are important, but they simply explain the details that support Why.  If you agree with my thought, then I would ask you to go one step further and consider when you were last told why something is happening.  When you were invited to a meeting without being given any explanation of why the meeting is happening and why you are invited.  Yet time and time again we told colleagues something is happening, when it is happening, what they need to do, where it will happen, without ever giving a single thought to explaining why it is happening.  When you explain why you give your listeners a rationale, a reason.  They may not like that reason, but it is a reason, and it is a reason that they can work with when questions arise.

So, take the time to explain why and reap the rewards of a more engaged team.