According to William Husu, co-founder and managing partner at start-up accelerator MuckerLab, business plans are a thing of the past. I can think of a few businesses in this part of the world who will be pleased to hear that. They will be able to get back to throwing money down the black hole of disorganisation and chaos without me driving them crazy to keep to a plan. But of course, life isn’t that simple and although these bold statements make great headlines Mr. Husu’s, like many others, is a bit more over-simplification than insightful.
I’m all for Husu’s ideal of flexible businesses responding to market changes and opportunities as they arise, but he seems to be forgetting that in reality the fast-trackers he may be used to working with represent the tiniest segment of the new business sector. The rest, frankly, aren’t so smart or quick-witted that they don’t need a plan. So, maybe the question is, in these times of fast-moving targets and win-all-lose-all gambles what does a business plan have to look like?
Firstly, a scanty plan only works when the people driving the business have the skills and experience to be able to respond sensibly to issues that arise through the life of a business. It would be great to think that business leaders were all switched-on and clued-up to the extent that they could busk their way to global success on the basis of a plan drawn up on the back of an envelope, but in the real world that’s not the way it is. Secondly, investors may be ready to take a risk, but not one as big as that of a business with no plan. This would require absolute faith in the abilities and instincts of the business founders or leaders. Sure, as an investor I would need to be as certain as I could be that the people I was entrusting with my money could think on their feet, but that doesn’t mean they shouldn’t have a road-map in the first place. There is so much that can go wrong with any plan that flexibility, responsiveness and creativity are all pre-requisites for any leader, but as with any journey you start with a map and a route. Business skills come into play when you find the road blocked or spot an out-of-the-way attraction that may be worthy of a look-see.
A business plan today is probably little different from one of ten years ago. Maybe the emphasis has changed and perhaps there needs to be more emphasis on the vision and mission than there used to be, but you still need to set out in writing the mechanics and financials of the business; the former because it is a good discipline for you and the best indicator to your investors, partners and employees that the idea is do-able and the latter, apart from being reassurance to third-parties that you appreciate the implications of your practical plan (I’ve seen more financial plans with critical costs omitted than I could possibly count), as a bench-mark to measure your progress by. Sure, you’ll miss things and you can be certain that eventualities will arise that mean you have to modify areas of your original plan, but that is no excuse for not having one in the first place.
On the question of vision and mission. I’ve recently written an extensive plan for a sizeable business and in explaining the make-up of our vision and mission to the business owners I looked to the definition that other people apply to these two readily banded-about phrases. The disparity of views among people who you would expect to be of one mind, is pretty surprising. So, at the risk of adding to the confusion I’ll state my definition of “vision” and “mission”.
“Vision” to me is clear. It’s where you see your business in three or five years, or longer if you think its safe to look that far ahead. “Mission” is a list of things you have to accomplish in order to reach that goal. The list doesn’t have to be long. Five or six short-term objectives are probably plenty for any business to focus on, at least at the top-line level. You also need to remember that like everything else in business, these are not tablets of stone. Your vision may remain intact, but because of the ever-changing landscape of world markets the mission is almost certainly going to change. That’s why (and this is where I fear most businesses miss the trick) you have to revisit your vision and mission every year when your executive board are preparing their annual report, measure your achievements against your mission, remove those that you can tick off as done and add those whose necessity has emerged since last year.
So, while I get the broad principle that a written-down plan isn’t the whole story, I can’t buy the idea of setting out on a new business journey without a map.
Phil Darby
February 9, 2014