How This Book Can Help You Develop a Powerful Business Plan That Works T his book gives you a proven method to help ensure your com- pany’s success. Organizations fail to accomplish their goals for one simple reason: The management story being told is incomplete, inaccurate, and incongruent. This book cuts past the traditional problems of planning and provides management with a document- ed method of building a simplified business plan that works. You’ll learn how to tell a story that is inclusive of employees and empow- ers them to participate in the company success. xxvii INTRODUCTION T HE F IVE C RITICAL I NGREDIENTS OF A S UCCESSFUL B USINESS P LAN There are five conditions critical to successfully building a power- ful, executable business plan. You must: 1. Simplify definitions and use words in plain business language. 2. Clearly demonstrate the relationships among planning elements. 3. Successfully link the connections between your strategic, operational, organizational, resources, and contingency plans. 4. Incorporate all functions into a single planning model. 5. Achieve total employee involvement by taking the busi- ness plan to all levels. I wrote this book for you as a manager, someone who is the steward of any organization, be it large or small. The concepts of business apply no matter whether you are an entrepreneur or a manager for a well-established, publicly traded company. Companies are organizations, no matter what their size, type, or product. This means you must have an integrated business plan no matter who you are or what you do. Business planning is important whether you are a start-up company in e-business or working on a multinational planning team. This book gives you a place to start, a system to make sense of the confusion around planning, and a model to build a complete package. W HY THE T RADITIONAL P LANNING M ODELS FOR B UILDING A B USINESS P LAN D ON ’ T W ORK I can contribute to your success by sharing a method of business planning based on an approach that’s different from the dry, tradi- Introduction xxviii tional numbers method. My experience is that you are currently using one of three approaches to business planning: traditional, piecemeal, or one with a deflected focus. The Traditional Approach: Good Intentions, Dismal Results A large number of published works and many management con- sultants simply say the same thing. They are replays of the same themes of setting the vision, establishing goals, and getting employee buy-in. Had the traditional approach of forming a plan- ning team and producing a document been successful, there would be no need for this book. The traditional planning approach fails because the required parts are not integrated, the results are boring, and the process is not completed throughout the company. These three faults create a deadly waste of company time, money, and talent. While the inten- tions are good, the results are dismal. That is why traditional plan- ning appears to have management teams simply going through the motions over and over again with each yearly plan. The Piecemeal Approach: No Way to Fit the Pieces Together This book gives you all the elements of the business plan and shows you how to fit them together. Most businesses think they are plan- ning when in fact they are going about it in a piecemeal fashion. Company presidents need to see a simple but complete picture that tells them how to be successful. Everyone needs to understand the relationship between strategic goals and next week’s tasks. Employees need to understand the annual targets and how they apply to their performance. Objectives need to be tied to accounta- bility and responsibility. In a piecemeal approach I’ve found man- agement teams that do not understand the interactive relationships of the parts and pieces of planning. Introduction xxix This book gives you the tools you need for designing a fully integrated business plan for your company. A business plan is sim- ple on the one hand yet sophisticated on the other (see Appendix A). You must be able to present that simplicity and complexity simultaneously. The picture you create must encompass both the short- and long-term views. It must be strategic yet contain details of the daily requirements. The concept must include verification of where you are today as well as documentation of where you intend to take the business. Finally, it must serve as a reference tool for your employees and management as they conduct business. This book creates a vehicle for bonding among your team. What better way to become a team than to deal with real business issues in an orderly, professional fashion? And finally, this book helps you create a condition for full participation in the plan, not the traditional “let’s get it over with” attitude. Once you get your team on the same page, there will be no serious blocks in your plan- ning process. The Deflected Focus Approach: Falling Short of Your Company’s Real Needs Planning models and theories that approach faddish status usually prove to fall short of achieving business success. They don’t present a complete process, resembling more bits and pieces of processes rather than a unified, logical pathway to the future. They deflect from the true needs of planners to tell a story in business terms. For example, hundreds of millions of dollars have been spent on reengineering efforts, Total Quality Management (TQM), and the balanced scorecard, all with minimum overall return. These activi- ties may be good as specific tools, but they cannot substitute for a completely integrated planning model. Unfortunately, companies attempt shortcuts with these overpromised tools and get fragment- ed success. Only by using a complete planning cycle and applying appropriate tools at appropriate times can you ever achieve the full force of the business plan. Introduction xxx Introduction xxxi T HE T HREE U NIQUE F EATURES OF T HIS B OOK T HAT W ILL H ELP Y OU A CHIEVE Y OUR B USINESS P LAN G OALS There is a fourth option that overcomes the problems with tradi- tional, piecemeal, or deflected business planning. This planning process puts energy and emotion back into the company. It ener- gizes the workforce by tapping into employees’ purpose and passion. The model encourages the use of intellectual capital and promotes the empowerment of people to take responsibility for accomplishing agreed-on, realistic goals. The planning process forces examination of how work is done with the idea of eliminat- ing unnecessary and wasted efforts that translate to lost profits. This book will help you find a sensible starting point, illustrate the value of the parts and pieces of an integrated planning model, and build a case so logical that you cannot avoid writing a business plan. I’m going to be appealing to your most basic business sense and show you how to be successful in setting goals and reaching your vision. Your Management Story This book centers on your management story. I like the concept of story because it conveys meaning in the simplest possible way. We live, love, and entertain through storytelling. Today you may have bits and pieces of the story, but is it believable, consistent, and authentic? Is the story being told in a way that your employees understand, buy into, and implement with minimum loss of work effort? A central message throughout this book is the need to have all the parts and pieces connected in such a way that they reinforce each other. In short, they must hang together in a way that forms a story of hope, passion, and opportunity for success. The Concept of backPlanning* Another unique element of this book is the concept of backPlanning. This requires the company to define where it wants to be and then work backward from that point. This forces man- agement to put a stake in the ground about where they intend to take the company. The normal fear of vagueness often associated with vision-based planning is eliminated because backPlanning also stresses forward execution. This means the strategic goals are con- verted to short-term, practical, operational activities. You will see the connection between your daily requirements and where you want to take the company. The 5-Page Business Plan The traditional business plan does not meet the needs of real-world managers. They need a simple, effective tool that is easy-to-read, portable, and keys them into what needs to get done. My planning tool gives you a concise, functional plan in five pages. I have been extremely successful helping many companies build powerful plans using the 5-Page Business Plan format. Simple plans are popular from executives down to operators because they are convenient, concise, and user-friendly. Use this book to help you consolidate your complete business plan into five pages. H OW TO C ONVERT Y OUR G OALS I NTO P RACTICAL B USINESS B EHAVIOR Over the years I have met and worked with thousands of managers as a consultant and trainer. So many of you have told me of the need to convert vague, esoteric, and often unrealistic planning into something concrete and doable. I heard you. Business planning is of no value unless it can be connected to next year’s daily activities. Introduction xxxii * backPlanning is a registered trademark of Al Coke & Associates, International. There is a way to make the connection between the desired end state or vision and the existing present state or mission. Those con- nections are illustrated in this model and they stem from a basic principle in my planning approach: Everything you do on a daily basis must contribute in some way to your strategic goals. The reverse is also true. Your goals must be converted to practical, daily behavior. A critical point raised in my many discussions with managers is the failure of planning to reach all levels. That failure is directly attributed to the planning model, the planning documentation, and the lack of planning accountability. Typically, planning is a three-day conference held at a resort. There’s a lot of build up, hoopla, and fanfare. Promises are made knowing they will be bro- ken. Numbers are bantered about as if they actually mean some- thing. Tough talk is heard about roles, responsibilities, and account- ability. The session ends with a charge by the president “to go out and do good.” Two weeks later the budget people tell you the plan is invalid because it can’t be financed. The salespeople react to the numbers as unrealistic. The manufacturing folks tell you they can- not sustain the production levels. The information technology (IT) people need a complete hardware/software upgrade that requires millions of dollars. And so on and so on. Lengthy modifications are pieced into the master plan, distorting what was initially thought to be a viable, integrated solution. This delays the plan for months. I’ve witnessed companies still trying to get their plan together in the fall for the existing year. Even with no staff distortion, at best, feeble attempts are made to roll the modified plan to the company. The norm is to move one level below top management before the plan loses its momentum. The planning effort is set aside, diluted, or ignored. That type of management behavior is unacceptable. To change it requires a change in the planning framework. Built into the backPlanning model is a mechanism requiring the plan to be communicated to every employee at every level. The mechanism has a built-in safe- Introduction xxxiii guard for performance accountability. The model will not work unless these steps are included. Finally, as your consultant, I heard your concerns about the failures of planning to meet your real-time business needs. This book brings to life the planning process by explaining how business works in the most practical sense. Its value is that it forms a com- munications vehicle to reach every person in your company and tells them about the urgency of all parties honoring the plan. It defines success as well as failure. This book will help make planning work for you. The steps are well researched, tested, and documented. It requires you to get your management story together, develop a clear direction, establish a concise, fully integrated business plan, and then implement the plan with methodical accountability. The next chapters outline exactly how that is to be done. Introduction xxxiv Introduction xxxv THE KEY QUESTIONS: THE BUSINESS PLAN SELF-TEST To help identify problems with the development and application of a powerful business plan, complete the following self-test of ten questions. This simple exercise will bring to focus indications of your state of planning. If you are not satisfied with the answers, begin the planning process now. 1. When was the last time you read your company business plan? 2. How would you describe your existing planning process? 3. How complete is your business plan? 4. How satisfied are you with both the planning process and the product? 5. Would you be willing to invest in a new model of planning? 6. What internal or external forces would hinder your developing an integrated business plan? 7. Take a walk around your company and ask for a copy of your business plan. How many copies can you find? 8. Ask employees a simple question: “Where are we going with this company?” 9. Ask your management team, “How satisfied are you with our planning process?” 10. Ask anyone, “Have you ever read a complete business plan for this company?” This Page Intentionally Left Blank . external forces would hinder your developing an integrated business plan? 7. Take a walk around your company and ask for a copy of your business plan. How many. How This Book Can Help You Develop a Powerful Business Plan That Works T his book gives you a proven method to help ensure your com- pany’s success.