Wednesday, December 10, 2014
8 Shortsighted Reasons Business Owners Don’t Plan
What has always intrigued me about this is when I ask an audience of private business owners to raise their hands if they are at all surprised to find that Coca Cola has a 3-year plan. Or Boeing. Or Target. No one raises their hands. “Of course they do!”, they would say.
Yet when it comes to their own businesses - no plan at all. Remarkably, 90% of private business owners operate without a plan. The success/fail records support this. So, why don’t they plan?
Here are the 8 most common reasons I have heard for this shortsighted behavior.
(1) "I'd rather DO rather than plan." Clients have said they would rather do anything than plan. Fix a machine, support a sales call, talk to a supplier, or review a new website. In doing these things they get immediate gratification of accomplishing something, of solving an immediate problem for the team. After all, they rationalize this is the role of the President and owner, to solve problems, to be an expert on all matters and keep the business humming along. Right?
(2) "It’s just not possible to do any long-term planning for MY business, it’s just too dynamic and unpredictable right now." “Mike, you don’t understand. My business is different.” Then they will site all the chaos they are managing through. Employee performance issues, a customer cutting their order in half, an upcoming conference to prepare for, a new competitor emerging, and the list goes on. “In such an environment, how do you expect me to do any long-term planning?
(3) "Time spent on this is just not worth the effort." Citing reasons (1) and (2) they will rationalize that it just doesn’t make sense to spend precious time on this priority right now. Some will further justify this position by recalling an instance where a plan was produced only to sit on a shelf - never to be referred to again.
(4) "I don’t know how." I have had owners tell me they intended to do this for years. Some even locked themselves away and stopped taking calls for the sole purpose of crafting a strategic plan. They admitted only getting as far as typing ... “2014-2016 Strategic Plan” ...at the top of a blank Word document. They add that despite the fact there are numerous resources on the web for how to do this very important and impactful, cerebral activity “it is hard to have any confidence I am doing this right”. That’s not surprising. Building a quality, viable strategic plan takes experience just like any other discipline required to run a good company.
(5) "What if it’s not the right plan?" Here is the logic behind this excuse. A plan puts our company on certain path. If the plan is wrong the path is wrong and that could spell disaster. “No plan mean I have the maximum flexibility to adjust in real-time based on the real-time dynamics of the business.” I’d like to see a CEO of any public company give this rationale to their Board of Directors or a startup to their principal investors.
(6) "I don’t want to be hand-cuffed on how I run my company." A written plan means accountability. “Publicizing our plan means committing myself (the owner) to accomplishing certain things in certain timeframes, right?” Yes. “Me failing to meet written milestones may give others a reason to justify not accomplishing the tasks I assigned them.” We can’t have that now can we.
(7) "I’ve operated this long without a plan and it seems to be working for me." Why change? This is one of my personal favorites because I invariably find abysmal marketing initiatives, costly bad hires, and expensive, ultimately aborted excursions into new markets that would not have otherwise been pursued had they been operating to a plan.
(8) "I don’t have time." “I know I should but things are just too busy right now for me to do any planning. Maybe later when things slow down.” Hint: they never do.
As this year draws to an end you have an opportunity to reflect on your business and your leadership. What did you learn this year? About your competition? About yourself? About your customer? What did your company do well? Where are the weaknesses that should be addressed? There is no doubt you possess a wealth of quantitative and quantitative data - inside your head. But that jungled mess of important information benefits no one in there. The planning process draws that out and makes it actionable. And much like making a movie, the finished product becomes the actionable script for your business.
Want to build a growth plan for your metro Atlanta business? Let's talk over a cup of coffee. Contact me here.
About the author. Mike Gomez is President and CEO of Allegro Consulting, a growth specialty firm in Atlanta, GA. Allegro has been helping Georgia’s private business owners plan and execute aggressive growth strategies for over12 years. Mike is a strategy and sales process evangelist with a tool chest built on direct experience in sales ($10B) and operations. He is a prolific speaker, writer, guest lecturer at UGA and GaTech, Next Top Entrepreneur judge, and start-up mentor at Atlanta Tech Village.